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This gas usage figure then is converted from cubic feet to therms, a measure of the heat, or energy content, of the gas. The amount of gas consumed (CCFs used) is multiplied by a BTU (British Thermal Unit) factor--the actual heat value of the gas supplied. The BTU factor may vary from month to month.

The therm usage for the current billing period is used to calculate the three sub-totals of the new charges on the bill: (1) delivery charges (2), the cost of the natural gas supplied to the home (3), and applicable taxes.

(1) Delivery charges make up 15-20 percent of the gas bill (averaged over the year) and reflect the cost to the gas company to operate and distribute gas to the home. These charges include

• a monthly customer charge, a minimum fixed amount that covers the cost of reading the meter, producing a bill, and other administrative services;
• therm usage/distribution charges, which are based on the amount of gas used (in therms) and reflect the cost of delivering gas to the home (labor, gas mains, gas transmission and distribution lines);
• an environmental recovery cost--also based on the amount of gas used--which covers costs for environmental monitoring and possible clean-up of former manufactured gas plants in the company's service territory;
• a franchise cost for Nicor's municipal franchise agreement; and
• an efficiency program charge that pays for costs related to energy efficiency programs.

(2) The natural gas cost accounts for the largest portion of the bill--75 to 80 percent over the course of a year. It is calculated by multiplying the amount of gas used that month (reported in the meter reading section) by the average cost-per-therm that the company pays for its gas supply.

(4) Taxes make up the remaining 5 to 10 percent of the bill and include several state and local tax levies.