Natural gas, propane heating oil costs for hot water heating
What are differences in cost between natural gas, propane, heating oil to consider when making decision on hot water heating in either tankless or storage hot water heaters
The following up to date (Feb 2004) press release is a very informative article and gives a good overall view of how propane and natural gas as well as heating oil energy prices are different and variable
Press Release Friday, February 13, 2004
Division of Energy Contact: Jim ONeal, Energy Analyst
E-Mail: jim.oneal@doa.state.wi.us
Phone: (608) 266-8971
Wisconsins Residential Winter Heating Fuels Price Survey
The Wisconsin Department of Administrations Division of Energy conducts a statewide survey of liquid propane gas (LP), heating oil and natural gas residential prices throughout the winter heating season.
Table shows prices at February 9th 2004
| Date | Heating Oil | LP Gas | Natural Gasb,c | ||
| ($/gallon) | ($/million Btu) | ($/gallon) | ($/million Btu) | ($/million Btu) | |
| Feb. 9, 2004 | $1.35 | ($9.72) | $1.30 | ($13.66) | ($9.221 |
Notes ....
a Million Btu is a unit of energy and equals 10 therms. For example in February 2004, the average cost of natural gas is $9.221 per Million Btu or $0.9221 per therm.
b Natural gas has an average fixed charge of $6.10 per month in February 2004, which would add about $0.47 per million Btu in February 2004. The actual increase will depend on usage, which varies by month, and the specific utilitys fixed charge.
c For the months of November through April, the utilities add an additional cost per million Btu that reflects the costs of building interstate natural gas pipelines large enough to serve the peak winter heating needs of their customers. This results in a jump in natural gas prices in November.
Compared to a year ago, the price of heating oil has decreased 9.2 cents per gallon (6.4 percent), while the LP price has increased 5.7 cents per gallon (4.6 percent). Compared to prices in March, the end of last years heating season, heating oil prices are down 13 cents (8.8 percent) and LP prices are down 8.3 cents (6 percent). Since the survey was conducted on January 26, 2004, the price of heating oil has decreased 1.7 cents per gallon (1.2 percent), and the price of LP has decreased 0.4 cent per gallon (0.3 percent).
Prices may be higher or lower in some areas of the state because origin of supply and transportation costs vary around Wisconsin. These prices are the charge prices. Customers who pay in cash may be eligible for a cash discount.
The price per million Btu of natural gas to residential customers is 12.3 percent higher than a year ago (February 2004) and 2.6 percent higher than last month (January 2004). The procedure for estimating the statewide natural gas price is a weighted average price. For each utility, the weight used was its residential gas sales in the corresponding month one year ago.
Seasons Outlook
Compared to this time last year, the price of propane is 4.6 percent higher, heating oil is 6.4 percent lower and natural gas is 12.3 percent higher. So far, this heating season has been 4.8 percent warmer than normal and 2.3 percent warmer than last winter in terms of heating degree days.
At the end of last heating season, natural gas inventories were at record low levels. However, since the end of the heating season, high natural gas prices have discouraged natural gas consumption in the industrial sector and milder summer weather and high prices have reduced demand in the electric power sector. Therefore, more natural gas was available for injection into storage, and injections consistently exceeded the five year average. The result was that natural gas inventories at the beginning of November exceeded three trillion cubic feet, which is the level necessary to assure that natural gas supplies are adequate to meet normal winter needs. Currently, natural gas inventories are 2.3 percent below the five-year average but 16.9 percent greater than last year. However, because of the high cost of natural gas placed in storage, combined with current high prices, we estimate that over the winter heating season the average cost of natural gas for residential customers will exceed last years prices by 5 percent.
Nationally, propane inventories are 12.5 percent below the five-year average but 18.1 percent greater than last year. In the Midwest Region, where Wisconsin and the largest population that heats with propane are located, inventories are 6.1 percent below the five-year average but 32.4 percent greater than last year. We believe propane price this heating season will average about 10 percent higher than last years prices. Nationally, distillate inventories (low and high sulfur) are down 1.3 percent from the five-year average but are 14.2 percent higher than a year ago. In the Midwest Region high sulfur distillate fuel (heating oil) is 16.5 percent below the five-year average but 4.4 percent greater than last year, and we believe, on average over this heating season, Wisconsin heating oil prices will be about the same as last year.
Approximately 66 percent of Wisconsin households heat with natural gas, 11 percent with propane and 8 percent with heating oil.
Help With Heating Bills
Wisconsin's Home Energy Assistance Program helps households with incomes below 150 percent of the federal poverty level ($27,600 a year for a family of four) pay for home energy costs. This program is operated through county human/social services departments, Indian tribal agencies and community agencies, under the direction of the Division of Energy. Low income households may receive payments under the federal Low Income Home Energy Assistance Program and the state public benefits program. The amount depends upon household size, income level and home energy costs. Households may also qualify for crisis assistance benefits, which can include purchase of home heating fuel, cash grants to fuel suppliers, temporary shelter and heating unit replacements or repairs. For additional information, households should contact their local county human/social services department or call this toll free number (866/432-8947).