Natural Gas Terminology

Btu

British thermal unit – the amount of heat required to raise one pound (about a pint) of water one degree Fahrenheit. Burning an old-fashioned kitchen match produces about one Btu of heat.

Commodity

Any product purchased by a consumer, in this case, natural gas.

Distributor

The entity that delivers the gas to the customer via a local pipeline system branching off of the interstate pipeline at the city gate. In the Nebraska Choice Gas Program, Black Hills, formerly known as SourceGas is the distributor.

Fixed Monthly Bill (ACE WeatherShield)

A fixed monthly rate that covers commodity and distribution charges, taxes and fees.

Fixed Rate Per Therm

A gas price that is fixed or locked in and does not fluctuate with the gas price on the natural gas futures market. This is a “locked-in” price per therm.

Market Rate Per Therm

A month-to-month market gas price per therm based upon market price fluctuations. This price includes two components: The market index and the adder (which includes shipping and supplier costs). The market index price follows market changes each month, while the adder remains constant through the gas year.

Natural Gas

Methane, CH4. A fossil fuel produced by decomposition of organic matter. The gas is naturally colorless and odorless. Odor is added as a safety precaution.

Supplier

The provider of the natural gas commodity. The supplier’s price includes the cost of the gas from the well, plus costs of interstate transmission to the city gate and the local distributor.

Therm

A metric unit of measurement that is equal to one hundred thousand Btu’s. It is the approximate amount of heating potential carried in 100 cubic feet of natural gas.

Usage Factor

The usage factor on the Choice Gas natural gas bill is an adjustment for pressure and temperature variance and converts the cubic feet volume to therms.

Transport Cost

Transport costs are the costs associated with moving natural gas along the interstate or intrastate pipelines and are included in a customer's commodity rate.