Therm Billing Frequently Asked Questions
1. Why is Columbia Gas converting from volumetric billing to therm billing?
Columbia Gas is improving the way you are billed. Customers will now be billed for the amount of energy (therms) provided by the natural gas you consume instead of the volume (Ccf) of natural gas consumed.
The Company's new method of billing in therms is like counting the blueberries in the pint and charging you for that number of blueberries. Instead of charging two customers the same price for a pint of blueberries containing different amounts, now you are going to be charged for precisely the number of blueberries that you purchased, as will everyone else who purchases blueberries.
2. What was wrong with the old system of volumetric billing?
Both ways of billing, either based on Ccfs or therms, are lawful and accurate.
For decades, Columbia Gas has purchased natural gas in therms. The Company would then use an average, statewide BTU value to convert its therm gas purchase into Ccfs for customer billing.
Over the past few years, Columbia Gas noticed geographic variations in BTU content which were not present before. As Columbia Gas continued to monitor the energy value of the gas, it became apparent that these variations were here to stay so the volumetric billing practice was converted to therm billing to ensure that customer bills continued to be fair and equitable no matter where they lived in the state.
3. I thought you just raised my rates in October?
This is only a billing conversion process, not a rate increase.
It's important to remember that Columbia Gas delivers natural gas without profiting from its sale. Under Pennsylvania law, we pass the cost of the natural gas on to our customers, dollar-for-dollar, without mark-up.
4. What is the difference between a Ccf and a therm?
Ccf: A volumetric measure of natural gas. It represents the amount of gas contained in a space equal to one hundred cubic feet.
Therm: A measurement of energy, or heat, equal to 100,000 BTU (British thermal units). The same volume of gas may contain different amounts of energy.
BTU: The amount of heat it takes to raise the temperature of one pound of water by one degree Fahrenheit.
5. Will I get a new natural gas meter?
No. Meters will continue to measure customer’s natural gas consumption in Ccfs. Columbia Gas will still need to read meters, either manually or through an automated meter reading (AMR) device. The conversion from Ccfs to therms will be reflected on customers' bills, not the meter. Your natural gas meter will continue to measure your usage in Ccfs.
6. Is there a benefit to converting to therms?
• Maintains fair and equitable bills for all customers because bills will be based upon the value of the product, or energy. Up until this conversion, when Columbia Gas billed based on the volume of gas a customer consumed, two customers could use the same energy but be billed differently. Now customers will be billed for the energy consumed.
• Aligns the way customers are billed with the same way Columbia Gas purchases gas in the marketplace, in therms.
• Clearly demonstrates the energy savings of appliances. The EnergyGuide and Energy Star labels appearing on household gas appliances are based in therms so this change will make it easier for customers to compare appliances.
7. How will you determine the amount of therms used per month?
To convert your usage to therms, Columbia Gas will multiply the BTU value of the gas in your area by the volume of gas (Ccf) consumed that month. Example: 1.05 BTU x 100 Ccf/month = 105 therms. As another example, if the BTU value in your area was 0.95, your bill would reflect 0.95 BTU x 100 Ccf/month = 95 therms.
8. How do you determine the BTU value of the natural gas in my area?
Columbia Gas divided its service territory into eight Pipeline Scheduling Points, or PSPs. Each PSP is assigned a BTU value that is monitored, and updated, every month to reflect that most recent energy value available for that particular PSP. Each PSP takes natural gas from the same points of delivery ensuring the BTU value of each PSP is consistent.
Did you know? Columbia Gas has purchased gas on a therm basis for decades and has always established rates using a BTU value. In the past, Columbia Gas converted its therm purchases to Ccfs in each of the eight different geographic areas using an average, statewide BTU conversion factor. The Company's change to therm billing retains the distinctions between the eight different geographic areas so customers get the energy they pay for regardless of where they live in Pennsylvania.
9. How do I know the BTU value you are assigning me is accurate?
The third-party interstate pipeline companies who supply Columbia Gas determine the BTU value of the natural gas that the Company purchases using BTU measurement tools such as a chromatograph or calorimeter, just as they have done for decades. The devices are calibrated on a monthly basis to ensure that they are accurately measuring the BTU content of the gas.
10. Why does the BTU value of my natural gas matter?
The BTU value, or energy content, varies across the state. A change in energy content can result in a customer consuming higher or lower volumes of gas to deliver a given amount of energy.
To boil a gallon of water, customers in areas that receive natural gas with lower energy content use a greater volume of gas than customers receiving natural gas with higher energy content to boil the same exact amount of water. However, both customers use the same amount of energy.
11. Is the BTU value constant?
The Btu conversion factor will be updated every month with the most recent BTU values of our gas supply by PSP.
12. Does the BTU value change while being transported to my home?
The heat content of natural gas does not change while being distributed to your home.
13. Will this conversion affect my bill?
Depending on the BTU value of the natural gas you consume, your bill may slightly increase or decrease.
For customers who have consistently received gas with lower energy content; the average customer’s bill may decrease by 1 - 2 percent. For customers who have consistently received gas with higher energy content, the average customer’s bill may increase by 4 percent - percent. Please keep in mind that there are other factors that influence increases or decreases in your bills, such as weather, quarterly gas costs, thermostat settings, insulation measures in your home or business or the condition of appliances and buildings.
It’s important to remember that Columbia Gas delivers natural gas without profiting from its sale. So while the impact on bills may vary, there is no profit motive for Columbia Gas.
14. When will therm billing begin?
January 31, 2012.
15. Is Columbia Gas billed in therms for the natural gas it purchases?
16. Will this conversion affect the cost of natural gas?
No. This is a billing conversion process, not a rate increase.
Columbia Gas customers have seen nearly a 50 percent decrease in their natural gas costs over the past decade, thanks in large part to the abundant natural gas supply available in Pennsylvania. When adjusted for inflation, The Company’s residential customers are paying a total bill that is more than 25 percent less than they were paying 20 years ago. With therm billing, all customers across the state will continue to benefit equally from the energy produced through natural gas.