Pennsylvania Gas Switch


Your Guide to the PA Gas Switch

Utility costs are a major part of most homeowners’ and businesses' monthly budgets, and they can vary widely depending on the season. Any additional measure of predictability you can gain over these expenses is a good thing for your wallet and your peace of mind. That’s why the Pennsylvania Public Utility Commission launched the PA Gas Switch website.

With the deregulation of the state’s residential energy markets, many homeowners and business owners are still in the dark about what choosing a natural gas supplier means and how it can potentially save them money. The PA Gas Switch website provides a transparent, unbiased explanation of how your utility bills work and what the benefits are of shopping around for natural gas supplier.

How We Get Natural Gas to Your Home

Natural gas is a clean-burning fossil fuel that exists in pockets below the surface of the earth and under the ocean floor. It primarily consists of methane along with one carbon atom and four hydrogen atoms. Additionally, traces of nonhydrocarbon gases and hydrocarbon liquids are found in natural gas. Energy companies drill for this high-yielding energy source in natural gas fields, but methane gas is also commonly found in oil wells.

When natural gas is first drilled, it’s not clean enough to transport through the pipelines, so it must be filtered and processed to meet exacting standards prior to transportation. During this process, the gas companies also add that distinctive “rotten egg” odor as a safety measure. Gas leaks can be dangerous, and because natural gas is otherwise odorless, the pungent smell is added to tip off workers and consumers of any latent danger.

Once it meets acceptable standards, the gas can enter a vast network of pipelines, often referred to as “the grid,” and be carried to the different states. The pipeline branches off in hundreds of spots to deliver natural gas to different communities, and then it branches off again to bring it to specific homes.

Different companies are responsible for producing the natural gas, refining the gas, maintaining the pipeline and delivering it to Pennsylvania homes. In this respect, you can think of utilities as “retailers” of a sort, in that they sell the end product to the consumers.

What is Natural Gas Deregulation?

In 1999, the commonwealth of Pennsylvania deregulated the natural gas industry by passing the Natural Gas Choice and Competition Act (NGCCA). The aim of the bill was to allow Pennsylvania natural gas consumers greater freedom in choosing which natural gas supplier they can purchase their gas from. Under the act, homeowners now have a choice in who their utility company buys its gas from. While utility companies — such as Columbia and UGI — are responsible for delivering gas to your home, maintaining the grid and sending your bill, they don’t actually produce gas themselves. Instead, they buy it on the open market and are legally prohibited from charging you anything other than the going market rate.

Prior to the passage of the bill, utility companies would purchase natural gas from a supplier or suppliers and determine the rates for the end users: Pennsylvania homeowners and businesses. Since the passage of the NGCCA, natural gas users in Pennsylvania have greater flexibility to choose between more competitive rates from multiple natural gas suppliers offering many different pricing packages. This consumer-friendly initiative became known as the “PA Natural Gas Switch.”

pa-gas-switch

When you specify which company your utility provider buys gas from, you can take advantage of fixed rate and other pricing plans that can potentially save you money on a month-to-month basis.

Natural Gas Suppliers vs. Distributors

Many people think natural gas suppliers and distributors are the same thing, but they are two separate entities. Understanding the difference between them is critical before you make a PA gas choice.

Natural gas distributors are gas utilities that own the infrastructure, allowing gas delivery to businesses and homes. They're essentially the middle man between you and your gas supply. Distributors bill you for your gas usage and read your meter to measure how much you have used. But in a deregulated commonwealth or state, your distributor does not have to double as your supplier.

A gas supplier sources and delivers the gas to your home or business. Your supplier purchases contracts at wholesale, then sells the gas to residential and commercial retail customers. The distributor must receive a license from the state or commonwealth to sell gas. You can obtain a list of certified suppliers from the public utility.

Still not certain what the difference is between suppliers and distributors? Think of it this way:

  • Suppliers buy the gas and provide it directly to the customers: They handle their own marketing and find their own customers. They use the infrastructure put in place by the gas utilities to get enough gas to residences and commercial locations.
  • Distributors take care of the delivery: If a home or business has a problem with their natural gas pipes, for instance, the distributor would be the one to take care of it. The distributor continues to send bills to the customer whether they receive their gas directly from the distributor or from a supplier. You will see the supplier's name on the bill from the distributor.

How Does the PA Gas Switch Work?

According to the Pennsylvania Public Utility Commission (PUC), there are currently fifteen natural gas distribution companies that service PA, including Columbia Gas, PECO Energy and UGI Utilities. These are the natural gas companies you see on your natural gas bill and who you make your monthly payments to. However, these companies do not drill or refine the natural gas you use. They purchase it from dozens of companies like Shipley Energy.

puc-gas-stats

As a natural gas consumer in Pennsylvania, your bill is broken down into delivery charges and supply charges. The delivery charge portion covers the costs incurred by the natural gas distribution company to bring the fuel to your home via your local pipelines. Among other things, this part of the bill covers the expenses incurred by your utility for delivering gas and maintaining the natural gas distribution pipes. Your utility buys the gas they deliver to you from producers and suppliers, which is covered under the supply charge portion of your bill. This also happens to be the charge that the PA deregulation has allowed you, as a consumer, to control.

This is how gas switching allows you to take advantage of more affordable packages offered by competing natural gas companies. By periodically examining supply companies that deliver to your utility, you can opt for the most affordable option and reduce your gas bill.

Why Gas Suppliers Charge Different Rates

You now understand that the gas drilled by different energy companies is purified and refined in the same manner and then all commingle in the same grid. When your furnace or stove burns the gas, you can’t tell whether it was drilled from the Appalachian Basin or the Cherokee Platform, and it’s impossible for drillers or refiners to stamp a brand name on gas. So, why don’t all gas companies charge the same price for a similar product?

pa-gas-prices

For all intents and purposes, natural gas is a fungible product, which means one unit is essentially the same as another. Most commodities have some degree of fungibility and are traded on market exchanges like the Chicago Mercantile Exchange or the New York Mercantile Exchange. Natural gas is no exception. Natural gas prices are dictated by the law of supply and demand. If a refiner wants to sell their gas at too high of a unit price, there won’t be a demand for it at that level, and buyers will purchase from sellers who are offering their products at market price. The seller will either have to lower its price or wait until increased demand for the product warrants the higher price.

Natural gas prices fluctuate from hour by hour and minute by minute, which is not really a problem for traders who buy and sell gas in standard transaction sizes measured in a monthly contract size of 10,000 MMBtu’s (British thermal units). That kind of market uncertainty, however, is not something that most homeowners relish when they’re consuming gas in much smaller quantities. For instance, the average home uses less than 100 MMBtu’s per year.  Consequently, the companies that supply natural gas to the utilities that provide gas to homes and businesses tend to package their gas into rates that provide greater stability for their customers.

What the NGCCA did for Pennsylvania natural gas consumers is to set the suppliers in direct competition with one another. So, how do the suppliers make themselves more competitive when they’re producing and selling the same product to the utilities? They do this by timing the market, trying to cut costs, and reducing their profit margins so they can offer lower prices to the utilities. They also are able to offer different pricing structures than the utilities.  While most utility prices change on a quarterly basis, a supplier can offer price protection through longer-term products, price caps, or variable prices. 

compare-gas-rates

How Do I Make a Gas Switch?

The first step in making a natural gas switch is to compare rates.  Rates vary from one neighborhood to the next, so you first enter your zip code to see what the they are in your area. Check out Shipley Energy’s price checker below!

To make the switch, you will need to determine if there are competitive offers from natural gas companies in your area of PA. Not everywhere in the commonwealth has PA gas choice or switch options. Availability depends on your location.

As you search for the right gas supplier, think about variables such as:

  • Finding a fixed-rate plan, which locks in your kWh rate for at least a year, or market pricing
  • Whether the plan charges an early cancellation fee

How do you make your PA gas choice official? You will need to provide your new supplier with your address and account information. Within the next few business days your new supplier will contact the utility company on your behalf to set up switchover date.

You may have questions once you have finished making the switch, such as:

  • Will my current gas service stop before the new supplier's service begins? No, you will not see any type of interruption. You won't need any new pipes installed. The delivery method for your gas will remain the same. The only change you will see is the name of the gas company on your bill in PA.
  • How do I find out more about my supplier? Once you have made the switch, your new supplier will send you a packet of information explaining the details of your plan and providing an overview of your new agreement.
  • Will my old supplier contact me once I've signed with the new one? You may hear from your old supplier with a request for a final meter reading for your last bill or to make sure you wanted to make the switch.
  • Can I get out of my new contract if I decide I don't want this new supplier? You have 3 business days after you sign with a new provider to change your mind. If you decide you don't want to move forward, let the supplier know immediately. \
  • How often can I switch providers? Technically, you can change providers as often as you like. However, you may incur early termination charges if you do this. Checking your rates every six months is generally sufficient to ensure you get the best rate for your home or business.

Why Switch to Natural Gas?

Many people switch to natural gas to gain greater control over their utility expenses. As a business or homeowner, you want the most reasonable prices available. When you change to a gas company in PA with pricing you can afford, you can reduce your heating bills and put those savings toward other things, such as greater investment in your company or saving for the home heating season.

Natural gas is cheaper than other forms of heating as well. The many benefits of making a PA gas switch include:

  • Reliability: You don't have to worry about electrical outages impacting your energy supply.
  • Affordability: Businesses and residences want to spend as little as possible to receive a steady heat supply. We keep our costs low so you can put your savings toward other necessities.
  • Safety: The gas industry in PA has an exceptional safety record and uses the system of pipelines already in place to deliver gas to your home or business.
  • Efficiency: Natural gas is extremely efficient, so your dollar goes further when you invest in natural gas.
  • Environmental advantages: As the cleanest fossil fuel, natural gas has a less-complex chemical makeup than coal and oil. It doesn't release the same harmful toxins when it burns.
  • Domestic source of fuel: The vast majority of natural gas used by companies across the nation is produced in the U.S.

Why Gas Suppliers Charge Different Rates

If you have used our pricing tool, you know that not every PA gas company charges the same rate. You may wonder what the difference between all the companies' rates is. A number of factors go into determining those prices, including:

  • How much gas your supplier sells in the region
  • How much gas your supplier buys from the distributor in the area

Gas suppliers purchase energy in the summer, when there's low demand, and then sell it back to consumers during the rest of the year. This can ease pricing during high-demand months. However, pricing can also be influenced by a number of external factors that your supplier cannot control, such as weather events or economic circumstances.

How to Find the Best Natural Gas Suppliers for Your Home or Business

Natural gas is a clean-burning fossil fuel that exists in pockets below the surface of the earth and under the ocean floor. It primarily consists of methane along with one carbon atom and four hydrogen atoms. Additionally, traces of nonhydrocarbon gases and hydrocarbon liquids are found in natural gas. Energy companies drill for this high-yielding energy source in natural gas fields, but methane gas is also commonly found in oil wells.

When natural gas is first drilled, it’s not clean enough to transport through the pipelines, so it must be filtered and processed to meet exacting standards prior to transportation. During this process, the gas companies also add that distinctive “rotten egg” odor as a safety measure. Gas leaks can be dangerous, and because natural gas is otherwise odorless, the pungent smell is added to tip off workers and consumers of any latent danger.

Once it meets acceptable standards, the gas can enter a vast network of pipelines, often referred to as “the grid,” and be carried to the different states. The pipeline branches off in hundreds of spots to deliver natural gas to different communities, and then it branches off again to bring it to specific homes.

Different companies are responsible for producing the natural gas, refining the gas, maintaining the pipeline and delivering it to Pennsylvania homes. In this respect, you can think of utilities as “retailers” of a sort, in that they sell the end product to the consumers.

Check Pricing In Your Area

Check Pricing

You might immediately think that the lowest price you find is the best option, but that’s not always the case. There are many things to consider, which we will discuss in the next section.

Considerations When Making a PA Gas Switch

  1. Estimated Cost Per Month – This is an estimated monthly cost for the supplier portion of the natural gas bill. It is calculated by multiplying the cost per CCF (or cost per therm, depending on your utility) by the expected usage and adding any fixed fees that the supplier charges. Buyers tend to compare these numbers first when trying to choose between gas suppliers, and they may be the first thing you notice for each company — the dollar amounts are posted in much larger bright orange fonts — but choosing the cheapest estimated cost per month can be misleading. For example, a one-month introductory price in the summer can look significantly cheaper, but it would not include winter, when your usage is greater.  The estimated cost per month is also based on average usage, and your personal consumption can significantly affect its impact on your aggregate natural gas bill.
  2. Cost Per CCF/therm – This is the price that the natural gas supplier charges for Natural gas. Like the estimated cost per month, a low number doesn’t always result in a lower natural gas bill if you’re consuming more or your utilities’ distribution rates go up.   It would help offset those, though.   
  3. Price Structure – This figure will either be fixed or variable:
    • Fixed – The price will stay fixed for the length of the contract. It’s important to note that the price you’re paying per CCF/therm remains the same, but your bill can still fluctuate depending on usage.
    • Variable – The price includes all fees, but it can fluctuate routinely and is often based on market variability. 
  4. Cancellation Fee – This is the fee that the supplier charges for early cancellation of the contract. Cancellation fees exist because in order to provide the committed price, suppliers must hedge (purchase) the gas ahead of time for the consumer.  If the customer leaves in the middle of their term, the supplier is stuck with extra gas that they must sell back into the market, which typically occurs at a loss.   If you have an existing contract with a cancellation fee, you’ll need to factor that into your decision to switch natural gas companies before the end of your contract’s term.
  5. Term Length – This refers to the length of your contract with the natural gas supplier. Cancelling your contract may or may not incur a fee.
  6. Introductory Price – Some suppliers offer a discounted price for the first bill or few bills. This is important to know because your bill will more than likely change even when your consumption remains steady.
  7. Monthly Fee – Most suppliers bill you by ccf/therm used, but some add a fixed monthly fee. The monthly fee is often to offset billing and administrative costs.
  8. Renewable Energy – Even though it burns cleanly — with low carbon emissions — it is a fossil fuel, so it’s nonrenewable unless sourced from a landfill.   
  9. Term End Date – Some offers end at the same time for all natural gas consumers under a specific plan. If the offer does end, there will be a date next to the term end date. If it says “no,” the term ends when your contract individual contract expires.

If you know which features you’re looking for, there’s a filter on the PA Gas Switch website to the left of the screen. It includes a range selector, so you can put a cap on your price. By checking a few boxes, you can narrow your search down to a few different energy providers.

PA Gas Switch Checklist

Now that you have a working understanding about what each aspect of the listing means, it’s time to apply this to your natural gas supplier selection:

  1. Make sure your contract with your existing supplier allows you to transfer without paying a cancellation fee.
  2. Compare the Estimated Costs Per Month and the Cost Per CCF/Therm between companies.
  3. Choose your price structure.
  4. Take note of cancellation feeds or additional costs like monthly fees, application fees and connection fees.

Choosing a Natural Gas Supplier

Different suppliers offer different pricing plans that allow you to lock in your rate for a fixed period. Before deciding, look at how much you’re paying now and compare that to the current market rate and the rate being offered by the supplier. You can also visit the PA Gas Switch program website for in-depth information about fixed and variable rates. You’ll also find other important tips on what to look for when you shop for a natural gas supplier.

What Should I Ask a Natural Gas Supplier?

With deregulation, there are many natural gas suppliers vying for homeowners' business. Keep in mind, not all offers are the same – it's a good idea to ask questions about the offer to any supply company you consider doing business with. We suggest the following questions as a great place to start –

  • What is the term length of the offer?
  • Does this offer provide a fixed price or a variable price?
  • Are there any perks to being a customer of your business? Rewards programs? Bonuses?
  • What happens if market pricing drops below the rate I'm contracted to pay?
  • What are the penalties if I leave the contract early?
  • What happens at the end of my term with your business?

Glossary of Terms

Some terms you'll need to understand when shopping for natural gas in PA include:

  • Natural gas distributor: A natural gas distributor, like Columbia Gas or PECO, is the utility company that supplies gas to your home. They are responsible for maintaining the infrastructure and handling all billing for residential customers.
  • Natural Gas supplier: A natural gas supplier is a separate company, like Shipley Energy, that buys natural gas from a generation company and sells it to the distributor. You're not required to select a supplier — if you don't, the utility company will buy your gas on the open market, and you'll pay the market rate — but if you do, you can access pricing plans that potentially save you money.
  • Deregulation: In a deregulated energy market, customers aren't required to work exclusively with a public utility company — they have the option of shopping around and choosing a private supplier. Pennsylvania deregulated its natural gas market in 1999.
  • Market price: The price natural gas can be purchased on the New York Mercantile Exchange. Natural gas shifts according to demand, infrastructure issues, and other factors.
  • Fixed-rate contract: Natural gas market pricing is unpredictable and fluctuates daily. With a fixed-rate plan, you avoid this uncertainty and lock into a price for a specified period.

Understanding Your Bill

When you switch to Shipley Energy, the first thing you'll notice is that your bill looks very similar. You'll still receive an invoice from your natural gas distributor, and that distributor will remain your point of contact for all service issues. The main difference will be a line indicating that you've chosen Shipley Energy as your supplier, and it will break down the rate you're paying as one of our customers.

Remember, choosing Shipley Energy as your natural gas supplier won't affect your admin and delivery fees — only the price of the gas itself will change.

Why Should I Choose Shipley Energy?

Shipley Energy is more than just a natural gas supplier — we're a longstanding business with deep roots in Pennsylvania. When we entered into the state's natural gas market, we knew we had to deliver a level of value that reflects our reputation.

If you're considering making a gas switch, you'll benefit from our longevity, transparency, and flexible pricing plans. Check our current rates and sign up for service online today.

Check Pricing In Your Area

Check Pricing

Shipley Energy’s Natural Gas Rates

If you feel overwhelmed by the natural gas supplier choices or if you’re just confused about all of the options and factors, your utility company may be able to guide you through the process. Utilities are impartial when it comes to helping you select gas suppliers for their customers.  

shipley-natural-gas

Shipley Energy is an authorized PA Gas Switch supplier for customers of Columbia, PECO, BGE and UGI. While deregulation has led to a lot of companies trying to take advantage of this new market, we have been a trusted family business serving local families for more than 90 years. We offer both fixed rate and variable pricing plans, and we can help you choose the best option for your home. Find out more by using our online rate calculator or contacting our team for more information.

Learn more about our other residential services such as:
-Heating Oil
-Propane
-Electricity 

 Contact Us Online