Gas Billing Considerations: Difference between revisions

Consumption alone is still the biggest factor in the total cost. Keep in mind that having a way of billing that is similar to electricity brings its own set of challenges. This puts gas and electrical appliances, more or less, on equal terms. As a consequence, not only the efficiency of a particular class of products is important, but also the actual energy input, making decisions to repair, upgrade or replace certain gas appliances a much more difficult proposition.

Gas billing is almost always based upon a flat rate, determined through gas volume being passed onto the consumer. However, this is initial value is compounded in a calculus, as the actual used gas is converted into an equivalent energy unit input, measured in Kwhs, as for electricity, then billed accordingly.  

A fixed monthly cost that is established through contract, based on the consumption profile agreed upon. In many cases, this fixed cost is established by the utility distributor and cannot be chosen otherwise.

Previously, energy was charged only based on a flat rate per unit of consumption, which was the volume of gas being passed to the consumer. The energy unit cost could be annually adjusted and was decided by the national government. None of the developed countries still use this system to determine energy cost.

Keep in mind that energy unit cost is a derived value based on the pre-determined performance of gas. through production and distribution costs, that may or may not be separately reflected on the energy bill. The calculus below is repeated for each consumption price tier presented below.

'''Delivered Energy''' = (Gas volume x VC x CV ) x KC

VC is Volume correction factor, typically 1.02264

KC is Kilowatt/hour conversion rate, always 3.6

CV is Calorific value, between 38-41 MJ/m3, typically 39.5 MJ/m3

  '''Energy cost''' = Delivered energy x Kwh unit price

===Tiered consumption range (most popular)===

This system is devised to encourage consumers to use less energy. Commonly, there are three price tiers for the energy unit, and any consumption over a specific range is billed separately. The model below is based on Japan.

Another European model, for instance, partially subsidies the energy price ending in a discount of 47% at tier 1 and 25% at tier 2 from the full energy unit price, with different consumption ranges such as below 100 kw/h and between 100-300 kw/h. Consumption ranges and discounts can change over time.

! Tier !! Consumption range !! Energy unit cost  

| 1 || 0-120 kw/h || 25% discount of full price

| 2 || 120-300 kw/h || 15% discount of full price

| 3 || 300 kwh/h and more || full price

 

 

With liberalized energy markets in most countries, there is the potential for an additional adjustment either applied in the base energy unit price or separately represented by a fuel cost adjustment as on current electricity bills in some countries. When not present, as is the case here, the energy unit price (in Kwh) is established and updated yearly.

The V.A.T. as is commonly known, can change by national government decision. It is typically between 5-25%, depending on country and product or service.

 

For all intents and purposes, the current billing system uses a flat rate energy consumption with certain adjustments. In Britain, Europe and Japan, but also in many other developed countries around the world, the metered gas, as measured in cubic centimeters, is adjusted for pressure and temperature and given an equivalent value adjusted based on thermal (burning) energy release, known as calorific value. A typical billing ends up as below.

Sometimes, this system is being transparently offered to consumers or it is being enforced as their consumption is determined. This way of billing traditionally set a lower energy unit rate for higher consumers, based on different consumption ranges. This depended on country and utility distributor conditions.

It is important to note that split fuel cost structures may also be introduced as methane is mixed with hydrogen, in different amounts up to 30%, as it seems, in the next decade. This will obviously increase the cost of gas but slightly reduce air pollution and dependency of foreign gas imports.

The same systems employed on electricity metering and billing may also be applied to gas, in the future, as it is entirely possible to do so as soon as more advanced meters come into the market.