Gas Billing Considerations

Complex systems

Consumers have been billed for decades using a clear and easy to understand system based upon consumption. In most countries there was the cubic meter for gas billing. The cost would linearly increase based on the units of energy being recorded as used by the utility meter. The meter would be read every month and a consumer bill was released.

Current energy billing got more complex as utility companies tried to find ways of being more creative. Government intervention also introduced various surcharges and additional costs based on consumption as well as a specific way to calculate consumption. This lead to convoluted systems that use tiered pricing, service fees, various surcharges.

Complex billing is one key reason that energy consumption and its true impact is harder to determine. In order to have effective cost reductions it is necessary to understand your current billing and contract terms.

Current contract and billing

It is important to know your current billing system and this is presented both in the utility provider contract as well as it is reflected on your bills. Although there may be better offers to the one that is currently enforced, it is important to understand the current terms and how well your current consumption pattern fits them so you need to make some initial assessments before taking any action.

Being informed of other offers from your utility company is helpful in finding out the best long term approach but you should not have extreme expectations. Consumption alone is still the biggest factor in the total cost. There may be some difficulty in moving from one billing choice to another from the same utility company such as a specific contract duration being passed or other limitations.

Note that even though a flat rate based on consumption is the most obvious option and should be the cheapest, utility companies actively discourage such a choice by making the energy unit price much higher than on other ways of billing. This is clearly so for electrical energy billing as here the energy unit price has always been higher than on gas and the cost impact on consumers was also the highest.

Gas billing

Gas billing is almost always based upon a flat rate determined through gas volume being passed onto the consumer but this may change and the cost structure already includes various surcharges and adjustments. Some utility companies also have tiered monthly consumption ranges that reduce cost as the client ensures a certain energy consumption every year.

Flat rate

In Europe, for instance, the metered gas, as measured in cubic centimeters, may have an equivalent value adjusted based on thermal (burning) energy release, even though it still is mostly a flat rate, ending up as megawatt/hour consumption billing. In the future, a variable rate system, similar to electricity, may be introduced.

Currently, the flat rate system, even if it seems to be present, is not a true flat rate system but a hybrid flat rate, since it has additional costs that are considered in the billed total and some of these costs do have some variation to it.

Flat rate with tiered consumption range

Sometimes, this system is being transparently offered to consumers or it is being enforced as their consumption is determined. This way of billing sets a lower energy unit rate for higher consumers, based on different consumption ranges.

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

Future systems

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.