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  • Writer's pictureKent Hobart

Gas Conversion Factor


Bills for natural gas tend to be higher during the heating season, and as a result draw more attention this time of year. As you review your bill, you’ll probably see a Conversion or Heat Factor being used to increase the volume of gas on the invoice. Your gas utility uses this factor to comply with federal law regulating the sale of natural gas.



In 1978 Congress passed the Natural Gas Policy Act requiring natural gas sold in the United States to be priced based on the thermal or heating value of the commodity. This presented a problem for gas utilities for two reasons:


1. Gas Meters don't measure the thermal value of natural gas. Instead, gas meters measure gas in volumes of one hundred cubic feet or CCF.


2. The thermal value of natural gas isn’t consistent. Natural gas is about 85% methane, with the remaining 15% being a mixture of propane, ethane, butane and other hydrocarbons. As the percentages of these gasses fluctuate in a volume of natural gas, so does the thermal content of the natural gas.


Somewhere in a science class most of us were introduced to the term Btu or British Thermal Unit. You may remember that a Btu is the amount of energy required to raise the temperature of one pound of water one-degree Fahrenheit. Prices or rates for natural gas are developed using a thermal quantity of 100,000 Btus as the unit of measure.

The conversion or heat factor you see on your bill is the gas utility’s solution to the volume vs heating value problem. Utilities use sensitive equipment to measure the Btu content of the gas being delivered through their systems over a billing period and use that data to calculate the average thermal value per CCF of the natural gas being delivered to customers. This thermal value or conversion factor is then multiplied by the CCF volume measured by your meter to arrive at the number of 100,000 Btu units that will need to be included on your bill.


Some utilities call these units Therms, others reuse the term CCF. In both cases they refer to a volume of gas with a heating value of 100,000 Btus.


Still have questions? Call us at (813) 917-8952 and let us help with an answer.

 

Hi, I'm Kent Hobart and I'm different. I've been blessed with a knowledge of utility billing and rate structures that is rare and yes, a little weird.


I started Utility Refund Specialists as a way to use my unique skills in serving organizations like yours. We audit our client's utility bills and identify errors in the billing that earn them refunds from their utility providers. I know, it sounds crazy but 3 in every 4 clients we work with have errors in their bills.


The incidence of errors is so frequent and the refund amounts are large enough, we can perform the audits for free. We only get paid after we secure you a refund!


Interested in learning more? Use this link to set up a 30- minute discovery call. Want to talk sooner, give me a call at (813) 917-8952 or send me an email.


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