Gas Pricing

Your gas bill is comprised of two separate charges: Gas Supply and Gas Delivery.

Gas Supply refers to the price of the gas delivered to your home. This charge is paid to your utility or retail supplier (if you’ve signed up with one).

Gas Delivery refers to a cost of delivering the gas to your home and is always paid by the utility. Charges can either be flat-rate or volumetric. Flat-rates does not change based on how much gas you consumer; volumetric rates are directly tied to your consumption and are assessed on a per-therm basis. A therm is a unit of measurement that represents the energy content of natural gas and is equal to 100,000 British thermal units (BTUs). One BTU is the amount of heat needed to increase the temperature of one pound of water by one degree Fahrenheit.

Gas Supply

If you haven’t signed on with a retail gas supplier, your utility procures the physical gas you use. Utilities are not allowed to make a profit off the sale of the physical gas. Accordingly, the Gas Supply price charged by your utility reflects the market price the utility paid. The price changes each month, based on the utility’s estimate of how much it will have to pay to procure the gas needed to satisfy customer demand. Each year, the Commission reviews the utility’s procurement practices to ensure they are reasonable and competitive. The Commission also compares the utility’s forecasted procurement costs and their actual procurement costs. If the utility spent more than it anticipated it would, a surcharge is added to the gas supply cost for the next twelve months. If the utility spent less than it anticipated, a customer credit is added for the next twelve months.

If you’ve signed on with a retail gas supplier, that supplier procures the gas you consume. Unlike utilities, retail suppliers make a profit off the gas they sell. Their procurement practices are also not subject to annual review by the Public Service Commission. Retail suppliers have far more leeway in how much they charge.

Gas Delivery

The Gas Delivery charge concerns the cost of distributing gas to customers. The Gas Delivery charge is comprised of two main components: base rates and surcharges. Base rates include the Customer Charge and Distribution Charge. Surcharges include the STRIDE charge and EmPower Charge.


Base Rates

Gas utilities are entitled by law to earn a reasonable return on their investments in the distribution system, as well as recovery of any prudent expenses needed to provide safe, reliable, efficient, and economic gas service. Base rates primarily reflect recovery of infrastructure-related costs, although administrative and personnel costs are also factored into base rates. 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 charge is the same each month, regardless of how much gas you consumer. Since gas consumption is generally seasonal—with the majority of gas consumed for heating 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. The rate is a fixed, per-therm rate. A therm is a measure that differs each month based on how much gas you consume.



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

STRIDE Charge: This charge reflects the flat-rate STRIDE surcharge 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 is a volumetric charge used to fund energy efficiency programs through EmPOWER Maryland. 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.