Therm billing is the standard throughout the natural gas industry because it provides consistent billing units as gas flows from the production well to the individual customerís meter. By billing in therms, a customer pays for the heating value of their natural gas, not the volume of gas used.
The number of therms used is determined by multiplying the CCF consumption by an "energy factor". The "energy factor" is determined from the monthly average BTU content of the natural gas as it is delivered through the transmission pipeline.
1 Therm (natural gas) = 1 CCF x Energy Factor (BTU conversion factor)
Think of therms in comparison to grades of gasoline. A car may get better mileage and use less gas on 93% Octane than 86% Octane. The carís tank may hold only 20 gallons of gas, but depending on the grade of gasoline, its performance may be more efficient. A higher thermal factor of natural gas means appliances may operate more efficiently and ultimately use less volume.