Gas Pricing

Your gas bill has two main parts:

  • Gas supply: The cost of the gas itself.

  • Gas delivery: The cost of getting the gas to your home.

Gas Supply

This is the price of the natural gas you use. You either buy it from your utility or from a retail gas supplier.

If you don’t choose a retail supplier, your utility buys gas for you.

  • Utilities cannot make a profit on the gas itself.

  • The supply price reflects what the utility paid on the gas market.

  • The price changes monthly based on expected demand.

  • Each year, the Public Service Commission reviews the utility's gas purchases. If the utility spent more than expected, a surcharge is added to your bill. If it spent less, you get a credit on your bil

If you chose to buy from a retail supplier.

  • They can make a profit on the gas they sell.

  • Their prices and practices are not reviewed by the Public Service Commission.

  • They have more freedom in setting their prices.

Gas Delivery

This is what you pay to have the gas delivered to your home. It's paid to the utility, even if you buy your gas from a different supplier.

Gas delivery charges include:

  • Base Rates (fixed and usage-based)

  • Surcharges (additional fees for specific programs like EmPOWER and STRIDE)
     

    Base Rates

    These mostly cover the cost of building and maintaining the gas system, along with administrative and staffing expenses. Gas utilities are also entitled by law to earn a reasonable return on their investments in the distribution system. Base rates are changed periodically through base rate case proceedings. These cases determine the Customer Charge and the Distribution Charge on your bill.

  • Customer Charge: This is a fixed fee you pay every month, no matter how much gas you use. Since most people use more gas during the winter months, this fixed charge aims to provide a steady revenue stream to the utilities.

  • Distribution Charge: This is a volumetric charge directly tied to the quantity of gas consumed each month, so the more gas you use the more you pay for this charge. The rate is a fixed, per-therm rate. A therm is a way to measure natural gas. It equals 100,000 British thermal units (BTUs). One BTU is the amount of energy needed to heat one pound of water by one degree Fahrenheit.
     

    Surcharges

    There are two surcharges included on your bill: the STRIDE charge and the EmPOWER charge. These charges are set by the Public Service Commission in individual proceedings outside of base rate cases.

  • STRIDE Charge: This flat-rate charge pays for replacing old gas pipes and infrastructure at an accelerated rate. The STRIDE charge was approved by the Commission to allow the utility to recover expenses for certain infrastructure replacement work on an accelerated basis. This charge changes annually, based on the yearly STRIDE-eligible work a utility is completing. If a utility files to change its base rates, STRIDE-eligible work is included in the utility’s rate base. This resets the surcharge to zero. For more information about STRIDE, click here.

  • EmPOWER MD Charge: This charge supports energy-saving programs, like rebates for efficient appliances. The more gas you use, the higher this charge will be. This fee is reviewed and updated annually. The EmPOWER charge is based on the recommended level of funding needed to adequately fund utility-sponsored energy efficiency and conservation programs and changes on an annual basis. For more information about EmPOWER Maryland, click here.