What is the Purchased Gas Adjustment (PGA)?

Natural Gas is a commodity that is traded on the open market; therefore, the price of natural gas is dependent upon supply and demand. The City of Kings Mountain purchases natural gas on the open market. In addition to paying for the cost of the gas itself, the City also pays to have it transported. Therefore, the City’s natural gas rates are set using a base rate that accounts for transportation, commodity and utility costs. The rates are then adjusted each month based on the fluctuating commodity price of the gas itself. The rate mechanism for adjusting for the fluctuation in the price of natural gas is known as the Purchased Gas Adjustment (PGA). The City of Kings Mountain does not profit from these fluctuations in gas costs. Instead, all costs associated with increases or decreases in the commodity price of natural gas are passed along to customers.

For example, if the PGA is -$0.30, then the residential gas sales rate is reduced by $0.30 per therm.

(See City of Kings Mountain Natural Gas Rate Schedule)

How are operating costs for Natural Gas appliances determined?

Natural gas appliances have a BTU rating, which represents the amount of gas consumed in a one-hour period. Natural gas meters read usage in CCFs, but the customer is billed in therms. One therm equals 100,000 BTUs.

To calculate how much an appliance will cost per hour to run, simply multiply the BTU rating by the current natural gas rate and divide by 100,000. For example, using the natural gas rate of $0.85183 per therm, it would cost $0.26 per hour to use an appliance with a rating of 30,000 BTUs.

How are Natural Gas costs calculated for the monthly utility bill?

To estimate the cost of natural gas usage in the home, first determine the usage by subtracting the previous meter reading from the current after a certain amount of time. For example, if the previous meter reading is 5429 and the current is 5480, the usage would be 51 CCF for that time period. The usage is measured in CCFs (volume) but billed in therms (heat factor). To convert the usage from CCFs into therms, the City of Kings Mountain must first multiply the usage by the pressure factor and therm factor.

Pressure Factor:

Some customers receive natural gas at a higher pressure and a pressure factor must be applied when calculating their bill. This is to ensure that their gas usage is properly measured. The pressure factor varies per customer because it depends on the delivery pressure, which is determined by the type of meter index --

I.E. the row of dials (analog) or numbers (digital). For most new meters, a pressure factor is used to adjust the usage measurement.

Therm Factor:

The “Multiplier/Factor” on the utility bill is the therm factor. Similar to the pressure factor, the therm factor is used to adjust the usage measurement to ensure an accurate reading. Natural gas is measured in CCFs but billed in therms. A therm factor is necessary to convert the CCFs to therms for billing purposes. The therm factor is applied to all natural gas customers’ utility bills. The value of the therm factor changes annually.

The cost of the usage would then be calculated as below using a pressure factor of

1.000, a therm factor of 1.067 and the following residential rates: $1.11646 for the first 10 therms and $0.85183 for the remaining therms.

5480 - 5429 = 51 CCF (gas usage)

51 CCF (usage) X 1.000 (pressure factor) = 51

51 X 1.067 (therm factor) = 54.417

$1.11646 X 10 = $11.16 (for the first 10 therms)

54.417 - 10 = 44.417 (remaining therms)

44.417 X $0.85183 = $37.84

$11.16 + $37.84 = $49.00*

*Total does not include monthly facilities charge.

* All figures listed above are examples and are not actual rates.

How do customers get Natural Gas installed at a home or business?

Whether installing new service or converting existing appliances, there are several steps to getting natural gas installed. Customers should first decide if they would be purchasing new appliances or converting existing appliances. In order for natural gas to be available to a home or business, there must be a gas main in close proximity. A service line can then be run to a home or building. For assistance with the application process, customers should contact the City’s Gas Department in person, by phone, or online. Once the gas application is approved by the Gas department, the individual will bring the approved tap application to customer service with information such as name, address, telephone number, and social security number will be required for the application. Commercial and industrial customers also need to provide information about the anticipated load. Once the application is complete, Customer Service will forward the application to the gas division. A gas division representative will contact the customer to schedule a time to visit the property. The gas division will determine where the service meter site will be located. All underground utilities must also be located before a gas line can be installed. An approximate installation date may be set at this point. Gas division service workers will be on site to dig a trench and install the underground line on the specified date.

Is it possible to convert existing appliances to natural gas?

Many appliances can be converted from another fuel source to natural gas by using a conversion kit. However, some appliances cannot be converted or are too expensive to convert. Customers should contact a licensed mechanical contractor to evaluate the pros and cons of converting existing appliances or purchasing new ones. Customers are responsible for the conversion or installation costs, which are based on time and materials (labor, parts, and materials, permit costs, etc.). Customers should evaluate the economic feasibility of converting existing appliances or purchasing new ones.

Is Natural Gas safe?

Natural gas is one of the safest forms of energy available. Based on information from the American Gas Association (AGA), between 1986 and 2004, more than 650,000 miles of pipeline were added to the nation’s natural gas distribution system. During the same time, the number of reportable incidents on distribution lines DECREASED by 28%. According to the National Transportation Safety Board, in 2002, there were only 12 fatalities associated with natural gas pipelines. In contrast, there were more than 42,000 transportation fatalities and another combined 2,000 fatalities for boating, aviation, and railroads.

Can Natural Gas be used as an alternative energy source?

Because natural gas is such an environmentally friendly fuel, it is being used more frequently as an alternative fuel source, particularly in electric generation. Natural gas can be used in a variety of applications on a small or large scale. Natural gas generators are used at homes and businesses as backup power or to reduce load during peak hours. Natural gas is also used as an alternate fuel source to generate electricity at large power plants. Vehicles fueled by natural gas are an emerging technology helping to lower fuel emissions.

What are the environmental advantages to using Natural Gas?

The environmental benefits of natural gas include fewer impurities and less pollution when burned due to a chemically complex structure. Because natural gas releases fewer impurities, it addresses a number of environmental concerns such as smog, acid rain, gas emissions, and lowering individual carbon footprints.

Why choose Natural Gas?

Natural gas can be used for heating, water heating, drying clothes, cooking, and fireplaces, among other uses. With natural gas, customers enjoy efficient heating, continuous hot water (with tankless water heaters), and precise cooking temperatures. There are other benefits of using natural gas. For instance, more than 80% of the natural gas used in the U.S. is produced domestically. Also, service is less vulnerable to storms and extreme weather because natural gas is delivered via an underground distribution system. Natural gas is always available; which means customers will not run out, and there is no need for a storage tank. In addition to being reliable, natural gas is also efficient. Approximately 92% of the natural gas produced at the wellhead is delivered to customers as usable energy. Taking into account the full-fuel-cycle from production to the customer, homes using natural gas appliances use 32% less energy than similar homes using all electric appliances according to the American Gas Association (AGA). Another benefit of using natural gas is a reduced carbon footprint. Homes using natural gas appliances have approximately 46% less carbon footprint than homes using electricity generated from coal and 30% less than fuel oil. Natural gas radiant heat and fireplaces also improve the air quality in the home by cutting down on dust and allergens.

What is Natural Gas?

Natural gas is an odorless, colorless, non-toxic, non-corrosive and shapeless gas in its pure form. It is a mixture of hydrocarbon gases that is primarily formed of methane. Natural gas has a high energy density, meaning its unique, natural properties allow it to work harder and more efficiently with less waste.

Gas burner