How to Read Your Natural Gas Bill
How to determine your current natural gas rate per therm and how knowing it might save you money.
To determine your current month’s average price per therm, you will first need your most recent natural gas bill. On your bill you will most likely see three sections, delivery charges, natural gas charges and taxes. Please keep in mind that prices fluctuate from month to month based on the season. If you are looking into switching energy supplier companies, you would need to look at the prices from between 6-12 months’ worth of natural gas bills to get a good grasp on how much you are paying on average.
Delivery charges are what your current provider charges you to deliver natural gas to your home or business. Providers maintain and own the pipes that deliver natural gas to your home. The charges detailed in the delivery charges of the sample bill below are what you are charged for the delivery of your natural gas and not the actual rate you are charged for that natural gas. These charges are generally non-negotiable and cannot be avoided by switching supplier.
Natural gas charges (Supply)
Natural gas charges are what you are actually charged for the natural gas that is flowing into your home. If you are buying natural gas through your local Utility (provider), they may use multiple sources to supply your natural and may even charge you multiple rates depending on how much natural you use. Most utility companies and many suppliers do not have fixed rates and therefore, your rates may change from month to month and you may notice two different rates and months depending on your billing cycle. If this seems very complicated, don’t worry. We will go over exactly how to find your average cost per therm whether you have a single or multi- tier system. After we go over this, we will show you how to get an average across all of the bills you have done this for.
Determining your Average charge per therm on a split month or single month bill
Below, we have an example of a split month bill. For this type of bill, all you have to do is look under the natural gas charges section of your bill and find the detailed breakdown of your natural gas charge. A single month bill would simply contain one rate as the billing period would be contained within a single month. For convenience, we have highlighted this section in our example bill. In this section, there will be a dollar amount. This is the amount you are charged for the natural gas in the unit of measurement called ‘therms’ and is your average charge per therm for the listed month. For this bill, it would be $0.40 per therm in November and $0.47 per therm in December. These rates should remain the same for each month meaning that for you next bill, the rate for December should not change.
Determining your average charge per Therm across multiple bills
To determine the average cost per therm for each month, you will need to add up all of the therms you have used for each month, and then multiply your average cost for each month by the total amount of therms you used that month divided by the total amount. As an example, we will use the two months listed above and the average cost per therm values we determined from them to find an average cost per therm across the two bills. For the purposes of this example, we will assume that the customer also used 160 therms for the remainder of December and used 20 therms in the beginning of November. This would give us an even 180 therms used in each month.
The formula would look like this:
The total amount of therms used between the two months is 360 therms.
For the November, we used 180 therms at a rate of $0.40 per therm.
For December, we used 180 therms at a rate of $0.47 per therm.
To determine the applicable rate per therm for November, we would take the therms used in November, divide it by the total therms used across the two months we are averaging, and then multiply that ratio by the rate per therm for November.
For December, you would do the same thing.
To compare more than 2 months, you would continue to use this process for all of the months that you have collected and then simply add up the numbers you have gotten.
$0.20 + $0.235 = $0.435 per therm
For our example using two months, the average rate per therm is $0.435.
How you might save money knowing this
Thanks to energy deregulation, you have a choice when it comes to who supplies the natural gas in your natural gas bill. Your local utility makes no money off of the sale of natural gas, only its delivery. When you go with an independent natural gas supplier, you can have control over the prices you are charged for natural gas.
At Santanna Energy Services, we offer a low fixed rate per therm. You will continue to receive your energy bill through your current Utility (provider) while enjoying the lower rates that Santanna Energy Services offers. Simply follow the steps we outlined above to determine the average rate you have been charged throughout the past 6 months to 1 year. It is important to average your rate across multiple bills because natural gas is normally more expensive per therm in the winter than the summer. After determining your average rate, compare it to our fixed rate to see if switching to Santanna Energy Services could save you money.