The City of Tipton purchases natural gas from the Northern Natural Gas Pipeline from wells producing the gas in Oklahoma and Texas. The City takes ownership at a transfer point in Kansas and pays for pipeline transportation from that point to the Town Border Station north of town. From there the gas enters the city's distribution system, pressures are reduced, and meters measure the gas used at the border station and at each residential and commercial meter.

The City pays about $4,000 per month for this transportation during the summer (April thru October) and $30,000 per month during the winter. This is a flat rate for pipeline capacity whether gas is flowing or not and during some winter months, may account for 25 to 30% of natural gas bills.

The City also assumes a great deal of expense maintaining the gas distribution lines and meters throughout the City and pays for the natural gas itself. The fluctuation of natural gas (energy) prices creates the Purchase Gas Adjustment which appears on utility bills. Although the City contracts for future gas purchases, firm pricing is unavailable for more than about 50% of average use since temperature changes dramatically affect the amount used. If the City contract for more than is used, the unused amount must still be paid for.

Natural Gas Rates
(Rate structures are updated every April. Current rates updated April 3, 2006)

Residential & Commercial - Firm Interruptable Minimum First 5 Ccf Next 15 Ccf Next 30 Ccf Next 450 Ccf Next 500 Ccf Next 1000 Ccf	Basic Service Charge of $3.00 $5.76 $5.76 $0.7252 per Ccf $0.7102 per Ccf $0.6722 per Ccf $0.6662 per Ccf $0.6612 per Ccf
Grain Dryer - Interruptable Minimum First 70 Ccf Over 70 Ccf	Cost $48.88 $48.88 $0.6983 per Ccf
Grain Dryer - Firm Minimum Over 70 Ccf	Cost $48.88 $0.6983 per Ccf
Industrial Interruptible Minimum First 200 Ccf Next 19,800 Ccf Over 20,000 Ccf	Cost $127.26 $127.26 $0.6363 per Ccf $0.6284 per Ccf
Industrial Firm Minimum First 200 Ccf Next 300 Ccf Next 500 Ccf Next 4000 Ccf Next 5000 Ccf	Cost $133.16 $133.16 $0.6658 per Ccf $0.6598 per Ccf $0.6478 per Ccf $0.6448 per Ccf