Natural gas can power many systems within your home, such as your oven or range, central heating systems, water heaters, and clothes dryers. If you have the choice to use natural gas, it may be the most competitive plan for your home. Electric rates and natural gas rates tend to vary greatly from geographical area to area.
The major factors influencing the price of natural gas are:
- Distribution and transmission costs – Pipeline companies charge utilities to use their pipelines to move natural gas from the production site to customer homes. That cost is passed on to consumers.
- Fuel costs – The base supply available and current demand for that supply create a constant fluctuation in fuel costs.
- Governmental regulations – Depending upon the state in which you live, certain taxes and other regulations may change the final cost of natural gas.
Winter versus non-winter rates
In areas that experience drastic drops in temperature during the winter months, the price of natural gas can increase during colder months This price increase is even more drastic for those pipelines that are working at full capacity as there is no space available to move the added amount needed to meet the increased winter demand.
Sudden weather events
Unexpected cold spikes, hurricanes and other extreme weather events can also influence priced The sudden spike in demand created by these events is sometimes more than natural gas companies can meet. That can results in an increased cost for residential and business consumers.
How natural gas is priced
Companies measure quantities of natural gas in cubic feet that stand for the physical supply. In this case, the customer’s bill will show a charge per Ccf (100 cubic feet) or Mcft (1,000 cubic feet). Another common unit of measurement for natural gas – and thus, its billing – is “therms.” This is a measurement of the potential heat created from the fuel supplied.
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