Natural Gas Glossary

Almost everyone uses natural gas, but very few understand the terminology.  Use this natural gas glossary to decode your monthly bill.

Energy Deregulation:  Policy enacted in Michigan to increase supplier competition in order to lower consumer natural gas prices.  Energy deregulation gives consumers the ability to choose their natural gas supplier based on the best rate and plan.

Variable Rate:  Rate type that changes on a regular schedule (generally monthly) based on various market forces.  Provision Power and Gas’s variable rate is based on weather, supply and demand.  Variable rates generally offer the consumer the most flexibility to change suppliers.

Fixed Rate: Rate type that maintains a consistent price per unit over time (often for a year or more).  Fixed Rates offer the consumer the most stability but also make it difficult to take advantage of potential dips in natural gas prices.  Fixed rates are often associated with early termination fees, so it’s important to check your Terms of Service.

Capped Rate: Rate type that changes on a regular schedule with the added security of a maximum or “Rate Cap”.  A typical Capped Rate changes monthly and is guaranteed not to go above a certain amount.  Terms of Service for Capped Rates vary, so it’s always good to check with your current supplier.

Alternative Gas Supplier (AGS):  Natural Gas Supplier licensed by the Michigan Public Service Commission and the local Utility to supply natural gas to consumers in a specific area.  Provision Power and Gas is an Alternative Gas Supplier.

Gas Cost Recovery (GCR):  Natural gas rate from the Utility that changes monthly based on the price the Utility pays for the natural gas.

CCF: Unit of measure for natural gas.  1 CCF = 100 cubic feet

MCF: Unit of measure for natural gas.  1 MCF = 1,000 cubic feet

Therm: Unit of measure for natural gas.  1 therm = 1 Ccf

Budget Billing: Payment program from the Utility that a) uses your account history to estimate how much gas you will use over the next 12 months; and b) spreads out your estimated payments over the course of a year.  This helps many consumers by making it easier to budget for the monthly gas bill.

Customer Charge: Fixed monthly charge covering costs of meter reading, billing, equipment and maintenance expenses, whether or not the service is used.

Distribution Charge: Cost to deliver natural gas to a home or business.  This cost comes from the Utility, regardless of whether an AGS is selected.

Gas Customer Choice Program: A program approved by the Michigan Public Service Commission (MPSC) that enables retail customers to choose an alternative gas supplier.

Residential Customer: A purchaser of natural gas that is supplied or distributed by a utility for residential purposes.

Small Commercial Customer: A non-residential customer (business) with aggregate usage of 500 Mcf of natural gas or less per year.

Large Commercial Customer: A non-residential customer (business) with aggregate usage of above 500 Mcf per year.