What Am I Paying for in My Natural Gas Bill? (Energy Analysis 05/31/2011)

Report May 31, 2011

When a residential customer gets their natural gas bill, they tend to focus on the total cost of the bill and may not realize that the utility retains only a fraction of the payment as income. In fact, over half of the bill for the typical residential customer goes toward 1) the purchase of gas from a producer or marketer and 2) the delivery of gas to the utility by an inter- or intrastate pipeline. The utility then incurs operational costs to get that gas to the customer, including delivery expenses, measuring the amount of gas consumed, and sending out the bill. There are also other business expenses, such as taxes, past due bills, costs associated with the plant (primarily pipelines) and equipment. By the time the utility pays its bills and employees, about a nickel of every dollar paid by the residential customer remains. That net income is used to compensate investors and to reinvest in utility pipelines and other facilities. This brief report explains the components of a natural gas utility bill.

Full Report: What Am I Paying For In My Natural Gas Bill? (Energy Analysis 05/31/2011)

Direct Inquiries to: Bruce McDowellDirector Policy Analysis, (202) 824-7131

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