Natural Gas vs. Electricity Cost

Natural Gas vs. Electric Cost Comparison

Is gas or electricity cheaper? Energy suppliers need industry-specific data to identify the best solutions for their unique requirements and keep their consumers informed. As a third party that helps your customers manage their energy use and options, you do too.

When you partner with RateAcuity, we provide essential data insights to keep you and your clients informed. We have the industry data to equip energy management vendors, research companies and other organizations with accurate, accessible information.


How Are Gas and Electric Costs Billed?

Gas and electric usage are billed somewhat differently, making comparisons a bit nuanced. Natural gas is typically billed in therms, while electricity is billed in kilowatt-hours (kWh). As a measure of natural gas use over time, a therm is calculated based on the amount of heat the gas can provide per cubic foot. A kilowatt-hour, meanwhile, is the amount of energy an appliance using 1,000 watts would need per hour.

Prices for both utilities may vary based upon different location and sourcing factors. For electricity, fuel costs, sources for generation, and power plant availability can cause pricing fluctuations. Natural gas prices can change based on location, transportation requirements and sourcing availability.

When calculating gas and electric bills, providers will measure your customers’ usage. They may need to adjust billing depending on these outside factors and the energy resource’s heating power.


What Are the Differences Between Gas and Electricity and Using One or the Other for Business?

If your customers have questions about the best kind of energy for their business, you can highlight three critical considerations:



Gas and electricity vary in efficiency due to how they’re generated and used. Electricity loses a significant percentage of energy during power generation, making it less efficient than its counterpart.

Meanwhile, natural gas is highly efficient because it requires considerably less energy to extract from its source and deliver to a consumer. While electricity is necessary to power specific applications, natural gas is often more efficient overall.



Another critical factor relating to gas and electricity use is the emissions they cause. Electricity emits higher greenhouse gases along with sulfur dioxide, mercury and nitrogen oxide emission.

Natural gas, in contrast, delivers no mercury emissions and decreased greenhouse gas, nitrogen oxide and sulfur dioxide emissions. However, one crucial factor to consider is that electricity tends to be safer for commercial properties.



Overall, natural gas is consistently less expensive than electricity. Because it is more efficient and easier to source, natural gas is the most cost-efficient way to power operations at a facility. It is more cost-effective to acquire and can deliver more therms for a lower price.

While electricity may fit specific applications better, it lacks the powering or heating productivity rates of natural gas. Electric energy cannot deliver an equal power capacity to that of natural gas for the same price.


How Can a Company Find Out How Much They Pay for Utilities?

Your clients can examine a few main items on their bills to identify how much they pay for utilities.

For electricity, consumers should look at these costs:

  • Energy charge
  • Demand charge
  • Interim rate adjustment
  • Environment improvement
  • Fuel cost adjustment
  • Resource adjustment

You can help your customers calculate how much they pay per unit by adding the total number of kWhs and dividing the sum by the total cost.

When looking at their natural gas bills, your clients should add:

  • Delivery charges
  • Cost of gas in therms
  • Interim rate adjustment

They can divide the sum by the total therms to identify the rate per therm.


How Can RateAcuity Provide You With Data to Make Conclusive Decisions About Electric and Gas Rates?

If you’re looking for trusted resources to keep your company and your clients informed, count on RateAcuity for in-depth data insights. With years of experience in the field, we make critical information accessible for your analysis, management and research. Explore our services and contact us with any questions today.

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