What Are Therms on a Gas Bill & How Are They Calculated?
Demystify therms on your gas bill. Understand how this energy measurement is determined and directly affects your monthly costs.
Natural gas bills often present charges in units that can seem unfamiliar. This system ensures consumers pay for the actual energy content received, rather than just the volume of gas flowing through their meter. Understanding these units is important for deciphering the true cost of natural gas consumption.
Understanding the Therm Unit
A therm represents a quantity of heat energy, not a volume of gas. One therm is equivalent to 100,000 British Thermal Units (BTUs). BTUs measure the heat required to raise the temperature of one pound of water by one degree Fahrenheit. Utilities bill by therms because the energy content of natural gas can fluctuate.
The chemical composition of natural gas varies depending on its source and processing. Billing by energy content provides a fair and standardized method for charging customers. This ensures customers receive and pay for the same amount of actual heat energy, regardless of variations in gas quality. A therm serves as a consistent measure of the useful energy supplied by the utility.
Converting Gas Volume to Therms
Natural gas meters measure the volume of gas consumed, typically in cubic feet (CF) or hundred cubic feet (CCF). To convert this volume into therms, utility companies apply a conversion factor known as the “heating value” or “BTU factor.” This factor quantifies the heat energy contained within one cubic foot of natural gas supplied to a service area.
The heating value can vary based on the gas source, pipeline quality, and seasonal adjustments, ranging from 1,000 to 1,050 BTUs per cubic foot. To calculate total therms, multiply the measured gas volume in cubic feet by this heating value. The resulting total BTUs are then divided by 100,000, since one therm equals 100,000 BTUs. For example, if a meter records 10 CCF (1,000 cubic feet) of gas and the heating value is 1,020 BTUs per cubic foot, the calculation would be (1,000 cubic feet 1,020 BTUs/cubic foot) / 100,000 BTUs/therm, equaling 10.2 therms.
Calculating Your Gas Bill with Therms
The total number of therms consumed forms the basis for calculating the primary energy charge on your natural gas bill. Utility companies apply a rate per therm, which can fluctuate based on market prices for natural gas, regulatory approvals, and supply costs. The “gas supply charge” or “energy charge” portion of your bill is derived by multiplying your total therm usage by this rate. For example, if you consumed 10.2 therms and the rate is $1.50 per therm, your energy charge would be $15.30.
The energy charge, based on therms, is one component of the overall natural gas bill. Most utility bills also include additional charges, such as customer service fees, gas delivery charges, and various taxes or surcharges. These fees cover costs associated with maintaining infrastructure, delivering gas to your property, and complying with regulations. Therms consumed directly determine the cost of the actual natural gas used.