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Translate a benchmark observation into an offer question
Observation
Record whether the number is spot, futures, settlement or another published series, along with its date and delivery month. Those values answer different questions.
Location
Identify the delivery point and any basis differential in the supplier’s offer. A national benchmark does not include every local constraint or transportation component.
Invoice
Request an example invoice formula including the index convention, differential, fees and exclusions. Verify how the energy unit maps to your meter data.
A historical benchmark is useful context, not an available retail quote. Evaluate a proposed fixed price against comparable written alternatives rather than a screenshot of a different wholesale product.
Worked example: why a wholesale observation is not a retail quote
A hypothetical reference price of $3.00 per MMBtu equals $0.30 per therm on an energy basis. That conversion does not add a local differential, supplier fee, transportation component, utility delivery or tax. It also does not establish that the quoted reference uses the settlement period specified in a proposed agreement.
If a proposal appears higher than that reference, ask for its included components and delivery period before attributing the entire difference to a supplier margin. Conversely, do not add a component again when the proposal already includes it. Keep the dated reference, the written offer and the normalized calculation side by side. The purpose is to explain scope and timing, not to claim that a business can purchase retail gas at the observed wholesale benchmark.
Read the series label before copying a price
The EIA Henry Hub daily series identifies its unit and observations. Keep that metadata with the number. A daily spot price, monthly average and price for a future delivery month should not be mixed in one comparison. State whether weekends, missing values or a publication delay affect the calculation required by the actual contract. Do not silently fill a missing observation with an unrelated series. EIA: Henry Hub natural gas spot-price series and units.
Build a bridge from hub to premises
Trace the proposed formula from benchmark to delivery location, then to supplier fees and utility charges. EIA’s pipeline explanation describes a transport and distribution chain; a hub observation does not price every part of it. Ask for the location differential and included capacity or balancing scope in writing. Use the result to model the offer, not to infer that a retail proposal must equal the hub price. EIA: natural gas pipeline transportation and distribution.
A benchmark observation log that survives a correction
Retain the series name, source date, observation date, delivery convention, currency and unit before inserting a number into a model. If the contract references a different publication or settlement, obtain that specified observation rather than using Henry Hub as a convenient substitute. Keep benchmark data separate from quoted adders and effective supplier fees. If a published value is corrected, record which calculation and invoice period may need review instead of silently overwriting the historical evidence.
Use the appropriate planning tool
Gas unit converter: Normalize dollars per MMBtu and the account’s energy unit consistently; converting units does not convert a spot series into a forward quote.
Sources and review notes
- EIA: Henry Hub natural gas spot-price series and units
- EIA: natural gas pipeline transportation and distribution
Reviewed October 16, 2026. Program information can change. Confirm the effective utility tariff, supplier availability and written offer before proceeding. Examples and planning tools are educational; they are not executable quotes or verified customer results.