Trying to understand your gas bill can be quite complicated if you don’t know what you’re looking at. Which is why we’re here to help.
Before we dive into breaking down your bill, you first need to have a general understanding of natural gas and its current trend. As of now, natural gas has remained as the primary source of U.S. electricity generation. According to the EIA, “The share of total electricity supplied by natural gas-fired power plants is expected to average 33 percent in 2018, and 34 percent in 2019, up from 32 percent in 2017.”
Coal – which used to be the dominant source of electricity – stands at roughly 30 percent, and will continue to decline in the upcoming years, potentially seeing its usage drop to 28 percent by 2019, per the EIA.
You’re probably wondering what this has to do with your bill. Well due to the fracking boom in our nation, prices for natural gas have remained constant, and in some cases have even dropped, as opposed to coal. Due to supply and demand, natural gas presents a much more affordable option, while also reducing greenhouse emissions.
The fluctuations in the energy market directly affect your bill, which is why it’s always good to know where the energy market stands. Understanding the market fluctuations can also help you improve your bill payment.
What to look for in your natural gas bill.
As we mentioned earlier, it’s important for you to know whether you have a fixed rate or a variable rate plan. Having a fixed rate means you’ll pay a constant fixed rate monthly, regardless of the market fluctuations. A variable rate plan on the other hand, means that your payments will follow the fluctuations in the market.
For this example, we’ll pretend you have a fixed rate, since that typically is the standard among households. When you first look at your bill, you’ll notice your account number along with the type of plan you’ve signed up for.
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Next, you’ll have the account summary, which will show you your new charges, and your total amount due. This amount is usually broken down within your bill. But before you can know why your amount due is what it is, you first need to understand your rate plan (which will also be shown on your gas bill).
Your average rate plan is the price you pay per therm. A therm is the measurement used to measure your natural gas consumption. Prices per therm typically range from $0.40 to $0.60.
On your bill, you will see the amount of therms used within your household for that month. That number (which typically ranges from 60 to 100 per household) will then be multiplied by your price per therm. So if your home used approximately 80 therms, and your price per therm is $0.50, your natural gas consumption charge will come out to $40. Depending on the energy company you use, you’ll probably have to pay a service charge, and of course you’ll have to pay taxes.
If you want to calculate your gas bill on your own from a meter reading, then you’ll need to follow this equation:
- (Last bill’s meter reading) – (current bill’s meter reading) = CCFs used
- (CCFs used) x (thermal factor) = Therms used
- (Therms used) x (rate per therm) = Gas charges
Luckily for you and I, we don’t need to solve this equation all on our own. Energy companies typically break it down for you every time they send you your statement.
The important thing to remember is that the amount of therms used will ultimately affect your payment. The more natural gas you use, the higher your bill will be – which is why applying energy saving tips daily will go a long way into reducing your gas bill.
Some quick tips to help you reduce your gas bill.
Have you ever heard the expression, “Location, location, location”? It usually applies to real estate, but it also applies to your energy bill.
Let us explain.
If you happen to live up north, then chances are your main priority during the winter time is to stay warm – by any means necessary. That’s understandable, especially with the harsh winters of recent years. Fortunately, there are ways where you can stay warm while also reducing your overall natural gas usage.
Your furnace for example, will usually be the appliance that has the highest therm usage. This is an especially common occurrence in areas up north. When winter rolls around the thermostat usually goes up, forcing the heater to work overtime. One way to reduce this burden is to simply wear heavier clothes while indoors, that way you don’t have to raise your thermostat as much.
It really is as simple as it sounds. By wearing heavier clothes within your home, you’ll be able to keep your thermostat at a moderate temperature, while also reducing your usage and dependency of your heater. These small changes can make a significant impact towards lowering your natural gas bill.
If you’re lucky enough to live in a warm climate that avoids harsh winters, there are other ways you can reduce your gas bill. Another appliance that is a major culprit in terms of therms used is your dryer. Reducing the amount of times you use your dryer will help lower your rate.
“But how am I supposed to dry my clothes?” Two words: air dry.
If you live in a warm climate, do yourself a favor and hang your clothes on a line outside – the old fashioned way. Not only will you reduce your energy bill, you’ll also increase the lifespan of your clothes. If you can’t hang your clothes outside, then make sure you’re constantly cleaning the lint filter after every load, and try to use your dryer during non-peak times.
While reading these tips, you probably thought at some point that they sound too easy and too good to be true. In reality, simple tips (like the ones mentioned above) are the ones that tend to get neglected most. There is no big energy saving secret. It simply comes down to understanding where your energy is coming from, and how you can make a difference on your own. Your gas bill will ultimately reflect the effort you put forth to live an energy-conscious lifestyle.