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Understanding your utility bills, No. 4: How is your natural gas bill determined?

Businesses use natural gas for a variety of reasons; from ovens in a kitchen, to heating a building, and a myriad of industrial functions. Natural gas is a necessity for many businesses and yet, with prices on the rise, it’s becoming a hard cost to cover.  

Part Four of Schooley Mitchell’s four-part blog series.  

In the final installment of our series on understanding your utility bills, we go in depth on the components of your natural gas bill and what some businesses can do to offset the added expense.  

Using a utility vs. a natural gas retailer.  

Depending on where you’re located, you may have the option to purchase gas from an energy retailer or natural gas marketer. In regions where natural gas is regulated, that won’t be an option. However, if you live in an area where it is deregulated, there will be more choices of provider for your business.  

In regulated areas, you must set up your services directly with the utility. The utility owns the operation responsible for bringing natural gas to your home.  

In contrast, a natural gas marketer is a third party you can purchase through to help you secure your rates. These kinds of companies have been on the rise since the 1990s, when there was a popular shift in the United States, specifically, for consumers to have more options. 

Components of a natural gas bill.  

When looking at your natural gas bill, it helps to understand the components. According to The Ontario Energy Board, a standard natural gas bill will have the following charges: 

  1. Customer charge 
  2. Delivery charge 
  3. Gas supply charge  

Likewise, some regions – Canada, for example – will incur a carbon tax. This will be a fee the customer pays on every bill.  

Customer Charges.  

A customer charge is a fixed fee billed every payment period that represents the cost of administering your account. This includes: 

  • Meter reading 
  • Customer services 
  • Equipment maintenance 
  • Emergency response services 

Even if you didn’t use any gas in the given billing period, you’re responsible for paying this fee.  

Delivery Charges.  

Chances are the natural gas you use to operate your business travels a good distance to reach your facility. That journey isn’t without its costs – which is why customers are charged a delivery fee.  

According to Constellation, that journey often follows these steps: 

  1. A field compressor moves gas to a pipeline or processing plant. Pressure moves gas through the pipeline.  
  2. Depending on where in the country the gas is traveling, this can take several days, moving at a speed of 30 miles per hour.  
  3. Eventually the gas will reach a gate station at a local utility.  
  4. From there, it is moved into distribution lines, within the utility’s control center. 
  5. Then, a service line delivers the gas to its destination for your consumption.  

When you pay the delivery charge, you’re paying for the transportation, delivery, and storage costs involved in this process.  

The exact breakup and payment schedule of this fee will depend on your provider but it is often charged based on your usage.  

Gas Supply Charges.  

This is the per-usage fee that represents how much gas you consume. Depending on your location, your rates may or may not be regulated, and may or may not be subject to a markup from the provider.  

Gas supply charge rates are determined by looking at past costs and projected future costs for the utility based on consumer use data. Forecasting is generally done about a year in advance, and then adjusted throughout the year to better represent current trends.  

How can you save money on your business’ natural gas bill? 

Your natural gas bill isn’t set in stone. There are steps you can take to reduce costs.  

Some measures are as simple as changing your habits. These can include: 

  • In appropriate environments, such as offices, turn the heating down after you leave for the night or when your business is closed. 
  • Clean or change any furnace filters regularly. 
  • Keep air vents and baseboards dust-free and unobstructed.  
  • Keep blinds/shades open during the day in colder weather, to allow the sun’s heat to contribute to the building temperature and insulate against heat loss.  

Others require an investment, which would be worthwhile in the long run: 

  • Scheduling annual furnace inspections from a trusted professional. 
  • Installing a smart thermostat that will adjust automatically to save money and energy.  
  • Sealing the seams on heating ducts to prevent air from escaping.  
  • For buildings you own or can make repairs to, caulking and using weatherstrips on doors eliminates drafts and heat loss.  
  • During the winter months, using heat-shrink plastic on windows to keep the heat in the building.  
  • Utilizing insulation and energy-efficient windows.  

These are a few solutions, not all will fit every business. However, there are steps you can take in every location to reduce your natural gas bill.  

Shop around for the provider that best fits your needs. 

If you live in a deregulated area where you can work with a third-party energy retailer, you might be able to find a more customizable solution for your business’ individual needs. Shop around, explore your options, and don’t hesitate to contact experts and professionals for assistance.  

In conclusion… 

Your natural gas bill is determined by several factors. The good news is that there are ways to save and find a provider with the best services for your business.  

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