Deregulated Natural Gas - Beware of the Fixed Fees

I live in Atlanta, where natural gas has been deregulated. The idea is that competition would keep prices in check and would be good for the consumer. Only one problem...There is only one way to get the gas to your home. Through the pipeline run by Atlanta Gas Light.

This past summer, I signed up for service with Gas South and locked in at a great rate of $0.75 per therm. There is a $5.95 monthly customer service fee, which is pretty standard from provider to provider. But the kicker is the Atlanta Gas Light "pass though charges" to cover the cost of the maintaining the pipeline, paying for storage of the natural gas, etc. They base this charge on your DDDC (Dedicated Design Day Capacity) which is calculated by your estimated usage of natural gas on the coldest day of the year. The more you use, the more your fixed charges will be over the next year. Since my home was new construction, they didn't have usage to base it on and therefore based on size of the house, despite the fact that most of my heating is electric.

Here is a break down of my bill last month:

Gas Charges $17.60 (23.5 therms x $0.75)
Taxes $4.82
Customer Service Fee $5.95
Atlanta Gas Light (AGL) Pass Through Charges $45.14
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Total: $73.51

Over $51 of the $73 last month (about 2/3) were fixed charges. Now I feel confident that the DDDC will drop when they reassess (every September), but I wouldn't be surprised if the fixed fees during the Winter still end up being about as much for me as the actual gas usage.

With the advances in all electric appliances such as high efficiency heat pump HVAC, heat pump water heaters, and induction cooktops, it really makes you wonder if it is worth considering going "all electric" when building a new house in the South.

For more information on Atlanta Gas Light and DDDC, follow the link below:

AGL Charges Explained