Texas commercial gas: LDC choice and billing

Local distribution companies control delivery

Delivery in Texas belongs to the local distribution company, or LDC, which owns the pipe, reads the meter and bills regulated delivery charges. The investor-owned footprint is carried by a few large divisions — Atmos Energy's Mid-Tex division across north and central Texas including Dallas–Fort Worth, Atmos's West Texas division, CenterPoint Energy in the Houston area, and Texas Gas Service in Austin, El Paso, the Rio Grande Valley and parts of West and central Texas — sitting alongside separately owned systems and city operations. The Railroad Commission counts 27 investor-owned gas utilities and 85 municipally owned systems in the state, serving about 5.1 million customers, with more than 1,100 Texas cities taking gas service and 92 of them on a municipal system. Which utility serves a given building is a question about the street address, not the city name.

• Atmos Energy's Mid-Tex division covers much of north and central Texas, including Dallas–Fort Worth.
• CenterPoint Energy serves the Houston region and southeast Texas.
• Texas Gas Service operates in Austin, El Paso, the Rio Grande Valley and parts of West Texas.
• 27 investor-owned gas utilities and 85 municipal systems serve about 5.1 million Texas customers.
• Confirm the serving utility by service address and meter, not by the city name.

Supplier choice is real, but the tariff decides who qualifies

Commercial choice in Texas is a transportation arrangement, not a statewide programme. Where the serving utility's tariff provides it, a business buys the commodity from a marketer and pays the LDC to move and meter it; where the tariff does not, the LDC supplies the gas as bundled sales service. There is no single usage threshold that settles this for the state. Eligibility, minimum volume, balancing duties, deposits and curtailment terms come from the LDC's own tariff and service classification, and they differ between utilities and between classes. That is why the same consumption figure can qualify at one address and not at the next, and why the tariff, rather than a rule of thumb, is the document that answers the question.

• Choice means buying the commodity from a marketer while the LDC delivers and meters it.
• Eligibility, minimum volume and balancing terms come from the LDC's tariff and service class.
• No single statewide usage threshold applies — thresholds are set utility by utility.
• Confirm the tariff treatment for the specific account before soliciting supply.

Who regulates Texas gas, and who does not

The regulator for gas is the Railroad Commission of Texas, not the Public Utility Commission that runs the electric market. The Commission holds exclusive original jurisdiction over gas utility rates in areas outside municipalities — 'environs' adjacent to a city and served by the same distribution system, and 'special rate areas' outside and not adjacent to any city — as well as over the rates and services of a pipeline that delivers gas to a distribution utility. Inside a municipality served by an investor-owned utility, the city holds original jurisdiction over rates, operations and services, with the Commission as the appellate authority; and the Commission has no authority at all over a municipally owned gas utility's rates within the municipality's own boundaries. For a business the consequence is direct: where the gas is delivered decides who can change the delivery charge and who hears a complaint, and in a municipal territory that is the city, not the state.

• The Railroad Commission regulates gas utilities; the PUC regulates electricity.
• The RRC has exclusive original jurisdiction outside municipalities, in environs and special rate areas.
• Inside a city served by an investor-owned utility, the city has original jurisdiction and the RRC is appellate.
• The RRC has no authority over a municipal gas system's rates within its own boundaries.

Understanding therms, Mcf, and Ccf

Gas moves through the system by volume and is billed by heat, so the two units only connect through the gas's heat content. A therm is 100,000 Btu; a Ccf is 100 cubic feet and an Mcf is 1,000 cubic feet. EIA's latest national average heat content is about 1,037 Btu per cubic foot, which puts one Ccf near 1.037 therms and one Mcf near 10.37 therms. The useful arithmetic follows from that: to move a price quoted per Mcf onto a per-therm basis, divide by 10.37, and to move a per-therm price onto a per-Mcf basis, multiply by the same figure. Because the heating value varies by location and by system, the conversion your LDC actually bills on is the one that matters, and a contract should state which unit it prices in.

• One therm equals 100,000 Btu of heat.
• Ccf is 100 cubic feet; Mcf is 1,000 cubic feet.
• At EIA's roughly 1,037 Btu per cubic foot, one Mcf is about 10.37 therms.
• Convert both quotes to the unit your bill uses before comparing them.

How supply, distribution, and transportation charges appear

A typical Texas commercial natural gas bill separates the commodity cost from delivery and transportation fees. The supply charge covers the actual natural gas purchased (either from your chosen retail supplier or the LDC's default service). Distribution charges recover the LDC's cost to operate pipelines and deliver gas to your meter. Transportation charges may apply if you use third-party pipeline capacity to bring gas to the city gate.

• Supply/commodity charge: cost of the natural gas itself, competitive if you choose a supplier
• Delivery/distribution charge: regulated LDC fee for moving gas through local pipes
• Transportation charge: fee for upstream pipeline capacity when applicable
• All charges appear as separate line items on your monthly gas bill
• Taxes, riders, and additional fees may be added by the LDC or state

Winter price risk and how commercial gas quotes are built

Texas commercial natural gas prices show strong seasonal patterns with winter months typically carrying higher prices due to increased demand for heating and potential supply constraints. Commercial gas quotes are constructed using a forward-looking approach: suppliers lock in commodity prices through Henry Hub-linked contracts, add basis differentials for local delivery points, and include estimated transportation and storage costs. Your quote reflects the supplier's cost to procure and deliver gas plus their margin.

• Winter months (November-February) typically see higher natural gas demand and prices
• Henry Hub serves as the primary benchmark for Texas gas commodity pricing
• Basis adjustments reflect local market conditions and transportation costs
• Fixed vs indexed contract structures determine your price certainty level
• Your quote includes commodity, transportation, and supplier margin components

How a business actually enrolls

Enrolment runs through the LDC and is a sequence rather than a single decision. Identify the serving utility from the service address and meter. Ask it, in writing, whether transportation service is available for the account's class, and for the tariff, eligibility terms, nomination and balancing rules and any deposit. Get commodity bids from marketers. Execute the supplier agreement and, separately, whatever transportation documents the LDC requires. Arrange nominations — the daily or monthly volumes the supplier will put into the system — and confirm the account has been accepted before the bundled service is released. From then on there are two bills, or one consolidated bill: the supplier for the commodity, the LDC for delivery and balancing. The one step not to skip is the written confirmation from the LDC that the account is enrolled, because until that lands the switch has not happened.

• Identify the serving LDC from the service address and meter.
• Ask the LDC, in writing, whether transportation service is available, and for its terms.
• Execute both the supplier agreement and the LDC's transportation documents.
• Obtain written confirmation of enrolment before releasing bundled service.

Eligibility, and what a gas inquiry does not do

Competitive natural gas supply in Texas depends on the service address, the utility serving it, the rate schedule and the annual usage, and a municipal system may offer no third-party choice at all. Confirm with the LDC whether the account qualifies for transportation service and what enrolment requires before soliciting any supply. HighGround may receive compensation from providers on completed purchases. Submitting an inquiry places no order, switches no supplier and commits you to nothing — it starts a conversation about what your options actually are.

• Choice depends on the address, the serving utility, the rate schedule and the usage.
• Some municipal systems offer no third-party choice at all.
• Verify eligibility with the LDC before soliciting supply.
• An inquiry places no order and switches no supplier.

What each line of a commercial gas quote is priced from

A gas quote is not one number. The commodity portion reflects the forward price of the gas itself for the months being supplied. The capacity and transportation portion reflects what it costs to reserve the ability to move that gas to your city gate, which is why a quote can differ between two sites with identical usage in different locations. The distribution portion is the local utility's, set by tariff and identical no matter who supplies you. Where the market allows choice, the supplier is quoting on the parts it controls. So when two Texas quotes differ, the useful question is which line differs: a lower commodity number with a separate transportation charge is not obviously cheaper than one bundled figure, and a quote that omits the transportation treatment entirely has not answered the question you need answered.

• Commodity reflects the forward price for the months supplied.
• Capacity and transportation reflect the cost of moving gas to the city gate — location-specific.
• Distribution is the local utility's tariff and does not change with the supplier.
• Ask whether transportation is bundled into the price or billed alongside it.

Sizing your own winter exposure

Winter risk can be measured before it is hedged. Pull twelve months of therms and separate the months where heating drives consumption from the months where it does not. The winter share of annual volume is the portion of the gas bill that a price spike actually reaches; the summer months barely respond. That share, multiplied by the price difference between a fixed and an indexed product, gives the range the decision is worth — in the business's own numbers rather than a rule of thumb. It also shows why two similar businesses can reach opposite conclusions: an operation whose consumption is flat across the year is buying protection it will rarely need, while one whose year is concentrated in the cold months is exposed on most of its volume.

• Twelve months of therms, split into heating months and the rest.
• Winter share of volume is the part a spike reaches.
• Multiply that volume by the fixed-versus-indexed price difference to size the decision.
• Flat-load operations and heating-heavy operations should not choose the same product.

Renewing a Texas gas contract on the same discipline as electricity

Texas gas contracts renew or expire on their own clock, and the two fuels almost never share a date. That misalignment is the operational problem for a multi-site operator: an electricity renewal can be run as a deliberate comparison while a gas agreement quietly lapses into whatever the supplier's terms provide for, and the lapse is invisible because the invoice still arrives. The fix is administrative before it is commercial. Build one calendar holding every site's electricity and gas end dates with the notice deadlines the agreements actually state, work the closest 120 days first, and keep the gas review on the same normalisation discipline as the electricity one: same annual volume, same winter-sensitivity assumption, same term length. Gas adds one variable electricity does not have, which is that a quoted volume has to be reconciled against degree-day behaviour rather than a production schedule, so the previous two winters are more useful than the previous twelve months alone.

• Electricity and gas end dates rarely coincide — one calendar, both fuels, every notice deadline.
• Work the nearest 120 days first; a lapsed gas agreement is silent on the invoice.
• Compare gas quotes on the same annual volume, winter assumption and term length.
• Use two winters of consumption, not one, because gas tracks weather rather than production.

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