Therm Rate vs Monthly Fee: When Is the Cheaper Rate Worth It?

The break-even formula

Annual break-even therms = 12 × (higher monthly fee − lower monthly fee) ÷ (higher therm rate − lower therm rate).

Use dollars per therm, not cents, in the formula. This applies when the lower-rate plan has the higher fee. Below the break-even usage, the lower-fee plan costs less; above it, the lower-rate plan costs less.

Worked example: 59.9¢ versus 62.9¢

These are illustrative plans, not current marketer offers. Plan A costs $0.599/therm plus $9.95/month. Plan B costs $0.629/therm plus $6.95/month. Assume both rates apply for 12 months, with no credits or discounts.

12 × ($9.95 − $6.95) ÷ ($0.629 − $0.599) = 1,200 therms/year.

Credits and required billing options change the answer

Annual marketer cost = annual therms × rate + 12 × monthly fee − eligible annual credits. Use the highest fee in an advertised range, then deduct only verified discounts you qualify for and will keep enabled. One-time credits apply once; do not repeat them every year.

With credits, break-even therms = [12 × (fee A − fee B) − (credit A − credit B)] ÷ (rate B − rate A), where A is the lower-rate plan. A negative result means A already costs less at zero usage under those assumptions. Equal rates require comparing fees and credits directly.

For example, a verified $2/month discount reduces Plan A’s fee to $7.95 and its break-even point to 400 therms/year. Without enrollment in the required billing options, the original 1,200-therm threshold applies.

Use the reviewed offers, not the example prices

These current-data examples use our shared calculator. The plan selected can change with usage. The initial monthly figure annualizes the initial rate; it does not mean a six-month offer lasts a full year. The five-year scenario uses the initial term followed by a current published same-term snapshot.

What these costs include

Average initial monthly cost = annual therms ÷ 12 × initial rate + highest monthly fee − eligible year-one credits ÷ 12. It is an annualized comparison, not your winter bill or a promised bill amount.

These examples include web offers and Gas South’s eligible $50 SAVE50 credit once in year one for terms of 12 months or longer. SCANA fees include $1/month for paperless billing with a supported recurring payment method and $1/month for automatic renewal on fixed plans. You must enroll in and retain those options. GNG Greener Life is not selected in these tables; its optional reward can be compared in the calculator. GNG’s $10/month credit is an alternative to the FEATURED therm discount and is not added to it.

† GNG FEATURED uses the published 12-month fee maximum of $8.99/month as an assumption. The promotional enrollment details do not specify a numeric fee; confirm your actual fee with GNG. Other fee ranges use their highest value before verified billing discounts.

Five-year cost uses the offer for its initial term, then today’s published same-plan, same-term rate and fee for the remaining months. Constellation’s new-customer regional offer uses the standard same-term plan after the initial term. Future renewal prices and discount availability are unknown. This is a scenario, not a forecast or guaranteed renewal quote.

AGL delivery charges, taxes, connection charges, late fees and early termination costs are excluded. Usage is held constant. The lowest initial offer is selected per marketer, even if another offer would have a lower five-year total.