What Does ‘Per Therm’ Mean on Your Gas Bill?
Demystify your natural gas bill. Learn what "per therm" signifies, how it measures your energy use, and why it's key to understanding costs.
Understanding your monthly natural gas bill can sometimes feel complex, especially when you encounter terms like “therm.” This unit of measurement is a fundamental component in calculating your energy consumption and the corresponding costs. Demystifying the therm helps clarify how your household’s natural gas usage translates into financial charges and provides a clearer picture of your energy footprint.
What a Therm Represents
A therm is a unit of heat energy that measures the heat content of natural gas. One therm is defined as 100,000 British Thermal Units (BTUs). A British Thermal Unit represents the amount of heat energy to raise the temperature of one pound of water by one degree Fahrenheit. This makes the therm a larger, more practical unit for billing purposes than individual BTUs. For context, one therm is approximately equivalent to 29.3 kilowatt-hours of energy.
Why Therms are Used for Natural Gas Billing
Natural gas is not billed by volume alone because its energy content can vary. Factors like temperature, pressure, and gas composition (e.g., methane, ethane, propane) can alter the amount of heat produced per cubic foot. Billing solely on volume would mean customers might pay the same amount for a cubic foot of gas that delivers less heat. Therefore, using therms ensures customers are charged for the actual heat energy delivered to their homes. This method provides a consistent and equitable basis for billing across different regions and varying gas supplies.
How Natural Gas Usage is Converted to Therms
Natural gas meters record consumption in volumetric units like cubic feet (CF) or hundreds of cubic feet (CCF). To convert this volumetric measurement into therms, utility companies apply a calculation. They use a “therm factor” or “BTU factor” that represents the heat content of the gas supplied to an area. This factor accounts for the energy density of the gas, which can fluctuate monthly.
The conversion process involves multiplying the measured volumetric usage by this factor, then dividing by 100,000 to arrive at the number of therms. For instance, if your meter reads 10 CCF and the BTU factor for that month is 1,038 BTUs per cubic foot, the calculation would be (10 CCF 1,038 BTUs/CF) / 100,000 = 10.38 therms. This factor accounts for variations in gas quality, pressure, and altitude in your bill.
How Therms Influence Your Bill
The number of therms consumed directly determines your natural gas bill’s energy charge. Utility companies establish a “cost per therm” or “rate per therm,” which is multiplied by your therm usage to calculate this charge. This charge reflects the cost the utility pays to acquire and transport natural gas, usually without additional markup.
While the energy charge is tied to therms, your bill includes other charges. These include fixed customer charges, fees for gas delivery through pipelines, and taxes. However, therm usage and the rate per therm are the primary drivers of the variable cost for heating and appliance use. You can locate your monthly therm usage and the rate applied on your natural gas statement.