Deconstructing a Commercial Natural Gas Bill in Illinois
By Illinois Commercial Energy editorial team
Reviewed by JakenEnergy commercial energy team
A commercial natural gas bill in Illinois looks busier than it needs to, but underneath the line items it follows the same logic as an electric bill: part of it is the commodity you can potentially shop, and part of it is the regulated cost of delivering that commodity through the local utility's pipes. Whether you are served by Nicor Gas, Peoples Gas, North Shore Gas, or Ameren Illinois on the gas side, learning to deconstruct the bill into its real components is what lets you tell a shoppable cost from a fixed one. This guide is the gas-side companion to the electric delivery-versus-supply lens.
Supply versus delivery, again
The first cut is the same one that organizes an electric bill. Supply is the gas commodity itself, the molecules that get burned in your boilers, furnaces, ovens, or process equipment. Delivery is the regulated set of charges the utility levies to move that gas through its distribution system, meter it, store it seasonally, and service your account.
Illinois has retail choice for natural gas, which means an eligible commercial account can buy the commodity from a certified alternative gas supplier instead of from the utility. The mechanics mirror electric choice and are covered in how commercial natural gas choice works in Illinois. What does not change when you switch is delivery: the utility still owns the pipes into your building and still charges its regulated delivery rates, exactly as ComEd keeps charging delivery on the electric side. Only the commodity is competitive. For the full picture of gas as an operating cost, see the commercial natural gas overview.
The commodity side: the purchased-gas-cost mechanism
If you buy gas supply from the utility rather than an alternative supplier, the commodity charge is not a fixed rate the utility sets and keeps. It is a periodically adjusted gas cost that passes through what the utility actually paid to procure gas and manage its storage, with no markup on the commodity itself. Regulators allow the utility to recover its gas-acquisition cost, but not to profit on the molecules.
Because wholesale gas prices rise and fall, this pass-through is trued up over time rather than held constant. The practical consequence is that the supply portion of a utility-supplied gas bill can move from period to period even if your usage is steady, particularly across the heating season when demand and prices shift. This is the gas analogue of how a utility's electric default supply reconciles over time, and it is the reason a utility-supplied commodity cost is not a number you can lock into a budget the way a fixed supplier contract price can be. For current values, go to your utility's own tariff and bill; this guide does not quote a per-therm figure because it would be stale the moment the adjustment moved.
If instead you sign a fixed-rate contract with an alternative gas supplier, your commodity price is defined by that contract for its term, and the utility's periodic gas-cost adjustment is not part of your supply charge. As on the electric side, that fixes the supply portion, not the delivery portion or the taxes.
Therms, and why the meter reading is not the bill
Gas bills price energy in therms, a unit of heat content. Your meter, however, measures volume, usually in hundreds of cubic feet (often shown as CCF or Ccf). The utility converts measured volume into therms using a heat-content or BTU factor, so that you are billed for the energy delivered rather than raw volume alone. This conversion is normal and appears on the bill; it is worth understanding because it explains why your therm total is not simply the difference between two meter dials. When you build a usage history for procurement, record therms, since that is the unit suppliers quote against, and keep the volume reading as supporting detail.
The delivery side: distribution, customer, and demand-type charges
Delivery charges recover the cost of the utility's distribution system and your service. Typical components include:
- A customer or fixed monthly charge that recovers metering and account costs independent of how much gas you burn.
- Distribution or delivery charges tied to your usage in therms, recovering the cost of the pipes and the utility's operations.
- Demand-type or capacity-related delivery charges for some larger commercial and industrial accounts, reflecting the peak call your facility can place on the distribution and supply system. This is the gas cousin of an electric demand charge, though the gas version is structured around the utility's own tariff.
These delivery charges stay with the utility no matter who supplies your gas, which is exactly why, as with electricity, you cannot estimate the effect of a supplier switch by applying a commodity-price difference to the whole bill. The switch only touches the commodity.
Riders and taxes
Gas bills also carry riders and taxes. Riders are tariff mechanisms that recover specific, defined costs, for example energy-efficiency program costs or infrastructure and reconciliation adjustments the utility is authorized to collect. Like the delivery charges they accompany, riders generally ride with the utility and are not removed by choosing an alternative supplier. Taxes and local fees, including applicable state and municipal charges, are layered on according to your location and are likewise outside the commodity you shop.
Give material riders and taxes their own columns when you build a bill history, rather than folding them into a blended per-therm number. A rider that trues up over time can make one month look unusually high or low for reasons unrelated to your usage or your commodity price, and isolating it keeps your comparison honest. This is the same discipline described for electric bills in the three-buckets guide and applied in a structured commercial utility bill review.
Firm versus interruptible service
Most commercial accounts take firm service, meaning the utility commits to deliver gas without planned interruption. Larger facilities may qualify for interruptible service, a delivery arrangement in which the customer agrees the utility can curtail or interrupt delivery under defined conditions, typically during peak demand periods, in exchange for different rate treatment. Interruptible service can suit a facility that is able to switch fuels or cut load on short notice, but it carries real operational obligations and curtailment risk that a firm-service customer does not face. It is a delivery-side decision, distinct from the supply-versus-utility commodity choice, and it should be evaluated against how tolerant your operations actually are of an interruption.
Putting the deconstruction to work
Once you can split a gas bill into commodity, delivery, riders, and taxes, three things become possible. You can compute a supply-only effective cost per therm and compare it against an alternative supplier's offer on equal footing, holding delivery constant. You can spot when a spike is driven by the utility's periodic gas-cost adjustment rather than by anything you did. And you can decide whether service type and contract structure fit your operations, using the negotiating guidance in best practices for commercial gas contracts. If your account also buys electricity, run the same separate-supply-from-delivery method on both, and treat the two as parallel procurement decisions.
Sources
This guide explains how a commercial gas bill is built so you can compare commodity offers accurately. It does not promise savings; verify current utility tariffs, gas-cost adjustments, and your own usage before acting.
Frequently Asked Questions
QHow is a commercial natural gas bill split between supply and delivery?
Like an electric bill, a gas bill separates into the commodity (the gas molecules themselves, measured in therms) and delivery (the regulated charges for the utility's pipes, meters, storage, and service). The commodity is potentially shoppable through a certified alternative gas supplier, while delivery stays with the local utility regardless of who supplies the gas.
QWhat is the purchased-gas-cost mechanism on a utility gas bill?
When you buy gas supply from the utility rather than an alternative supplier, the utility charges a periodically adjusted gas cost that passes through what it paid to procure and store gas, with no markup on the commodity. Because wholesale gas prices move, this charge is trued up over time rather than fixed, so the supply portion of a utility-supplied bill can change from period to period.
QWhat is a therm and how does it differ from the volume the meter reads?
A therm is a unit of heat energy, and gas bills price usage in therms. The meter measures volume, typically in hundreds of cubic feet, and the utility converts that volume to therms using a heat-content factor so that billing reflects the energy delivered rather than raw volume alone.
QWhat is interruptible gas service and who is it for?
Interruptible service is a delivery arrangement, generally for larger facilities, where the customer agrees the utility can curtail or interrupt gas delivery under defined conditions in exchange for different rate treatment. It suits facilities that can switch fuels or reduce load on short notice, and it carries obligations that a firm-service customer does not have.