Natural gas is a commodity and its price is constantly changing, reflecting current market conditions. Each month, TGS calculates what it paid to purchase gas for its customers and expresses this, without markup, on the bill as the cost of gas/purchased gas adjustment (COG/PGA). The COG/PGA fluctuates each month, with market conditions.

TGS pays different amounts for gas in different locations depending on certain factors. The number of suppliers to a market, the amount of gas consumed by customers in that market, and local system constraints may affect the price that TGS, and its customers, pay for gas. In addition, the PGA includes local franchise taxes, other taxes and pipeline fees, which are different from one location to another. This is why customers in different parts of the state may have different PGAs.

Texas Gas Service Company purchases natural gas for its customers year-round, using a competitive bidding process. Gas costs are passed on to customers with no profit to the company. TGS earns revenue from delivering gas through its pipeline infrastructure, through rates regulated by cities (for customers in incorporated areas) and the Texas Railroad Commission (for customers in unincorporated areas).