Compare Gas & Electricity Plans by Total Cost

This guide shows you how to compare gas and electricity plans by their total annual cost, not just the per-kWh price. You’ll learn to gather your usage, read the plan documents, and calculate the real yearly figure that includes supply charges, demand fees, and discounts. Start by collecting your recent energy bills and knowing your annual usage in kWh for both gas and electricity.

What You’ll Need

• Your last 12 months of electricity and gas bills (or at least one full year of usage history)
• Your current plan’s rate sheet or contract (to compare against new offers)
• A calculator or spreadsheet
• Access to your energy provider’s online portal or a comparison website (optional)

Step-by-Step

1. Find your annual usage. Look at your bills for the past 12 months. Add up the total kWh of electricity and the total therms or cubic feet of gas. If you only have a few months, estimate by multiplying the average monthly usage by 12. Your usage is the single biggest factor in cost, so be as accurate as possible.
2. List every plan you’re considering. Include your current plan as a baseline. For each plan, write down the following from the official rate sheet or terms: the per-kWh energy charge (electricity), the per-therm charge (gas), the monthly base or supply charge, and any demand charges (for electricity) that apply to your usage pattern.
3. Convert all units to match your usage. Gas may be billed in therms, CCF, or MCF. If your usage is in one unit and the plan prices in another, convert: 1 therm = 100,000 BTU, 1 CCF = 1.037 therms, 1 MCF = 10.37 therms. For electricity, ensure both usage and price are in kWh.
4. Calculate the energy charge for each plan. Multiply your annual kWh by the per-kWh rate. Do the same for gas: annual therms × per-therm rate. Write these down as the variable costs.
5. Add the fixed charges. Multiply the monthly base charge by 12 and add it to the variable cost. If there is a demand charge (a fee based on your highest 15-minute usage in a month), estimate it from your bills or use the plan’s typical estimate. Add that to the annual total.
6. Subtract any discounts or credits. If the plan offers a discount for autopay, paperless billing, or on-time payment, subtract that from the annual total. Some plans give a per-kWh credit for usage above a threshold—apply that only if your usage qualifies.
7. Repeat for every plan. Do the same calculation for each plan you’re comparing. Keep a table with columns: Plan name, Energy charge, Fixed charge, Demand charge, Discounts, Total annual cost.
8. Compare the totals. The plan with the lowest annual total is the cheapest for your usage. But also check the contract length, early termination fees, and whether the rates are fixed or variable. A low introductory rate that jumps after 6 months may cost more in year two.
9. Factor in renewable or green options. If a plan is labeled green, it may have a higher rate but offset your carbon footprint. Decide if that’s worth the extra cost to you.

Common Mistakes

• Comparing only the per-kWh price. A plan with a lower energy charge but a high monthly base fee can be more expensive for low-usage homes. Always calculate the total.
• Using monthly usage instead of annual. Energy use varies by season. Using a single month (like a summer month with AC) can skew the comparison. Use 12 months.
• Ignoring therms vs. CCF. Gas units are not interchangeable. 1 CCF is about 1.037 therms, so a 5% difference in price can be hidden if you mix units.
• Forgetting about demand charges. Some electricity plans have a demand charge that only applies if you use a lot at once. If you don’t know your peak demand, you might underestimate the cost.
• Skipping the fine print on discounts. A discount for autopay might require a bank account, and on-time payment discounts can be lost if you pay a day late. Those are not guaranteed savings.

Tips

• Use a spreadsheet. Set up columns for each cost component and use formulas. This makes it easy to test different usage levels or rates.
• Check your actual usage pattern. If you use more electricity at night, a time-of-use plan might be cheaper. Look at your hourly usage data if available.
• Look for plans with no termination fee. That gives you flexibility to switch if a better deal appears.
• Read the energy facts label. In many regions, suppliers provide a standardized label that lists the price per kWh, the monthly fee, and the contract terms. It’s a quick way to compare apples to apples.
• Re-check your math. A simple arithmetic error can make the wrong plan look cheaper. Double-check your multiplication and addition.

Troubleshooting

• If you don’t have 12 months of bills: Use the average from the months you have, but note that it may be inaccurate. Some providers offer a usage history report online. If not, estimate using your home size and typical usage for your area.
• If two plans have different billing structures (e.g., tiered vs. flat rate): For tiered rates, calculate the cost for each tier based on your usage. For example, if the first 500 kWh are at one rate and the rest at another, compute the cost for each portion separately.
• If the plan’s rate sheet is confusing: Call the provider and ask for a sample bill for your usage. They can often provide an estimate. Or use a comparison website that does the math for you, but always verify with the official rate sheet.
• If your usage changes significantly year to year: Use the most recent 12 months, but if you’ve added solar panels, an EV, or a new appliance, adjust your estimate accordingly. The comparison is only as good as your usage forecast.
• If a plan has a variable rate: You can’t know the future cost. Use the current rate for comparison, but understand that it may change. Fixed-rate plans offer price certainty.

Frequently Asked Questions

What is the difference between a supply charge and a delivery charge?

The supply charge (or energy charge) is the cost of the actual electricity or gas commodity. The delivery charge is what the utility charges to maintain the wires and pipes. When comparing plans, you only compare the supply charges, because the delivery charge is usually fixed by your utility and is the same regardless of which supplier you choose.

Should I compare plans based on monthly or annual cost?

Always compare annual cost, because monthly bills vary with seasons. A plan that looks cheap in spring might be expensive in winter if you use more gas for heating. Annual total smooths out those peaks.

What is a demand charge and how do I estimate it?

A demand charge is a fee based on your highest rate of electricity use during a billing period, typically measured in 15-minute intervals. To estimate it, look at your bill for the ‘peak demand’ in kW. Multiply that by the plan’s demand rate (e.g., $10 per kW) and by 12 months.

Can I switch plans if I’m under contract?

Usually yes, but you may have to pay an early termination fee. Read your contract’s terms. If you’re out of contract, you can switch without penalty. Some providers allow switching between their own plans without a fee.

How do I know if a green energy plan is worth it?

Green plans often cost slightly more per kWh, but they support renewable energy generation. Compare the annual total of a green plan to a standard plan. If the difference is small (e.g., under $50 a year), many people consider it worth it for the environmental benefit.

What if I have solar panels? How does that affect the comparison?

If you have solar, your net usage (what you draw from the grid) is what matters. Use your net annual kWh from your utility bill. Also, some plans offer special solar buyback rates for the excess energy you send back. Include those credits in your calculation.

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