Your Natural Gas Bill, Explained

US households paid an average of $15.34 per thousand cubic feet of natural gas in 2025, while the Henry Hub benchmark averaged $3.52 per million Btu, about $3.65 per thousand cubic feet. The commodity was under a quarter of the bill. The rest pays for interstate pipelines, the local utility's distribution network, fixed customer charges and riders, all of which move slowly, and the gas cost itself reaches bills months after the market moves.

That gap is why a falling headline price and a rising bill can coexist, and it is the question readers most often bring to the Henry Hub price page. This guide follows a unit of gas from the wholesale market to the statement, using the Energy Information Administration's price series at each stop, then builds an illustrative bill to show how the pieces add up in January and in July. The figures are national averages; local utilities differ widely, and the method here is meant to help read any bill, not to predict one.

Four prices for the same gas

The EIA publishes a ladder of natural gas prices, each measured at a different point in the chain. Lined up for the last six years, with Henry Hub converted from dollars per million Btu to dollars per thousand cubic feet using the EIA's estimate of 1,036 Btu per cubic foot:

Sources: EIA Natural Gas Prices, annual (release September 30, 2026); EIA Henry Hub natural gas spot price, annual (release October 21, 2026). Conversion and the two right-hand columns are PetroEyes calculations.

Henry Hub is the spot price at a pipeline hub on the Louisiana Gulf coast that the EIA glossary describes as the delivery point for the NYMEX natural gas futures contract. It is the price in the news. Citygateis the price a local distribution company pays for gas delivered to its system, so it includes interstate pipeline transportation and the utility's own purchasing, including any hedges and storage withdrawals. Residential is the average price households pay, all charges included, divided by the gas they used. The two calculated columns are where the bill is decided.

Read the last column first. In 2025 the citygate cost was 31.6 percent of the residential price; in 2021 and 2022, when wholesale prices spiked, it reached 46.6 to 49.4 percent. The commodity share of a household bill is not fixed: it rises when gas is expensive and shrinks when gas is cheap, because the other parts of the bill do not move with the market. Then read the column beside it. The amount households pay above the citygate cost was $7.35 per thousand cubic feet in 2020 and $10.49 in 2025, an increase of about 43 percent in five years. That margin covers distribution, customer charges, riders and taxes, and its steady climb, through years when wholesale prices went both up and down, is the part of the bill that headline gas prices never show.

The 2023 lesson: a 61 percent price drop that bills did not see

If a single year shows how loosely a household bill is tied to Henry Hub, it is 2023. The annual Henry Hub average fell from $6.45 per million Btu in 2022 to $2.53, a decline of about 61 percent. The citygate price fell only 19 percent, from $6.87 to $5.56 per thousand cubic feet. And the average residential price rose, from $14.75 to $15.40, an increase of about 4 percent.

The EIA explained the mechanism in a Today in Energy note that year: changes in retail natural gas prices lag changes in wholesale prices, largely because of how utilities are regulated. Local distribution companies often buy gas months before customers need it, to limit their exposure to short-term swings and to make sure supply is there, so the gas cost they pass on can reflect prices from earlier periods. They also hold pipeline capacity and storage for the same reason. When prices spike, as they did in 2022 and in the Midwest during Winter Storm Uri in February 2021, utilities often ask regulators to spread the recovery of those costs over several years. A household in 2023 could therefore still be paying for gas bought, or costs incurred, in 2021 and 2022.

The EIA also noted that over longer periods, wholesale and retail prices are more closely correlated. The relationship is real; it is just slow and partial. A reader who sees Henry Hub fall by half should expect the gas cost portion of a bill to fall later and by less, and the rest of the bill not to fall at all.

What each line on the statement pays for

Utilities name their charges differently, but the structure is similar across states. Kentucky's Public Service Commission describes three basic parts: a monthly customer charge, a gas cost charge, and a delivery charge, adding that a utility may use different terms. Most bills add a fourth group, riders and taxes.

Only the gas cost line follows the wholesale market. The Kentucky commission says it is the only portion that changes when wholesale prices rise, that utilities pass those changes through in both directions, and that they do not make a profit from an increase. It estimates the gas cost at generally two thirds of a bill. That figure is the commission's general description for Kentucky, and the national EIA averages in the first table suggest a lower share in most recent years: with citygate gas at 29 to 36 percent of the average residential price in 2023 through 2025, the commodity part of a typical US bill was closer to a third. The share depends on the state, the utility, the season and the year, and it is worth computing from your own bill rather than assuming.

The delivery and customer charges are where utility investment shows up. A utility earns its return on the pipes, meters and service lines it owns, not on the gas, so spending on the network flows into those lines after a rate case. That is consistent with the steady rise in the residential-minus-citygate margin in the EIA data, though national averages cannot say how much of the increase comes from any one cause.

Units: therms, Ccf, Mcf and MMBtu without the confusion

Gas bills mix volume and energy units, and wholesale prices use a third. The EIA estimates that a cubic foot of natural gas delivered to US consumers in 2026 contains about 1,036 Btu. A therm is defined as 100,000 Btu. From those two numbers every conversion on a bill follows:

Two shortcuts are worth keeping. A Henry Hub price in dollars per MMBtu divided by ten is the commodity price per therm: $3.52 per MMBtu is about 35 cents a therm. And an EIA price in dollars per Mcf divided by 10.36 is the price per therm: the 2025 average residential price of $15.34 per Mcf works out to about $1.48 a therm, all charges included. A bill printed in Ccf needs the utility's own heat content factor, usually shown on the bill and close to, but not always equal to, the national 1.036.

Why July gas costs more per unit than January gas

The most counterintuitive line in the EIA data is the monthly residential price. In 2026 it climbed every month from winter into summer, while the citygate cost of the gas itself went sideways:

The explanation is volume. EIA residential consumption data show US homes using 1,036,216 million cubic feet in January 2025 and 110,844 million in July 2025, about 9.3 times less. A customer charge that is the same every month is a small fraction of a January bill and a large fraction of a July one. The EIA's own explanation is exactly this: fixed costs are spread over smaller volumes in warm weather, so residential prices are usually highest in summer and lowest in winter on a per-unit basis.

The practical point: a high per-unit price on a summer bill is not a sign of overcharging and says little about the gas market. The dollar total is what matters for a budget, and the summer total is small. Comparing your own per-therm cost between seasons, or against a neighbour's, is only meaningful at similar usage.

An illustrative bill, built line by line

To show how the parts combine, here is a bill for a hypothetical utility. The rates are assumptions chosen to be round and plausible, not any company's tariff: a customer charge of $15.00 a month, delivery of $0.50 per therm, and a gas supply rate of $0.55 per therm. The household uses 150 therms in January and 15 in July, roughly the ten-to-one seasonal swing seen in the national data. Riders and taxes are left out to keep the arithmetic visible.

With identical rates, the July effective price, $2.05 a therm, is 78 percent above January's $1.15. Gas supply is 48 percent of the January bill and 27 percent of the July bill. A supply rate of 55 cents a therm corresponds to $5.50 per MMBtu, which sits between the 2025 Henry Hub average of $3.52 and the citygate prices in the first table; it was chosen to reflect a utility paying for pipeline delivery and storage on top of the hub price.

Now move the market. Suppose Henry Hub rises by $1.00 per MMBtu and the utility's gas cost eventually rises by the same amount, which is 10 cents a therm. The January bill rises by $15.00, from $172.50 to $187.50, or 8.7 percent. The July bill rises by $1.50, or 4.9 percent. Over a heating season, the EIA's Winter Fuels Outlook puts the average gas-heated household at about 48 thousand cubic feet from November through March, roughly 497 therms; a full 10 cent pass-through would add about $50 to that season's cost. In practice the pass-through is partial and delayed, for the hedging and regulatory reasons covered above, so $50 is an upper bound for a sustained $1 move rather than a forecast.

This winter, by region

The EIA's Winter Fuels Outlook, published with the October 6, 2026 Short-Term Energy Outlook, expects households that heat mainly with natural gas, 46 percent of US households in the Census Bureau's 2024 American Community Survey, to spend an average of $640 from November through March, down 9 percent from last winter. The expected average price is $13.44 per thousand cubic feet, also down 9 percent, and consumption is about unchanged. The national figures hide a wide regional spread:

Two things stand out. The Midwest has the lowest expected price, $10.38, and the Northeast the highest, $16.12, a gap of more than 50 percent for the same molecule, which is the delivery side of the bill made visible at regional scale. And the West's spending rises 7 percent even as its price falls 8 percent, because the EIA's weather assumption calls for a colder winter there, lifting expected use by 17 percent. Weather moves winter bills more than price does in most years; that is why the EIA describes these figures as a broad guide for comparing one winter with the last, not a bill estimate. The storage cushion behind the lower price outlook is tracked weekly in the EIA natural gas storage report.

How gas compares with the other heating fuels this winter

In the same October 6 outlook, the EIA's expected winter spending for the other main heating fuels is $1,246 for propane, $1,196 for electricity and $2,115 for heating oil. Natural gas, at $640, is the cheapest of the four on average. The comparison is not a choice most households can act on in a season, since switching fuels means new equipment, and the averages compare different housing stocks and climates. The delivered-fuel markets behind two of those numbers are explained in the propane price guide and the heating oil price guide; both fuels are bought by the gallon from a dealer, with no regulated delivery charge, which makes their bills track wholesale prices far more directly than a gas bill does.

Reading your own bill: a five-step check

1. Find the billing unit and the heat factor. If usage is in Ccf, look for the therm multiplier. Convert everything to therms before comparing.
2. Separate fixed from variable. Write down the customer charge and any fixed riders. Divide the rest by therms used.
3. Isolate the gas cost rate. The PGA, GCA or supply rate per therm is the only line that follows the market. Multiply it by ten to compare it with a Henry Hub price per MMBtu.
4. Compare like months. A January bill against last January, not against July. Usage changes from weather are usually bigger than rate changes.
5. Check for recovery riders. Charges for past events, such as storm cost recovery or prior-period gas cost true-ups, can keep a bill high after the market has fallen.

Where the simple story fails

Hedged utilities lag even more. A utility that locks in a large share of its winter supply in summer will pass through a price spike slowly and a price crash slowly too. A customer of a heavily hedged utility may see little benefit from a sharp spot price decline for a full season.

Regional basis can swamp Henry Hub. The citygate price reflects the price at the hub nearest the utility plus pipeline costs, not Henry Hub itself. In a regional supply squeeze, local prices can rise far above the benchmark, as the Midwest saw during Winter Storm Uri, and those costs then flow through the PGA, sometimes over years.

Annual averages mix seasons. The national residential price is weighted toward winter months, when most gas is used. A household with unusual usage, such as a gas pool heater in summer or a well-insulated home with low winter use, faces a different effective price than the average.

Choice programs change only one line. Where states allow customers to buy gas from a third-party supplier, the supplier's price replaces the utility's gas cost line. Delivery and customer charges stay the same, so the room for savings is limited to the commodity share.

Common misreadings

• "Gas prices fell, so my bill is wrong." The 2023 data show residential prices rising while Henry Hub fell 61 percent. A lag is the normal state of affairs.
• "The utility profits when gas is expensive." Not on the commodity. Commissions require pass-through at cost; a utility's earnings come from its network investment.
• Comparing Henry Hub per MMBtu with a bill per Mcf or Ccf. Convert first: per MMBtu divided by ten is per therm.
• Treating the summer per-unit price as a rate increase. It is fixed charges divided by low usage.

Reader questions on natural gas bills

For the wholesale side of the same chain, the natural gas section of the PetroEyes deep-dive library pairs this guide with the weekly storage report explainer, and the Henry Hub price page tracks the benchmark itself.

For the next step, the storage report guide shows how to judge, week by week through the winter, whether the inventory cushion behind this year's lower EIA price outlook is holding up.

Data and sources (checked October 22, 2026): EIA Natural Gas Prices, annual and monthly (release September 30, 2026); EIA Henry Hub natural gas spot price, annual (release October 21, 2026); EIA US residential natural gas consumption, monthly; EIA energy conversion calculators (1,036 Btu per cubic foot, 2026 estimate; therm = 100,000 Btu); EIA glossary, Henry Hub; EIA Today in Energy, Changes in U.S. residential natural gas prices lag spot prices (September 19, 2023); EIA Winter Fuels Outlook 2026-27 (October 6, 2026); Kentucky Public Service Commission, Natural Gas Price Guide. Unit conversions, shares, differences and the illustrative bill are PetroEyes calculations; the bill uses assumed rates, not any utility's tariff.