FREQUENTLY ASKED QUESTIONS - GAS

INDEX:

Customer Charge

Distribution or Delivery Rate

Cost of Gas or Gas Supply Rate

Weather Normalization Adjustment

Reading Your Gas Meter

What is the customer charge?

The customer charge is a flat charge applied each month regardless of the amount of natural gas used.  The charge is designed to recover the cost of such items as customer accounting, mailing, billing and metering.

What is the distribution or delivery rate?

The distribution or delivery rate is based on utility operating expenses, including depreciation and income taxes, plus a return on the utility's assets used in providing utility service and is intended to compensate the utility for the cost of delivering natural gas through their pipeline system to end-use customers.

What is the cost of gas or gas supply rate?

The cost of gas or gas supply rate is the per unit rate for natural gas sold to customers. There is no mark-up or profit added to the cost of gas. The utilities only recover from customers the actual cost of the natural gas commodity and the cost of transporting that gas from gas producing regions over interstate pipelines to the natural gas utilities. The costs recovered through the cost of gas supply mechanism are subject to Commission review and approval to ensure that the utilities purchase the gas in a prudent manner consistent with the requirements of Arkansas law. The rate changes two times a year, April and November, respectively.

Do natural gas utilities profit from the sale of natural gas?

No. Natural gas utilities do not make a profit on the natural gas that is sold to customers. Natural gas utilities simply recover the cost of the natural gas they purchase through the purchased gas adjustment mechanism. Only the actual costs paid to suppliers are recovered from customers. The costs recovered are subject to Commission review and approval.

What is the purpose of the weather normalization adjustment?

The purpose of the weather normalization adjustment (WNA) is to adjust customers’ bills to "normal weather." If during a billing cycle the weather is colder than normal, the customer will receive a credit on the bill. Conversely, warmer than normal weather will cause a charge to appear on customers’ bills. The WNA amount shown on a customer’s bill will vary based on the actual weather experienced during the billing cycle on which the bill is based.

How to read your Gas meter

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Revised: June 16, 2008.