Are You Paying Much More Than You Should for Natural Gas?

If you’re paying a variable rate on natural gas, you’re probably wasting money. Any time is a good time to reconsider that decision. Why not today?

Many people who pay variable rates on natural gas don’t know about fixed-rate plans or they’ve let their fixed-rate plan expire without signing up for a new plan. For those people who are planning to move and think a fixed-rate plan isn’t for them, you can get a fixed rate plan as short as six months.

Therms, Schmerms
Natural gas is commonly sold in units called therms. One therm is 100,000 British Thermal Units (BTUs). One therm is roughly equivalent to 100 cubic feet (or 1 CCF) of natural gas. When it comes to natural gas, you don’t have to worry about the units. You just need to figure out how to use less of them (by investing in passive solutions like air sealing and insulation) and buying your therms at the lowest possible price.

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Therm Math
It’s time for a bit of “therm math”, a name that trips off the tongue yet it’s important that all home owners with natural gas appliances understand this issue. As you can see in the image of an actual natural gas bill above, the monthly usage was 70.040 therms and each therm costs $0.999.

70.040 therms x $0.999/therm = $69.97 charge

The per-therm rate for natural gas on a fixed-rate plan could be less than half of that amount. Scana Energy (as an example) is running a promotion that gets you a 12-month fixed price of $0.359/therm. For the same consumption, that would mean:

70.040 therms x $0.359/therm = $25.14 charge

That’s a 65% reduction of the natural gas charge. Having the fixed-rate plan at $0.359/therm would have delivered a savings of $45.83 in one month. Your variable rate may be even higher than $0.999/therm so you could save even more.

Saving All Winter
February 2015 was a cold month in the southeast. The house from which the bill in the image above was taken used 210.535 therms in February 2015. The highest variable-rate plan for which the home owner has records shows a charge of $1.339/therm.

210.535 therms x $1.339/therm = $281.91 charge

The $0.359/therm fixed rate above is one of the best rates available in recent years. That rate for the home’s consumption in February 2015 would yield a much lower natural gas charge:

210.535 therms x $0.359/therm = $75.58 charge

Again, you can see the difference a low fixed-rate gas plan can offer. Even if you settle for a higher fixed-rate per therm (like $0.609/therm), you’re probably still saving money when compared to a variable-rate plan.

Know the Details
It’s important to know your fixed-rate plan options. You can find the plan details on most natural gas provider websites which, in Georgia, you can find on the Georgia Public Service Commission (PSC) website.

You can also get the plan options from the sales department of the natural gas provider you contact. Beware that the PSC website may show rates though it might not show promotions for lower rates. You’ll have to conduct your own research to find the lowest rates offered by a plan that’s the right length for your needs.

Fixed-rate plans often come in six, twelve and eighteen month lengths. You’ll typically have to pay an early termination fee if you exit the plan before it expires.

You may find restrictions on plans like the Scana Energy fixed-rate plan mentioned above. It’s offered for a limited time and is only available to new residential accounts (accounts not currently buying natural gas from Scana Energy).

In Georgia, you’ll probably need to sign-up for service with a provider before the 20th day of the month to be switched over by the first day of the coming month. If you sign-up for service between the 20th day of the month and the first day of the next month, your service will probably be switched over on the first day of the following month.

Also, in Georgia, you may need to pay a fee to establish service (probably $60) though once you’ve established service you probably won’t have to pay a fee to switch providers if you’ve not switched in the last year. If you do switch providers more than once in a year, the fee may be minimal (about $7.50) – ask your natural gas provider.

Finally, having excellent credit means you probably won’t have to pay a deposit. If you’ve frozen your credit, you’ll probably need to unfreeze (or “thaw”) your credit for a check. You will likely only need to unfreeze your credit with one reporting bureau so be sure to ask the natural gas provider which one they use.

In Conclusion
Signing up for a fixed-rate gas natural gas plan could save you hundreds of dollars over the course of the year. You may find it helpful to begin paying attention in the middle of the summer when natural gas rates are relatively low and providers begin to advertise their fixed-rate plans to get customers through the winter months.

If you save money on a great fixed-rate plan, give some thought to putting that money into a separate savings account for maintenance of your home. You may be saving hundreds of dollars over the course of the year though you may need thousands of dollars when it’s time to replace your heating/cooling system or your roof.

Know someone who’s got gas? Make sure they know about fixed-price natural gas plans!

As always, if you’ve got a comment or question, please share it below. Thanks!

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One Response to Are You Paying Much More Than You Should for Natural Gas?

  1. If you’re in Georgia and you’re wondering about the Scana Energy promotion mentioned in this blog post you can call them to ask about it: (866) 353-5168 or visit http://www.scanaenergy.com/Q4L to see the pricing options and details. The promo code is Q4L. The offer expires 01|04|2016.

    Ryan Taylor Architects LLC hasn’t received any consideration for mentioning the Scana Energy plan. Once you start saving money with fixed-rate natural gas pricing you’ll probably want to help others to do the same!

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