Last Updated on July 20, 2023 by Mary Pressler
Natural Gas Services in Texas
Texas is one of the US states with a deregulated energy sector, which means that consumers can choose their energy providers.
- Electricity choice is available for most homeowners and businesses. Over 90% of the state population lives in regions when they can choose an electricity provider.
- Natural gas options are more limited in Texas. Only consumers who use more than 3,650 thousand cubic feet (MCF) per year can choose a gas provider.
According to the latest Residential Energy Consumption Survey from the US Energy Information Administration (EIA), the average home only uses 56.3 MCF of gas per year. In other words, the minimum gas consumption to be eligible for provider choice in Texas is 65 times higher than the average home consumption.
What Is the Price of Natural Gas in Texas?
The US EIA is constantly gathering energy price data for all states. As of April 2023, residential consumers in Texas were paying an average gas price of $17.62 per MCF. At this tariff, a homeowner using 6.5 MCF per month would pay a gas bill of $115.
Gas companies set their own prices in Texas, but they must be approved by a local authority:
- If you live within the limits of a city, the local government sets the maximum gas price.
- If you don’t live in a city, the Railroad Commision of Texas (RRC) regulates prices.
In general, gas-fired heating systems have a much lower operating cost than electric resistance heaters. As a quick example, assume your home needs 360,000 BTU of daily heating to stay comfortable during the winter months.
- An electric resistance heater must consume around 105.5 kWh to deliver 360,000 BTU of heat. At a tariff of 16 cents/kWh, the cost of this heating input is $16.88.
- An 80% efficient gas furnace consumes 450,000 BTU when delivering 360,000 BTU. This is equivalent to around 0.44 MCF of gas, with an estimated cost of $7.75.
In this simplified example, the gas furnace provides the same output as the resistance heater at a 54% lower energy cost. According to the American Gas Association (AGA), homeowners can save $1,068 per year by using natural gas for heating, cooking and clothes drying.
If you compare a gas furnace with an air-source heat pump, operating costs tend to be similar:
- A heat pump with a Heating Seasonal Performance Factor (HSPF) of 7.5 will use around 48 kWh of electricity when delivering 360,000 BTU.
- At 16 cents/kWh, the energy cost is $7.68.
Many homeowners install a combined heat pump and furnace system to take advantage of both energy sources. With this configuration, you can use the heat pump when gas prices are high, and the furnace when electricity prices are high. Heat pumps can also operate as energy efficient air conditioners during summer.
According to the National Association of Home Builders (NAHB), homes with both electricity and gas have lower construction costs than fully-electric homes, while also having lower utility bills. Their study considered several US cities with different climates, including Houston. In the case of Houston, the NAHB study found that an all-electric home is $4,000 to $11,200 more expensive than a home with both electrical and gas installations.
Texas Natural Gas Providers
For Texan consumers who use less than 3,650 MCF/year, gas providers are determined by geographic location. In other words, you can only switch your provider by moving. There are several gas companies in the state, but four in particular have the largest service areas:
| Natural Gas Company | Main Regions Served in Texas |
| Atmos Energy | Northern Texas: Dallas-Fort Worth, Lubbock, Amarillo, the Permian Basin and Panhandle regions, etc. |
| CenterPoint Energy | Eastern and Southern Texas, including Houston. |
| Texas Gas Service | Central and Western Texas, including Austin and El Paso. |
| CPS Energy | San Antonio |
Atmos Energy and Texas Gas Service only provide natural gas services, while CenterPoint and CPS Energy are also electric companies. Atmos Energy has two business units in Texas, which operate as independent utility companies:
- Mid-Tex Division: Serves the Dallas-Fort Worth area.
- West Texas Division: Serves Lubbock, Amarillo, the Permian Basin and surrounding areas.
If you move between areas with different gas companies, you must contact your current provider to pay any remaining bills. You must also contact the new provider to set up an account.
