A therm is more than just an odd-sounding word used on your utility bill by natural gas companies. A therm is equal to 100,000 BTUs (British Thermal Units). Most importantly, a therm is the measurement natural gas companies use to determine your natural gas usage.
While natural gas is measured in cubic feet (typically CCF, or 100 cubic feet), a therm is the energy equivalent of burning 100 cubic feet of natural gas. The therm factor is used by natural gas companies to convert the volume of gas used into therm.
On your utility bill, you will see your CCF of natural gas used multiplied by the therm factor. The therm factor varies according to the mix of hydrocarbons in the natural gas, and essentially describes the purity of the gas, or the amount of gas that creates energy. Natural gas is a mix of:
A higher-than-average mix of these gases gives you a higher therm factor. On the other hand, if your natural gas has large quantities of carbon dioxide and nitrogen, you’ll have a lower therm factor. Your natural gas company will set your therm factor and set your natural gas rate per therm accordingly.
Natural gas companies charge you per therm, or actual energy used. In some states, such as Indiana, you’ll be charged on a tiered plan, where the first 20 therms are the most expensive, and the rate per therm goes down the more natural gas you use, similar to a “bulk rate.” Because of this, if you want to gauge your family’s natural gas usage, you’ll have to look at the total therms used, and not the bottom line on your bill.