"Gas is cheap right now, so my bill should be low." Not really.
Wholesale gas at Henry Hub is genuinely cheap in May 2026, around $3 to $4/MMBtu. That works out to roughly $0.30 to $0.40 per therm of wholesale supply. Your residential bill shows about $1.45 per therm. The other $1.10 is what most articles ignore.
It is the regulated distribution layer: the local utility\'s investment in mains and services, the cast-iron-pipe replacement programmes, the customer-service infrastructure, the flat monthly customer charge, plus state taxes and any climate-policy riders. Together that wedge has grown by roughly 30% since 2020 in states like New York, Massachusetts and California, even though wholesale gas has done nothing similar.
The retail-to-wholesale gas wedge is now wider than at any point since 2000. Three structural reasons drive it. First, gas customer counts are shrinking in electrifying states; the same fixed-cost base is spread over fewer therms. Second, pipeline-replacement obligations (mandated by federal pipeline safety rules) are entering rate cases. Third, climate-policy stacks in NY, MA and CA add named riders that did not exist a decade ago.
Read the next sections as a map of where your per-therm number comes from. A "cheap gas" headline at the wholesale level does not translate to a low bill in 2026.
Mcf, CCF, therm and BTU, in plain terms.
US gas bills use at least four different units. They describe the same energy with different reference points. The conversions are simple once you have seen them.
Therm = 100,000 BTU
The most common US residential gas billing unit. 1 therm = 100,000 British Thermal Units. One BTU is the heat needed to raise one pound of water by one degree Fahrenheit. A therm runs a typical 80,000-BTU residential furnace for about 75 minutes at full output.
CCF ≈ 1.025 therms
CCF stands for "100 cubic feet" of natural gas. Because gas heating value varies slightly by pipeline (it can be 1,000 to 1,050 BTU per cubic foot), the conversion is approximate. Many utilities (e.g. National Grid in NY/MA) bill in CCF and translate to therms on the same line of the statement.
Mcf ≈ 10.37 therms
Mcf is "1,000 cubic feet". EIA publishes residential gas prices in $/Mcf for historical comparability with the wholesale gas industry. Divide the EIA $/Mcf figure by 10.37 to get an approximate $/therm. The $15/Mcf US average for early 2026 is therefore about $1.45/therm.
MMBtu (wholesale) = 10 therms
Wholesale gas at Henry Hub trades in $/MMBtu (one million BTU = ten therms). A $3/MMBtu wholesale price is $0.30/therm of supply, before any distribution charge. The residential US average of $1.45/therm in early 2026 is therefore roughly $0.35 of wholesale plus $1.10 of regulated distribution and fixed costs.
The detail that surprises most readers. The cubic-foot of gas your meter measures is converted to heat-content units (therms or BTU) by your utility using a recent gas heating-value test. If your pipeline gas has slightly more energy per cubic foot than the standard assumption, you pay slightly more per Mcf than your neighbour in another pipeline zone, even at the same headline rate. Look for the "BTU factor" or "heating value" on your bill.
The five most and five least expensive residential gas states.
Residential gas prices for early 2026, in $/Mcf and converted to $/therm at 1 Mcf = 10.37 therms. Source: EIA Natural Gas Monthly, Table 4.
Top 5 most expensive
| State | $/Mcf | $/therm | Why |
|---|---|---|---|
| Hawaii | 53.96 | 5.21 | Synthetic natural gas from naphtha; tiny customer base; isolated grid |
| Florida | 22.10 | 2.13 | Small residential base; LDC fixed costs spread over few therms/customer |
| California | 20.45 | 1.97 | Wildfire-mitigation, climate-credit and pipeline-safety surcharges |
| Massachusetts | 18.78 | 1.81 | New England gas-pipeline constraint; winter premium; LDC fixed-cost rebase |
| Maine | 17.92 | 1.73 | Small distribution networks; winter heating load on few customers |
Bottom 5 least expensive
| State | $/Mcf | $/therm | Why |
|---|---|---|---|
| Wyoming | 8.31 | 0.80 | Major gas-producing state; short distance to wellhead |
| North Dakota | 8.54 | 0.82 | Bakken associated gas; cold winter helps spread LDC fixed costs |
| Montana | 8.72 | 0.84 | In-state production + low population density |
| Louisiana | 9.05 | 0.87 | Henry Hub state; gas-producing; large industrial offtake spreads LDC costs |
| Idaho | 9.31 | 0.90 | Cheap supply from Rocky Mountain basins; large heating customer base |
! Typical 80-therm winter bill at the US average
At the US average of $1.45/therm, an 80-therm winter month is roughly $116 in supply + distribution, plus a $10 to $30 customer charge, landing around $135 to $145 all-in. The same 80 therms in Wyoming costs roughly $64; in California, roughly $158; in Hawaii, roughly $417. Heating load matters most in the middle of the country; New England and California pay the most per therm for the same heat.
Four layers that build the residential gas price.
Your $/therm is the sum of four cost layers. The headline price is just the addition.
A Wholesale gas (Henry Hub)
Spot price at the Louisiana pipeline interconnection. In May 2026 around $3 to $4/MMBtu, which is $0.30 to $0.40/therm at the wholesale level. This is the only layer that moves in days to weeks; the other three move in years.
B Interstate pipeline transport
Cost of moving gas from the producing basin to the city-gate of your state. Northeast states (NY, MA, CT, RI, ME, VT) pay the most because pipeline capacity is constrained and Marcellus expansions face permitting fights. New England in particular pays a structural winter premium that does not exist in Texas or Louisiana.
C Local distribution company (LDC)
The utility that owns the city-gate-to-meter pipes. LDC investment in mains replacement (the federal pipeline-safety push), cast-iron-to-plastic programmes, customer-service infrastructure and shareholder return on rate base are all baked in. This is the layer that grew fastest in 2020 to 2026 in CA, NY, MA and IL.
D Riders, taxes, customer charge
State and local taxes, low-income assistance riders, conservation programmes, climate-policy charges (CA cap-and-trade pass-through, NY CLCPA gas-system riders, MA decarbonisation charges) and the flat monthly customer charge ($10 to $30 in most states). These are layered on top of the per-therm rate; the customer charge in particular hurts low-volume customers most.
The takeaway: layer A (wholesale) moves with gas markets; layers B, C and D move with regulatory and political decisions on a multi-year cadence. Two states paying the same wholesale gas can land $0.50/therm apart because of B, C and D.
Why residential gas in NY, MA and CA is on a different trajectory.
Three states are experiencing what utility regulators call "gas death-spiral pricing". The same fixed-cost base now serves fewer customers, so per-therm distribution charges escalate faster than wholesale.
CA, NY, MA distribution charge vs Henry Hub since 2020
Wholesale gas moved roughly sideways; LDC distribution charges in electrifying states grew 30% on a per-therm basis.
California /therm, early 2026
Pipeline-safety surcharges + cap-and-trade pass-through + LDC rate cases. PG&E and SoCalGas residential customers pay roughly $158 for an 80-therm winter month.
Massachusetts /therm, early 2026
Pipeline-constrained winter premium + decarbonisation cost-recovery + LDC mains replacement. Eversource and National Grid bills are among the highest in the country.
Wyoming /therm
In-state production, short distance to wellhead, low population density spreading LDC fixed costs over heating-heavy customers. The structural opposite of the death-spiral states.
Three forces behind the wedge widening
- A Electrification shrinks the customer base. California new-construction gas bans, NY local laws, MA pilot programmes and IL utility incentives are pulling customers off gas. The LDC fixed-cost base does not shrink with them; the per-therm distribution charge rises to make up the gap.
- B Pipeline-safety replacement is mandatory. Federal pipeline-safety rules require ongoing cast-iron and bare-steel main replacement; LDC rate cases recover the capital cost over decades. The CA San Bruno (2010), the Massachusetts Merrimack Valley over-pressurisation (2018) and other events accelerated the spend.
- C Climate policy adds explicit riders. CA cap-and-trade pass-through, NY CLCPA gas-system riders and the 2025 Climate Superfund Act, MA decarbonisation cost-recovery: all show up as named line items, distinct from supply and distribution. They are not market-clearing prices and they only move in one direction.
Why cheap Henry Hub gas does not show up on your bill.
Four structural reasons that residential gas customers no longer benefit from a wholesale-price drop the way they did in 2012.
Distribution is now most of the bill
The LDC distribution layer plus the customer charge typically accounts for 50 to 70% of a residential gas bill in 2026, up from 40 to 50% a decade ago. A 50% drop in Henry Hub flows through to roughly a 15 to 20% drop in the all-in residential bill; not the 50% a wholesale-watcher would expect.
LDC procurement is hedged and laddered
Utilities do not buy this winter\'s gas this winter at spot. They buy in tranches over months and years, use storage, and hedge with futures. That smooths the bill but also delays both spikes and drops. A January Henry Hub spike does not hit your bill until April; a March Henry Hub crash takes months to feed through.
Pipeline constraint pricing is geographic
New England, downstate New York and parts of California pay structural winter premiums because of constrained pipeline capacity into the load centre. The Henry Hub price is the floor; the city-gate price at Algonquin Citygate (Boston), Transco Zone 6 (NYC) or SoCal Citygate can be 2 to 5x Henry Hub on the coldest days of winter.
The death-spiral feedback is real
In electrifying states, every customer who switches to a heat pump shifts a slice of the LDC fixed-cost base onto the remaining gas customers. Per-therm distribution charges escalate; rising distribution charges accelerate further electrification; the cycle compounds. State PUC dockets in CA, NY and MA now openly call this "gas death-spiral pricing" and are debating cost-recovery alternatives.
The honest answer to "why is my gas bill not down with Henry Hub" is that wholesale supply is now less than half of what you pay. The rest moves on a regulatory clock, not a market clock.
Six things you can actually do with the per-therm price.
Translate your bill to therms first
If your utility bills in CCF or Mcf, convert to therms using the bill\'s "BTU factor" or "heating value" line. Then divide your dollar total by your therms to find your real per-therm rate. Compare that to your state\'s EIA figure.
Watch the supply vs distribution split
Your bill should separate "supply" (the shoppable part) from "distribution" or "delivery" (the regulated part). A retail-supplier offer only moves the supply line. Track them separately to see what is actually driving year-on-year movement.
Avoid variable-rate retail gas offers
Winter spot gas can move 3 to 5x in a single billing period at Algonquin Citygate, Transco Zone 6 or SoCal Citygate. Variable-rate residential gas products pass that through with no cap. Fixed-rate retail offers are the only sensible competitive option for households.
In NE / CA, plan for further LDC rate cases
If you live in MA, RI, CT, NY, NH or CA, the LDC layer is rising. Distribution-side rate cases at the state PUC are the lever. Consumer-advocate offices file expert testimony on bill impact; the rate-case docket is public.
Check the customer charge separately
A $25/month customer charge is $300/year before you burn a single therm. If you are a low-volume gas customer (summer only, or partial-electric heating), the customer charge can dominate your effective per-therm rate. Some utilities offer reduced winter-only or low-usage tariffs.
Check EIA STEO monthly
The Short-Term Energy Outlook projects Henry Hub gas + residential averages 18 months out. It updates the second Tuesday of each month. Compare your utility\'s forecast (in their rate case) with EIA\'s; if they diverge, ask why.
Common questions about US residential natural gas prices.
The EIA early-2026 figure for the US residential average is roughly $15/Mcf, equivalent to about $1.45/therm. EIA publishes the figure in Natural Gas Monthly, Table 4, with a roughly 2-month lag. Check the source for the latest reading; winter readings (Dec-Mar) are typically lower per-Mcf because the fixed customer charge is spread over more therms.
Four units describe the same energy with different reference points. 1 therm = 100,000 BTU. 1 CCF ≈ 1.025 therms (the exact ratio depends on the heating value of the gas in your pipeline). 1 Mcf ≈ 10.37 therms. 1 therm ≈ 29.3 kWh of equivalent heat. Most US utility bills present therms or CCF; wholesale prices are in $/MMBtu (1 MMBtu = 10 therms).
The wholesale price (Henry Hub) is what a power plant or industrial buyer pays at the pipeline interconnection. Residential customers pay that plus the cost of moving gas through long-distance pipelines to the city-gate, the local distribution company's investment in mains and services, a flat monthly customer charge, state and local taxes, public-benefit charges and any climate riders. In May 2026 Henry Hub is around $3.50/MMBtu (~$0.35/therm); the US residential average is around $1.45/therm. The $1.10/therm wedge is the regulated distribution layer plus fixed costs.
Three parts on most US gas bills. Customer charge: a flat $10 to $30/month for being connected. Distribution and supply charge: your therms times the all-in per-therm rate. Taxes and riders: state and local taxes, conservation programmes, low-income assistance. A typical 80 therm/month winter bill at $1.45/therm is roughly $116 + customer charge, landing around $135 to $145 all-in.
In retail-choice states (GA Atlanta Gas Light territory, OH Columbia Gas, NY Con Ed, PA Peoples and UGI, IL Nicor and Peoples Gas, etc.) the supply portion is shoppable. That is typically 40 to 60% of the all-in residential gas bill; the rest is regulated distribution. A fixed-rate supplier offer can hedge a winter spike but the long-run average tracks the utility default closely. Variable-rate mass-market gas offers are particularly risky because winter spot gas can move 3 to 5x in a single billing period.
Three reasons. Pipeline constraints: the Northeast has limited interstate capacity into New England; winter premiums can be severe. Climate-policy stack: New York, Massachusetts and California add named riders that other states do not. Death-spiral pricing: as these states electrify, gas customer counts shrink while LDC fixed costs stay the same. Per-therm distribution charges have outpaced wholesale Henry Hub by roughly 30% since 2020 in CA, NY and MA because the same fixed-cost base is now spread over fewer therms.
EIA's May 2026 Short-Term Energy Outlook projects Henry Hub gas in the $3 to $4/MMBtu range through 2026. Residential prices are expected modestly higher than 2025 in nominal terms, driven mostly by LDC rate-case decisions and infrastructure-replacement programmes rather than wholesale movement. The 2022 EU-gas-crisis peak ($1.34/therm equivalent) is still above today's baseline; another European cold winter or LNG demand surge could repeat it.
State averages are pulled from EIA Natural Gas Monthly Table 4 (latest readings May 2026) and converted from $/Mcf at the standard 1 Mcf = 10.37 therms ratio. Your actual bill may differ by a few percent because of local heating value, customer charges and any state-specific riders. For an exact figure, read the "supply charge" and "delivery charge" on your gas bill, or your utility's most recent rate filing.
Keep learning about US energy prices
Gas price evolution
Henry Hub spot vs city-gate vs residential retail, 2000 to 2026, with the widening wedge.
Electricity prices per kWh
EIA-verified state-by-state residential electricity prices, top-5 and bottom-5.
Electricity price evolution
26 years of US residential electricity prices, with the events that moved them.
What is a wholesale electricity market?
The seven US ISO/RTOs, marginal pricing, the July 2025 PJM record auction.
Deregulated states map
Which US states have residential retail choice for gas and electricity.
Fixed-rate energy offers
How a fixed-price retail contract hedges your supply price, and where it does not.
Incumbent utilities
The 170 IOUs, 2,000 munis and 800-900 cooperatives that bill you for gas and power.
Who regulates US energy?
FERC, the state PUCs, the consumer advocates, and where their jurisdictions meet.
How liberalization affects you
What retail choice means for residential customers, by state and ISO.
Texas energy hub
ERCOT, retail providers, rate plans and gas-power interaction in winter storms.
New York: 1998 to 2026
NYISO, the Reset Order, ESCO shopping, and how CLCPA reshapes gas rates.
Illinois: ComEd, Ameren and PJM
Power-side capacity step + gas-side LDC rate cases at Nicor and Peoples Gas.