Natural Gas Rates and Terms
When choosing your electricity supplier, you must choose whether to go with a fixed, variable or unlimited rate. Each rate option has pros and cons.
What is a Fixed Rate?
A fixed price is an all-inclusive per Ccf/Mcf/Therms price that will remain the same for at least three billing cycles or the term of the contract, whichever is longer. This will give you certainty that your price will not change during the term of the agreement; however, if market prices fall, you may have to wait until your contract expires to get a lower price.
Unless you act prior to the expiration date in your contract, your rate may change to a monthly variable rate. You should read your contract’s disclosure statement for the terms and conditions to find out what happens after your term expires.
Predictability
Provides stability, especially when you’re budgeting your gas costs.
Cost for Certainty
The certainty of getting a fixed rate could cost you a little more money.
Wait for Lower Prices
If market prices fall you may have to wait until your contract expires to get a lower price.
Protection
Provides protection from sudden changes in gas rates in the market.
Cancellation Fees
Long-term fixed price contracts may have cancellation fees. Be sure to ask your supplier/read your contract for the terms and conditions.
What is a Variable Rate?
A variable price is an all-inclusive per Ccf/Mcf/Therms price that can change, by the hour, day, month, etc., according to the terms and conditions in the supplier’s disclosure statement.
If you select a variable rate, the rate may change with market conditions, so, if market prices increase, your rate may increase. If market prices drop, your rate may decrease.
Price drop
If market prices drop, your rate may decrease.
Price increase
If market prices increase, your rate may increase.
Potential to save
If you follow energy market prices and adjust your gas usage accordingly, you may save money.
Hard to budget
Changing rates may make it hard to predict your monthly bill and budget your expenses.
No cancellation fees
Variable contracts often do not have an early cancellation fee, but check with your supplier and your contract.
Extreme weather
Wholesale gas prices may increase dramatically during extreme weather. Extreme weather may also increase your gas usage which would also increase your bill.
What is an Unlimited Usage Flat Bill?
Another option that may be available in your area is the Unlimited Usage Flat Bill. This is a plan that is a locked-in monthly price that is not based on Ccf/Mcf/Therms usage. This gives consumer unlimited natural gas usage at one steady rate that cannot change during the contract’s term. A flat rate is defined as a fixed charge for goods and services that does not vary with changes in the amount used, volume consumed, or units purchased.
Gas Supplier Renewal and Options Notices
Prior to your contract expiring, you should receive two contract renewal notices from your current supplier. Suppliers should send out an initial renewal notice 60 to 75 days prior to your contract’s expiration date.
Additionally, 45 days prior to your contract’s expiration date, the supplier should provide you with an options notice, which includes:
- The specific changes to the terms of service being proposed
- Information on new prices
- An explanation of the customer’s options and how to exercise those options
- The date by which the customer must exercise one of the options
- The telephone numbers and website addresses for the Commission and the Office of Consumer Advocate (OCA)
Make sure you read these notices, as they will assist you in making the decision to stay with your current supplier or shop for another supplier.
IMPORTANT: If you choose to take no action with your renewal and options notices, your rate may change once the contract expires. For example, a fixed rate may change to a monthly variable rate. If you have a variable rate, once the term expires, you may be moved to a different variable rate that could be higher.
If you have a DUAL GAS/ELECTRIC CONTRACT with a supplier, you will receive an initial notice at least 60 days prior to your contract's expiration, and the dual gas/electric options notice at least 45 days prior to your contract's expiration date.
Your Rights and Protections
Know your rights as a utility customer so you can put them to work for you.
