The following is provided by the Railroad Commission of Texas:
WHY IS MY GAS BILL SO HIGH???
Why is my gas bill so high? It wasn’t high last month or even last year.
Because the price paid by your utility for natural gas fluctuates from month to month due to free market economic factors. The utility must purchase the natural gas commodity every day to assure a constant supply for its customers. The price it pays is market based. That is, the price your utility pays is based on supply and demand for gas in the market place. The utility bills you for that cost through the Gas Cost Adjustment (GCA) or Gas Cost Recovery (GCR).
How does the Gas Cost Adjustment (GCA) work?
The cost of natural gas changes daily. Because of these fluctuations, regulatory authorities have created the GCA factor to insure that the actual cost of gas is passed on to consumers. Since the base amount on a consumer’s bill does not include the cost of gas, the GCA is used by the utility to recover the actual cost it paid for gas during a particular billing cycle. Some utilities adjust this cost factor on a monthly, quarterly or semi-annually basis. The longer adjustment periods may result in a delayed impact on the consumers’ monthly bill during times of wide fluctuations in the price of natural gas.
Consumers’ gas bills fluctuate monthly because of:
The amount of gas consumed in your home, and
The market price paid by your utility to supply gas to you for heating your home, heating water, cooking and supplying gas to other appliances.
.Who regulates the price of natural gas?
Currently, neither the Railroad Commission nor any other governmental entity regulates the price of natural gas. The price is determined by competition. The companies that supply gas to your utility compete for your utility’s business.
Who makes all the profit on the cost of gas?
The only entity that is not allowed to earn a profit on the cost of gas is your utility!
Profit is earned by the royalty owners of the minerals in the ground, the companies that drill for and produce the natural gas, the plant operators that process the natural gas for residential and commercial consumption, the pipeline companies that transport the natural gas from the field to your utility, and the marketers that buy and sell the natural gas to your utility.
Are you sure the utility doesn’t earn a profit on the GCA?
Yes. Each regulatory authority, whether it is the city where you are located or the Railroad Commission of Texas, has the regulatory burden to assure the consumer that the utility does not earn a profit on the GCA. The Railroad Commission of Texas has an audit staff that periodically audits all utilities to assure that only the cost of gas is passed on to the consumer, no more or less.
My bill is so high. What can I do?
Your utility has payment alternatives that are offered to assist its consumers in spreading out your payment. You will need to contact your utility to determine if you qualify for these payment alternatives.
Do I have to pay my bill?
Yes. Just like your electric bill, telephone bill, cable bill, rent or mortgage, you MUST pay for the gas you consumed. It is your responsibility to make arrangements to pay your bill. If you need assistance, contact your utility.