The "True" Cents-Per-Therm

"Figuring Out the Bottomline"

What is the "true" cents-per-therm that you pay for natural gas? The "true" cents-per-therm is defined as the total bill (before taxes) for current service divided by the number of therms used during the current meter reading period. Evaluating bills in this manner allows consumers to make a "level-field" comparison of marketers' prices without having to be concerned with whether certain charges are reflected in the commodity cost or whether the charges are assessed based upon the dedicated design day capacity factor (DDDC), also called the premise demand factor. Divide the amount of the bill (before taxes) by the number of therms used. The result is your "true" cents-per-therm.

In order to make a comparison of what you would pay if served by different marketers, you will need your bill, a copy of the marketers' charges (which you may download from the Commission's web site,, patience and time to calculate your bill. It is a good idea to compute your bill for different seasons of the year to get an overall picture of what you would have paid under varying circumstances.

On your bill, identify the number of therms used, the DDDC factor and the customer service charge. These are the components you will need to compute your bill using each marketer's pricing structure.

Let's figure the bottomline for Bill Jones using the following information: monthly bill = $157.15 before taxes, therms used = 200, customer service charge = $6.95, the DDDC factor = 2.5, cents-per-therm = $0.68, and interstate capacity charge = $5.68 per DDDC.

Step 1              Multiply cents-per-therm X total therms used (.68 X 200 = $136.00)
Step 2 Compute interstate capacity charge [DDDC factor X $5.68] (5.68 X 2.5 = $14.20)
*Note: This step may be omitted if the interstate pipeline capacity is included in the commodity charge (cents-per-therm).
Step 3 Add results from Steps 1 and 2, and the customer service charge. ($136.00 + $14.20 + $6.95 = $157.15, total bill)
Step 4 Divide total bill by total therms ($157.15 / 200 = $0.785 cents-per-therm or $0.79)

The result of the above calculations indicates that the true cents-per-therm is $0.79. It is important that you know that the above result is specific to "Bill Jones" and other consumers who are similarly situated.

If you have any questions or need assistance, please click here to contact the Georgia Public Service Commission's Consumer Affairs Unit.