If you are reading this, you almost certainly already buy natural gas — every Texas commercial facility with gas equipment has gas service. The real question is whether you are actually buying it on terms that fit your business, or whether you are sitting on the default supply tariff that the local distribution company hands every commercial account at first activation, paying a markup that has compounded for years.

The point of this guide is to give a plant manager, facilities director, or CFO the complete procurement playbook for commercial natural gas in Texas: who decides what, what data you need, how to time the shop, how to read a marketer's quote, what to negotiate in the contract, and what to do between renewals so you don't get caught by an evergreen rollover on the worst possible winter month. We will assume your business is somewhere between 5,000 and 250,000 Mcf of annual consumption — restaurants, hotels, multi-family operators, event venues, manufacturers, healthcare campuses, warehouses, places of worship, retail chains. The mechanics scale up and down from there, but the playbook is the same.

For the foundational pricing model — Henry Hub, basis, LDC tariff stack, and what actually drives the rate — read our companion article on commercial natural gas rates in Texas. This article picks up where that one ends: assuming you understand what drives the rate, how do you go and shop it?

Step 1: Confirm Whether You Can Even Shop

The first question in commercial gas procurement in Texas is the one most facilities teams skip: are you on a rate class that even allows you to shop the commodity? Texas natural gas is delivered by regulated local distribution companies — Atmos Energy (Dallas/Fort Worth/North Texas/Panhandle), CenterPoint Energy (Houston/East Texas), Texas Gas Service (Austin/RGV/El Paso/Central Texas), and CPS Energy (San Antonio, municipal). On the smallest tariffs (small commercial bundled service), the LDC supplies both the commodity and the delivery, and there is no commodity to shop separately. On larger tariffs — typically called Transport Service, Transportation Service, Choice Gas, or Commercial Transportation depending on the LDC — the customer can arrange their own commodity supply through a licensed marketer or broker, while the LDC simply delivers nominated volumes through its pipes.

The annual usage threshold for transport service eligibility varies by LDC and territory, but the practical lines are roughly:

Pull your last 12 months of gas bills. Add up the Mcf. If the answer is above 5,000, transport service is worth investigating. If it's above 30,000, it should be active procurement. If you are sitting on a bundled tariff above 30,000 Mcf, you are very likely paying 10 to 20% more on the commodity than you should be — purely from the structure of how you are buying, before any contract negotiation even starts.

Step 2: Pull 12 Months of Usage Data

Every supplier quote, every contract, every meaningful negotiation runs off 12 to 24 months of historical Mcf consumption broken out by month. Your LDC has the data; you just need to request it. There are two ways to do it.

Option A: Request directly from the LDC. Each Texas LDC has a customer-service line and a form for commercial customers to request consumption histories. Turnaround is typically 7 to 21 days. The data comes back as a monthly Mcf list with billed amounts and rate-class designation. Use this when you are doing a self-directed procurement and have not yet engaged a broker.

Option B: Have your broker pull it under a Letter of Authorization. A Letter of Authorization (LOA) is a one-page document signed by an authorized representative of your business — usually the owner, CFO, or facilities director — that authorizes a named third party (a broker, a specific marketer, or a consultant) to request your usage history and contract status from the LDC and from any current supplier. The LOA does not commit you to anything. It is not a contract. It can be revoked in writing at any time. All it does is give the third party permission to pull data on your behalf, which the LDC will not release otherwise because of privacy rules.

An LOA-pulled data request typically returns within 3 to 7 business days because brokers have established LDC data-portal relationships. If you are working with a broker, the LOA is the foundation of every quote that follows.

Once you have 12 months of data, calculate three numbers that will drive every subsequent decision:

  1. Total annual Mcf. Confirms your tariff-eligibility threshold and gives suppliers the load-shape input they need to quote competitively.
  2. Peak-month Mcf as a percentage of average month. Your winter peak divided by your annual average. A flat profile is around 1.2x. A seasonal profile (heating-dominant) is 1.8x to 3.0x. This determines your swing bandwidth requirement.
  3. Winter share of annual consumption. November-March Mcf divided by annual Mcf. A 50%+ winter share means you have meaningful winter price exposure and should be considering a hybrid or fixed structure with winter protection. A 30% or lower winter share means you have more flexibility on contract structure.

Step 3: Confirm Your Rate Class Is Correct

Before shopping the commodity, audit the rate-class assignment on your current bill. Pull your most recent LDC bill and identify the rate class — it will be listed in the header or alongside the delivery charges, usually something like "Rate C — Commercial," "Rate T — Transportation," or "Rate 3 — Large Commercial." Look up the current LDC tariff filing online; Atmos, CenterPoint, and Texas Gas Service all publish tariffs through the Railroad Commission of Texas. Confirm your consumption tier actually matches your assigned rate class.

This is where many commercial customers find money. A customer at 25,000 Mcf/year that is sitting on a small-commercial rate class instead of the medium-commercial rate class pays a higher fixed customer charge plus a higher per-Mcf delivery charge — typically 15 to 30% more on the delivery portion of every bill. The LDC will not move you proactively. You have to file a rate-class change request, which usually requires 12 months of usage documentation and an authorized signature. Atmos calls this a "Rate Schedule Change Request"; CenterPoint and Texas Gas Service have analogous forms. Once filed, the change takes effect on the next full billing cycle, and the savings compound from there.

If your consumption justifies transport service and you are not on it, the rate-class change is the single largest pre-commodity decision you can make. We have seen accounts cut their all-in $/Mcf by 12% just from moving from bundled commercial to transport service before any commodity contract is even negotiated.

Step 4: Decide Your Contract Structure

Before requesting quotes, decide which structure you are shopping. Mixing structures across suppliers makes comparison nearly impossible. There are four practical structures, and the right one depends on your load shape and risk tolerance.

Fixed-Price Contract

Locks the all-in commodity rate ($/MMBtu, basis included) for the contract term, typically 12, 24, or 36 months. Maximum budget certainty; the supplier absorbs market risk and prices a 5 to 15% risk premium into the rate. Best for: tight-margin businesses, restaurants, hotels, places of worship, multi-family operators, healthcare facilities, and any business where a winter spike would create a material P&L issue. Worst for: businesses with a confident view that NYMEX is overpriced relative to forward expected delivery.

NYMEX-Indexed Contract

Ties the monthly commodity rate to the NYMEX Henry Hub monthly settle plus a transparent basis adder and marketer fee. Full market exposure, both upside and downside. Best for: businesses with cash-flow flexibility to absorb monthly variance, sophisticated facilities teams that can act on monthly market data, businesses with conviction that the forward strip is overvalued. Worst for: businesses where a single $30,000 winter bill creates a board-level conversation.

Hybrid (Block-and-Index)

Splits the load between fixed and indexed components — typically 50/50, 60/40, or 70/30. The fixed block protects against winter spikes; the indexed portion captures market downside. Best for: mid-size commercial accounts between 5,000 and 50,000 MMBtu/year. Most balanced structure for the average commercial buyer. Use the same logic as block-and-index electric procurement covered in our hedging guide — fix the portion that has to be predictable; let the rest float.

Trigger / Managed Hedge

Indexed base contract overlaid with pre-set price targets that automatically execute fixed-price blocks when NYMEX hits the target. Best for: facilities and energy committees with structured procurement policies, multi-site operators, and any organization that can commit to disciplined target-setting without second-guessing. Worst for: businesses that will revisit and revise targets every time the market moves — operational discipline is what makes triggers work, and the program failure mode is targets that never fill because the buyer kept lowering them.

For a mid-size Texas commercial buyer with seasonal load — restaurants, hotels, event venues, multi-family — we typically recommend a 60/40 or 70/30 hybrid with the fixed portion sized to cover essentially all of the November-March consumption. This combines winter protection with summer market participation and matches the structural risk profile most commercial operators have on their actual P&L.

Step 5: Set Your Term Length

Commercial gas contracts in Texas run 6 to 60 months, with 12, 24, and 36 months covering 90%+ of commercial deals. Term length is a function of two things: where you are on the forward NYMEX curve, and how long your business operationally wants to be committed.

Sign during favorable market windows. The NYMEX forward strip tends to bottom in shoulder seasons (April-May and September-October) when storage is comfortably full and weather isn't actively moving the market. Sign at the front of a winter storm or in the middle of a summer heat wave and you are locking in panic pricing.

Step 6: Solicit Competitive Bids

Texas has roughly 8 to 15 licensed natural gas marketers actively quoting commercial business across the major LDC territories — names that show up frequently include Constellation, CleanSky Energy, YEP Energy, Vista Energy Marketing, Gas South (active in Texas commercial), and NRG-affiliated suppliers, alongside several regional marketers. Each has different competitive positioning by season, by LDC, and by load size.

Run a competitive RFP. Distribute your 12-month usage history plus a one-page RFP describing the structure, term, swing requirements, and decision date. Require all suppliers to quote in the same units ($/MMBtu, not $/Mcf — easier comparison) with the same components broken out (commodity, basis, marketer fee). Set a deadline. Compare bids side by side.

Without competitive bids, you cannot know whether a single supplier's quote is competitive. The spread between the best and worst quote on the same RFP is typically 10 to 25%, and the best quote often comes from a marketer that the customer would never have called directly. This is the core argument for using a broker — the broker maintains live pricing relationships with all of the active commercial marketers and can run the RFP in a few business days, where a self-directed RFP run by a facilities team typically takes 4 to 8 weeks and rarely captures the same pricing.

If you do run the RFP yourself, expect to spend 20 to 40 hours of staff time on the cycle: identifying marketers, executing LOAs with each, exchanging data files, reading and normalizing quotes, negotiating contract redlines. Most facilities teams can do this once. Doing it well every renewal cycle, while also running the facility, is the harder problem.

Step 7: Compare Quotes on All-In Cost, Not Headline Rate

Two quotes at "the same" $4.50/MMBtu headline rate can produce wildly different actual costs. The decomposition that matters:

Build a one-page comparison table with these 9 columns and every competitive supplier's bid in a row. The visual immediately shows which suppliers are aggressive on rate but punitive on terms (and vice versa). The right answer is usually neither the cheapest headline rate nor the broadest terms — it's the supplier in the top third on both dimensions with a credit profile and operational track record you trust.

Step 8: Negotiate the Contract

Commercial gas contracts are negotiable. Not the LDC delivery tariff — that is regulated and identical for all customers in the same rate class — but the marketer contract for commodity supply. The provisions worth negotiating:

Bandwidth and Swing

If your peak month is 2.5x your average month, you need a swing band that accommodates that variance without triggering overage. A plus-or-minus 15% band against an average monthly nomination will trigger overages every winter for a seasonal business. Push for plus-or-minus 25% or wider; alternatively, ask for monthly-nomination-based bandwidth where the customer nominates each month based on weather forecast and bandwidth applies against the monthly nomination rather than annual average.

Overage Pricing

Insist on overages priced at NYMEX monthly settle plus a defined basis and adder — not at "day-of spot price," which can be 5x to 10x the contracted rate during winter. The day-of spot pricing structure was responsible for many of the worst commercial gas bills during Winter Storm Uri in 2021 and Winter Storm Fern in January 2026.

Force Majeure

The supplier wants broad force-majeure protection covering weather, pipeline outages, regulatory changes, and counterparty failures. The customer wants narrow force-majeure protection covering only genuine acts of God plus regulatory mandates. The negotiated middle: weather and regulatory inclusion, but with a clear cap on the customer's exposure during a force-majeure event (e.g., commodity capped at 200% of contracted rate during the event).

Material Adverse Change

Many commercial gas contracts include a MAC clause permitting the supplier to terminate or reprice on a defined market move. The customer should negotiate this out entirely if possible. If the supplier insists, narrow the MAC trigger to extreme moves (50%+ market shift sustained for 30+ days) and require equivalent customer-side rights to terminate without penalty.

Pass-Through Clauses

Limit pass-throughs to LDC tariff changes filed and approved by the Railroad Commission of Texas. Reject broader language permitting pass-through of "any cost increase," "pipeline capacity reservation charges," or "supplier credit charges."

Credit and Collateral

Most commercial gas contracts require some form of credit assurance — guaranty, letter of credit, deposit, or unsecured credit limit based on the customer's financial statements. For mid-size businesses, this is usually a 1- to 3-month deposit or an unsecured credit line if the business has filed financials. Larger commercial accounts negotiate unsecured credit limits with no collateral. Push back if the supplier demands more collateral than is justified by your credit profile.

Termination Mechanics

Confirm the exact end date and the written-notice requirement for termination. Avoid silent auto-renewal at default rates. The cleanest structure: contract ends on a specified date, customer must provide 60 days written notice to terminate (which is forgiven if the customer signs a new contract or renewal with the same supplier), and if no notice is given, the customer rolls to a defined month-to-month rate equal to NYMEX plus basis plus a small adder — not to the LDC default supply tariff, which is materially more expensive.

Step 9: Execute and Onboard

Once you sign, the supplier handles the operational switch — registering the meter with the LDC, coordinating the delivery transition, and establishing the monthly nomination workflow. For transport service, you (or your broker on your behalf) submit a monthly nomination for the upcoming month's expected consumption. The nomination is typically due by the 22nd to 25th of the prior month for the next-month delivery. Get the nomination right and you stay inside the bandwidth; get it wrong and you trigger overages or underages.

Your first bill from the new supplier — usually 30 to 60 days after the operational switch — is the most important bill of the relationship to audit. Compare it line by line against the contract: commodity rate, basis, marketer fee, delivery charge, riders, taxes. The error rate on the first bill is meaningfully higher than steady-state because setup data was just entered. Catch errors in month one before they compound for a full year.

Step 10: Manage the Account Between Renewals

Most commercial gas savings is captured at signing, but a meaningful percentage is captured (or lost) between renewals through three workflows that most facilities teams don't get to consistently.

Monthly Nomination Discipline

For transport-service accounts, every month's nomination should be based on the prior year's same-month consumption adjusted for weather forecast (heating-degree days) and any operational changes (new equipment, facility expansion, occupancy changes). A nomination that is 20% too low triggers overage; 20% too high triggers underage. Both cost money. Well-managed transport accounts run within plus-or-minus 5% of nomination consistently.

Quarterly Bill Audit

Pull one bill per quarter and verify line items: rate class, commodity rate matches the contracted formula, basis matches the agreed differential, delivery charges match the published LDC tariff, riders are at current filed rates, taxes are applied correctly (or correctly excluded for manufacturing-use volumes). Errors at any of these levels are common and almost always favor the supplier when uncorrected.

Renewal Calendar

Put the contract end date in the procurement calendar with reminders at 9 months, 6 months, and 4 months prior. Start re-shopping at the 6-month mark in normal markets, earlier (8-9 months) if the forward curve is in a buy zone, later (4 months) if you are deliberately waiting for a market move. Texas suppliers offer future-dated contracts that begin the day after current contract expiration, with no penalty for early signing — so once you have shopped and selected a contract, you can lock the renewal months ahead of the actual switchover date.

The same renewal-window logic applies to commercial gas as to commercial electricity. Late renewals — and the auto-renewal evergreen rollovers they cause — are the single largest source of commercial-energy overpayment in Texas.

Should You Buy Direct or Use a Broker?

Texas commercial gas customers have three procurement options.

Default supply (no shopping). Stay on the LDC bundled tariff. You pay the LDC's monthly Purchased Gas Adjustment (PGA), which is a pass-through of the LDC's commodity cost plus a small administrative margin. No commodity negotiation, no contract. Worst pricing typically, but zero workload. Appropriate only for very small commercial accounts (under 1,000 Mcf/year) where the workload of shopping isn't justified by the savings.

Direct shop with marketers. Run your own RFP. Identify the active commercial marketers in your LDC territory, execute LOAs with each, exchange data, normalize quotes, negotiate contracts. Captures most of the savings of the active-procurement approach if executed well. Workload is meaningful — 20 to 40 hours per cycle for a single-site operation, more for multi-site portfolios. Renewal cycle every 12 to 36 months. Appropriate for facilities teams with energy-procurement experience and bandwidth.

Use a licensed broker. The broker maintains live relationships with all of the active commercial marketers, runs the RFP under a single LOA, normalizes the quotes, negotiates terms, audits bills, and manages the renewal calendar. Broker fee is paid by the supplier (not the customer) and is a transparent $/Mcf adder built into the price the supplier quotes. The aggregated volume across the broker's client portfolio typically produces better commodity pricing than a single business gets going direct, so the broker fee is offset by the rate improvement. Appropriate for almost all Texas commercial accounts above the small-commercial threshold.

The honest answer for most Texas commercial buyers between 5,000 and 100,000 Mcf/year: a broker is the right choice. The math is a wash on out-of-pocket cost (the broker is paid from the same supplier margin that exists whether or not the customer uses one), the workload reduction is meaningful, and the bill audit and renewal-calendar discipline alone usually pays for the relationship multiple times over the contract cycle. Above 100,000 Mcf/year, some businesses bring procurement in-house with a dedicated energy manager — at that scale, the workload supports the headcount.

Common Mistakes Texas Commercial Buyers Make

From thousands of hours of bill audits and contract reviews, the patterns repeat:

  1. Staying on bundled tariff above 30,000 Mcf/year. The single largest source of overpayment. The fix is a one-page rate-class change request that takes 30 days to execute.
  2. Auto-renewing into a default-rate evergreen. Contract ends, no one notices, the LDC or supplier rolls the customer to month-to-month at a punitive rate. We have seen 6-month evergreen tails cost commercial accounts more than the savings from the original contract.
  3. Signing at the wrong point in the curve. Locking in 24 months in the middle of a winter storm or August heat wave — the worst possible pricing windows. The fix is a procurement calendar that doesn't depend on the urgency of an expiring contract.
  4. Restrictive bandwidth on seasonal load. Plus-or-minus 10% swing band on a business with a 2.5x winter-to-average ratio guarantees overages every winter, wiping out the savings of the negotiated rate.
  5. Missing the basis line. A quote at "$4.20 NYMEX" sounds great until you realize the contract is actually NYMEX plus Houston Ship Channel basis plus a marketer fee — the real number might be $4.65. Quotes need to be normalized to all-in $/MMBtu before comparison.
  6. Accepting broad force-majeure language. The clause that quietly converts a "fixed price" contract into a variable-priced contract during the exact weather events you signed to protect against.
  7. Not auditing the first bill. Setup errors in the first cycle compound for the contract term. A 60-minute bill audit on the first invoice from a new supplier catches almost all of these.
  8. Confusing $/Mcf and $/MMBtu. A $4.00/Mcf quote is roughly $3.85/MMBtu — not the same as a $4.00/MMBtu quote. Unit confusion in side-by-side comparisons leads to bad decisions.
  9. Treating gas procurement like electricity procurement. Related, but the markets differ — gas has the LDC tariff layer that ERCOT does not, basis matters more, the marketer landscape is smaller, and seasonal load shape matters more. The instincts that work for electricity (covered in our commercial electricity guide) need adjustment for gas.

The 90-Day Commercial Natural Gas Shopping Calendar

A realistic procurement cycle for a Texas commercial gas account, starting from "we need to shop this":

For renewals, this same cycle should begin 6 to 9 months before the current contract end date, with the new contract signed 3 to 4 months before old-contract expiration. Texas suppliers will write future-dated contracts that begin the day after the existing contract ends, with no early-termination penalty for advance signing.

The Bottom Line

Buying natural gas for a Texas commercial business is mechanically straightforward but operationally demanding. The procurement steps are simple — pull data, confirm rate class, decide structure, run an RFP, negotiate, sign, audit, calendar the renewal — but each step has detail that most facilities teams don't have the bandwidth to get right consistently, and the cumulative impact of getting them all right is 15 to 25% lower commodity cost versus the default-supply baseline.

For Texas commercial operations between 5,000 and 250,000 Mcf annually — restaurants, hotels, event venues, multi-family operators, manufacturers, healthcare facilities, schools, places of worship, warehouses, retail chains — active procurement done well is the difference between energy as a line item that runs the business and energy as a line item that the business runs. The market gives you the tools. The question is whether you have the time, the relationships, and the discipline to use them.

Pair this with the pricing-side reading in our complete guide to commercial natural gas rates in Texas, and you have the full picture — what drives the rate, what to do about it, and how to execute the shopping process end-to-end.

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