What a gas company does, and why you might have choices

A gas company delivers natural gas to your home or business through underground pipes. In some parts of the country, you can choose which company supplies your gas — in others, one utility has a monopoly and you cannot switch. The difference depends on whether your state has deregulated its energy market. If you live in a deregulated area, you pay one bill that covers both delivery (the pipes and infrastructure) and supply (the actual gas). If you live in a regulated area, you have one choice: the local utility that owns the pipes.

Even in regulated states, understanding how your gas bill works and what your options are for reducing costs can save you money. In deregulated states, switching suppliers can lower your rate, though the savings vary by season and by how much gas you use.

Key Takeaways

  • In deregulated states, you can choose your gas supplier while the local utility still delivers the gas; in regulated states, you have one option.
  • Your gas bill includes both the cost of the gas itself and the cost to deliver it through pipes — only the supply portion changes if you switch.
  • Switching suppliers takes two to four weeks and does not interrupt your service, but you should compare rates and contract terms before you commit.
  • Your local utility's website or your state's Public Utilities Commission can tell you whether you live in a deregulated area and who your options are.

Deregulated versus regulated states: where you have a choice

Deregulation means the state allows multiple gas suppliers to compete for customers in certain areas. Currently, about a dozen states plus Washington, D.C. have deregulated natural gas markets, though not all areas within those states are deregulated. New York, Pennsylvania, Massachusetts, Connecticut, New Jersey, Maryland, Delaware, Illinois, Ohio, and a few others allow customer choice in some or all of their service territories.

To find out whether you can switch, start with your current gas bill — it will list your utility company. Then visit your state's Public Utilities Commission website (search "[your state] PUC" or "[your state] PSC") and look for a section on deregulation or customer choice. Many state PUC websites have a map or a tool that lets you enter your zip code. If your state is regulated, you cannot switch suppliers, and the rest of this article does not explore to you — your focus should be on reducing consumption or negotiating with your single provider.

How your gas bill breaks down, and what changes when you switch

Your monthly gas bill has two main parts: the supply charge (the cost of the gas itself) and the delivery charge (the cost to transport it through pipes to your home). When you switch suppliers in a deregulated state, you change only the supply portion. The local utility still owns the pipes, still reads your meter, and still appears on your bill — but a different company now sells you the gas.

The delivery charge is set by your state's Public Utilities Commission and does not change when you switch. This is why switching does not always save money: if your delivery charge is high, the savings from a lower supply rate may be small. You can see both charges on your current bill, usually listed separately. Compare the supply rate from a new company to your current supply rate, then do the math for your typical monthly usage (also on your bill) to see what you would actually save.

Finding suppliers and comparing rates in your area

Once you confirm you live in a deregulated area, your state's PUC website usually lists all licensed suppliers in your region. You can also search "[your state] gas suppliers" or "[your city] natural gas suppliers." Each supplier posts their rates online, though some require you to enter your zip code or account number to see a quote.

When you compare rates, look at the per-therm or per-MMBtu price (the unit of gas measurement), not just the total bill, because usage varies by season. Also check whether the rate is fixed or variable. A fixed rate stays the same for the contract term (usually 6 to 36 months); a variable rate changes monthly based on market prices. Fixed rates are easier to budget for, but variable rates can be cheaper if gas prices fall. Read the contract terms carefully — some suppliers charge early termination fees if you switch before the contract ends, and others do not.

The switching process and what to expect

Switching suppliers takes two to four weeks from the date you sign up. You will not lose gas service during the switch — the local utility continues to deliver gas the entire time. To start, you contact the new supplier by phone, online, or in person. They will ask for your account number (on your bill), your current supplier's name, and your meter reading. Some suppliers handle the paperwork with your old company; others ask you to notify them separately.

Your old supplier may contact you to ask why you are leaving or to offer a lower rate to keep your business. You are under no obligation to stay. Once the switch is complete, your new supplier's name will appear on your bill, but the local utility's name will still be there too — they are the delivery company. Your first bill from the new supplier may be prorated if the switch happens mid-month.

When switching does not save money, and what to do instead

In some months or years, all suppliers' rates may be higher than you expect, or the difference between suppliers may be too small to matter. This happens when natural gas prices rise across the market — switching does not protect you from that. If rates are uniformly high, you have three options: wait for prices to fall and switch then, lock in a fixed rate with any supplier to stop worrying about month-to-month changes, or focus on reducing consumption instead.

Reducing consumption is often more effective than switching. Lowering your thermostat by a few degrees, insulating your water heater, sealing air leaks around windows and doors, and using a programmable thermostat can cut gas use by 10 to 20 percent. These changes save money regardless of which supplier you use or what rates are. If you rent, talk to your landlord about weatherization improvements — they may be willing to split the cost or cover it entirely if it reduces their utility bills.

Regulated states: your single supplier and how to reduce costs

If you live in a regulated state, you cannot switch suppliers. Your local utility has a monopoly, and your rates are set by your state's Public Utilities Commission based on the utility's costs plus an allowed profit margin. You can still lower your bill by reducing consumption, but you cannot shop for a better rate.

In regulated states, your recourse is to contact your utility directly about budget billing (a fixed monthly payment based on your average annual use), time-of-use rates (lower rates during off-peak hours if you can shift usage), or low-income information programs if you may have access to. You can also file a complaint with your state's PUC if you believe your rates are unreasonably high, though the PUC's role is to may support the utility is fairly compensated, not to make rates cheap. Many utilities also offer rebates or incentives for energy-efficient appliances or home improvements — ask your utility's customer service department what programs are available.

Frequently Asked Questions

Will switching interrupt my gas service?

No. The local utility continues to deliver gas throughout the switch, which takes two to four weeks. You will not experience an outage or loss of heat. The only change is which company bills you for the supply.

Can I switch back to my old supplier if I do not like the new one?

Yes, you can switch to any licensed supplier at any time, as long as you are not locked into a contract with an early termination fee. Check your contract before you switch to see whether you owe a penalty if you leave early.

What if I live in an apartment or rent my home?

If your name is on the gas bill and you pay the utility directly, you can switch suppliers. If your landlord pays the gas bill and includes it in your rent, you cannot switch — only the account holder can make that decision. Ask your landlord whether they would consider switching to save money.

How do I know if a supplier is legitimate?

Check your state's PUC website for a list of licensed suppliers in your area. Legitimate suppliers are registered with the state. Be cautious of door-to-door salespeople or unsolicited calls claiming to represent your utility — scams do happen. When in doubt, call your local utility directly to verify.

What happens to my old supplier when I switch?

Your old supplier stops billing you for gas supply, but the local utility continues to bill you for delivery. The switch is handled between the suppliers and the utility — you do not need to formally cancel with your old company, though you can call to confirm the switch went through.