Making Sense of Your Gas Bill

Natural gas usage is billed by the therm. One therm equals the amount of natural gas needed to run a typical residential furnace for one hour. Your gas meter measures the volume of gas in cubic feet, which is converted to therms on your bill.

A customer’s previous and current meter readings are listed on the bill, and the difference between the two is the gas usage for the current billing period.

There are three types of charges on gas bills: fixed monthly fees, gas costs and taxes and surcharges.

Fixed monthly fees are set by the Illinois Commerce Commission (ICC) and stay the same no matter how much natural gas you use. Gas costs vary monthly based on your usage and the changing price of gas bought by the utility.

Utilities should go to a customer’s home and read the gas meter at least once every other month. Check your bill to make sure that it is not being estimated more than two months in a row. If it is, call the utility, ask why it’s not reading the meter, and request an actual reading.

If a utility does estimate usage, the amount will be based on last year’s usage for the same month, adjusted for weather.

Consumers with questions about their gas bills can call CUB’s Consumer Hotline at

Common Charges on Gas Bills

Distribution Charge
The ICC sets the rate your utility can charge you for delivering natural gas through its pipes. Gas usage is converted to therms and multiplied by the rate to come up with the charge. It’s also sometimes called the energy charge or the delivery charge.

Storage Service Charge
Peoples and North Shore Gas bills include a separate line item to recover the cost of storing customers’ yearly supply of natural gas. Other utilities roll these storage costs into the distribution charge.

Customer Charge
This fee is supposed to cover all the company’s fixed service costs, such as billing and meter readings, that don’t vary with usage. It’s also called the basic service charge or the account charge.

Purchased Gas Adjustment Charge
Under the law, gas utilities don’t make a profit off this per therm charge, which is used to pass along the price of natural gas that utilities pay to suppliers. The ICC doesn’t approve the charge in advance. However, the commission reviews the charge annually and can order a refund for customers if it finds the utilities weren’t using sound business practices to buy gas at a reasonable cost. It’s also called the cost of gas charge, the natural gas cost, the gas charge adjustment or the gas supply charge.

State Utility Tax
This charge is 5 percent of current charges before taxes or 2.4 cents per therm, whatever is lower. The tax also is called the public utility tax or the Illinois gas revenue tax.

Municipal Tax
Municipalities can impose their own utility taxes, but state law caps the amount they can collect. It’s also called a franchise tax.

Regulatory Tax
This tenth-of-a-cent tax helps fund the ICC, which regulates Illinois utilities. It’s also called the Illinois CC assessment, the Illinois gross revenue tax or the utility fund tax.

Environmental Adjustment Charge
The ICC allows companies to charge customers for the cost of cleaning up toxic waste at old gas manufacturing sites. This per-therm charge also is called the environmental charge, the environmental activities adjustment, the environmental activities charge and the environmental recovery charge.

The Customer Charge and Distribution Charge

The chart below summarizes two major charges on your bill that are set by the Illinois Commerce Commission (ICC). Keep in mind that this chart does not include the Purchased Gas Adjustment (PGA), which fluctuates based on the market price of gas and makes up a large chunk of your bill. (Rates below are current as of May 2016.)

CompanyMonthly customer Charge*Distribution Charge (per therm)
$13.554.85 cents for all therms
Peoples Gas
$33.51 for heating ($32.31 with alternative supplier)

$17.13 for non-heating ($16.96 with alternative supplier)
19.477 cents for heating
14.964 for non-heating
3.704 cents Storage charge (0.57 cents with alternative supplier)
North Shore Gas
$25.32 for heating ($24.78 with alternative supplier)

$16.42 for non-heating ($16.19 with alternative supplier)
11.138 cents for heating
8.547 for non-heating
0.964 cents Storage charge (0.10 cents with alternative supplier)
Ameren Zone 1
(formerly CIPS)
$21.4214.807 cents for all therms
Ameren Zone 2
(formerly CILCO)
$21.3714.807 cents for all therms
Ameren Zone 3
(formerly IP)
$21.6214.807 cents for all therms
$13.1412.901 cents for all therms
*The “Monthly Customer Charge” listed includes small charges that go into state funds to subsidize heating costs for low-income households and for the development of renewable energy and “clean coal technology,” as well as an uncollectibles rider.