Buying Natural Gas – Contractually or Monthly

Flames on a lit gas burnerUnlike electric plans, most utility companies simply provide gas for cooking, hot water, heating your house, etc, and charge you for your usage. There are no time of day discounts or interruptible service plans. There are a few exceptions you should be aware of, however. For example, some utility companies will reduce the monthly bill of seniors, although the discount may be tied to the household income. If you think you may qualify, you should inquire at your utility company – they don’t typically solicit applicants for discounted gas plans.

There are other options which may be available for those seeking to reduce gas costs. While the prices of ‘conventional’ gas companies are fixed by a regulatory agency, you may be able to take advantage of variations in the cost of gas.

Some areas are serviced by alternative gas companies which offer contracts to purchase gas at a fixed rate for a specified term, regardless of marketplace fluctuations in the price of gas over time. For example, SCANA currently offers an 18 month plan in Georgia, in which all gas used is billed at 69.9¢ per therm (72.1¢ per CCF), and a second plan with a 12 month term in which all gas usage costs 64.9¢ per therm (66.9¢ per CCF). Note that these prices are for the purchase of the gas only, and that there are additional charges for delivery of the gas to your house.

Man, seeking answer from Magic 8 BallThere are also floating rate  fixed rate contracts indicated above. For example, Constellation indicates they will provide a 12 month contract for gas at 51.3¢ per therm (52.9¢ per CCF) in Michigan, while their month to month variable rate for gas is presently 58.9¢ per therm (59.9¢ per CCF). Apparently, the company feels the price of gas will drop in the upcoming months, and is offering a lesser rate for the longer term contract.

Research gas futures, consult your crystal ball, or break out your Magic 8 Ball and make your best guess as to which plan is best suited for you. Alternately, you can simply rely on the rates charged by conventional gas companies which are governmentally regulated.

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