FREQUENTLY ASKED QUESTIONS - GAS
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.
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
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,
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.
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.
This surcharge reflects the recovery of the incremental costs to utilities of promoting energy efficiency as
ordered by this Commission.
This surcharge reflects the recovery of the difference between the level of base rate revenues established in
a natural gas utility's last rate case and the level of base revenues in the current BDA Evaluation Period. No
BDA Adjustment is reflected on customer's bill when the base rate revenues determined in the last rate case are
higher than the BDA Evaluation Period revenues.
This surcharge reflects the recovery of expenditures related to expedited replacement of cast-iron mains, bar
steel mains and associated services.
This surcharge reflects the recovery of investments and expenses that a utility Company has reasonably incurred as a
direct result of legislative or regulatory requirements involving the protection of the public health, safety and the