How to compare electric vs natural gas heating costs

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Dan wrote:

For a geothermal heat pump, trenched vertical coil installation is the easiest and cheapest and is as efficient as other installation types in most situations. Basically you cut a trench with a big ditch witch and then stretch a coil of tubing like a flattened slinky, put it in the trench and back fill with some suitable material. Fast and easy and minimal impact to the area.
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I'll definately look into the geo when I get estimates. Since our plan is to live here about 5 years or so, upfront costs are an issue, but it's certainly worth a look.
Thanks for the reply.
Dan
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I would suggest checking with a well recommended HVAC contractor in your area. I say this because your area is different than most of the US and Canada. The choice of equipment should be one made with a good professional knowledgeable of local conditions, construction and cost.
While where I am I would certainly chose gas and a separate A/C I don't know if that would be my choice where you are. Consider the cost difference of for each system (installed cost and maintenance cost.)

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Joseph Meehan

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Thanks Joe, I agree a "good knowledgeable professional" is key. Unfortunately, finding one, even with recommendations (I have a couple though I haven't contacted anyone yet), can be a very dicey proposition.
Dan
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I can agree with that.

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Joseph Meehan

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Hi Dan,
A standard billing measure for natural gas sold in the U.S. is a "therm". One therm contains 100,000 BTUs. Alternatively, it is sometimes sold in 100 cubic foot increments (CCF). Assuming a gas furnace with an AFUE rating of 92 per cent, your net heat gain in either case is about 27 kWh.
Natural gas prices can fluctuate widely from one year to the next, but according the DOE, the average retail price for natural gas sold in Washington state in 2006 was $1.34 per CCF. Again, assuming an AFUE of 92 per cent, that puts the equivalent cost per kWh in the range of $0.05. As of September 2007 (the latest month for which data is available), it is $1.63 per CCF or $0.06 per kWh(e).
The current minimum HSPF or "heating season performance factor" for air-source heat pumps is 7.7; like AFUE ratings, higher numbers are better. A good quality heat pump with a HSPF of 8.5 will provide, on average, 2.5 kWh of heat for every kWh of electricity consumed. If you currently pay $0.08 per kWh, your effective cost per kWh of heat falls closer to $0.03. On that basis, the operating costs of a high efficiency natural gas furnace are 1.5 to 2.0 times higher than that of our reference heat pump.
If my memory is correct, domestic natural gas production peaked in 1973 and the U.S. has been relying on natural gas imports from Canada and Mexico to make up for the slack (and to a growing extent, LNG imports from overseas). Canada's natural gas production has also peaked and so I expect natural gas prices to trend upward going forward (a succession of relatively mild winters and the loss of major industrial consumers has helped to temporarily dampened prices, but this won't last forever). Over the long haul, a heat pump would likely outperform natural gas by a wide margin.
Hope this information is helpful.
Cheers, Paul

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Hi Dan,
A short addendum. To provide you with a better sense of the long term trend for natural gas prices, the following table shows the average retail cost per CCF in Washington state:
1997 - $0.564 1998 - $0.584 1999 - $0.588 2000 - $0.716 2001 - $0.979 2002 - $0.933 2003 - $0.843 2004 - $0.991 2005 - $    1.180 2006 - $1.336
Source: http://tonto.eia.doe.gov/dnav/ng/hist/n3010wa3A.htm
N..B.: The source table shows the cost per 1,000 cubic feet, but I've adjusted this to CCF, which is more appropriate for retail consumers.
From this, we see that the cost of natural gas heat is 2.4 times higher than ten years ago. Interesting to note that in 1996, the average retail cost of electricity in your state was $0.0503 per kWh and as of 2006, it had increased to $0.0614 -- a 22 per cent increase over an eleven year span (i.e., an increase that falls below the rate of inflation).
Cheers, Paul
On Fri, 14 Dec 2007 10:29:27 -0400, Paul M. Eldridge

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On Fri, 14 Dec 2007 10:29:27 -0400, Paul M. Eldridge

In the past, a heat pump was not viable for regions with severe winters such as New England. Has this changed? In what temperature range will heat pumps perform adequately? I'm looking for alternatives myself. Thanks...
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As you might guess, heat pumps won't perform nearly as well in New England as they will in Washington state given the colder climate and significantly higher electricity costs. Boston's heating degree-days number 6,371 whereas Seattle clocks in at 4,624 (higher numbers colder climate). In addition, NStar's residential customers pay $0.174 per kWh or about three times that of their Washington state counterparts.
That said, heat pumps still could be a good choice for homeowners without access to natural gas. Heating oil is currently selling for about $3.20 a gallon. One gallon of heating oil provides 139,000 BTUs and assuming an AFUE of 82 per cent, you net about 33.4 kWhs of heat per gallon -- the cost per kWh, in this case, is about $0.096.
At $0.174 per kWh, a heat pump with a HSPF of 8.5 is going to provide heat at a cost of just under $0.07 per kWh. That makes oil heat about one-third more expensive than our heat pump.
Where natural gas is available and where air conditioning is also desired, I would be inclined to go with a duel fuel arrangement where both fuels can be utilized to maximum benefit.
Cheers, Paul

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wrote:

The heat pump is important; but the real key to low-cost, efficient heat transfer in cold climates is the source of heat. Air is not a good heat source in cold climates; but the ground or water might be. Here in northern Ohio, we see more ground source (geothermal) heat pumps. What seems to have changed is how the heat transfer coils are installed in the ground. Instead of trenches, vertical shafts are drilled. These can go through rock layers and require less land area.. Sometimes water is used if the water table is high. Ground temperatues of 45-50F are the heat source during winter and the heat sink during hot weather. See: http://energymatch.com/features/article.asp?articleidF or http://www.gcbl.org/node/2233/398#comment-398
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Paul-Thank you so much for the very informative replies! Extremely helpful, and I appreciate the time they took to put together.
Dan
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You're most welcome. For a personal perspective on this, I live in Halifax, Nova Scotia and my home is a forty year old, 2,500 sq. ft. Cape Cod; over the past five years of ownership, it has been extensively upgraded in terms of its thermal efficiency. My primary heating system is an oil-fired hot water boiler (Slant/Fin), mated with a Superstor Ultra indirect hot water tank and a Tekmar control system.
In August 2005, as part of my efforts to minimize my fuel oil consumption, I installed a small, 14,000 BTU/hr ductless heat pump (7.2 HSPF). In the year prior to its installation, I used 1,973 litres of fuel oil (525 gallons) and, of this, I estimate 1,400 litres can be allocated to space heating purposes -- the balance for domestic hot water production.
In the following year, my fuel oil use fell to 827 litres, which suggests my backup boiler demand is now in the order of 250 litres or 65 gallons/year. My total electrical consumption this past year, including heat pump, is 10,300 kWh.
As I type this, the temperature here in Halifax is currently -16C (3F).
Best regards, Paul
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Dan wrote:

What altitude are you at? Microclimates in "the Seattle area" vary widely and wildly. Go up 3,000 feet and you have a whole different set of heat needs than if you are on Puget Sound.
What is the back up heat source for your heat pump? Resistance electric? What is your power ompany, Seattle City Power and Light, or Tacoma Power, with preference access to BPA hydro, or a private utility like Avista with no current access to BPA hydro?
What will the effect be two years from now of the 9th Circuit ruling last August re BPA preference power and the legislation pending in the US Senate to overturn that ruling, and let the investor owned uilities have some of the BPA hydro?
What will the gas co charge you for an install from the mains in the street into your basement?
Are you going to convert from electric to gas stove? (I would, I hate electric stoves). Willyou get a discount on the gas pipe install if you switch the stove and the domestic ot water heater while you add gas heat?
What do manual D (?), manual M (?) manual J (?) calculations tell you about the heating / cooling needs for your house. How well insulated is it? What kind of windows do you have?
You need answers to all these quesions before you can make a knowledgable "guesstimate" on the efficacy of electric heat pump vs. gas.
Gut rule of thumb here in Portland, Oregon, where we are generally without the benefit of heap BPA hydro is that gas in a 90% or 95% efficient furnace is cheaper, by a long margin, than an electric ea pump with supplmental resistance heat. And furnaces tend to have a much longer operating life than a heat pump. Espeially a heat pump who's compressor is used for AC as well as heat
And why do you need AC in the Seattle area?
How old is that heat pump you are considering replacing?
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On Sat, 05 Jan 2008 08:51:41 -0800, jJim McLaughlin

Hi Jim,
It might be helpful if we take a closer look at the numbers. The trailing block rate for residential customers who opt for PGE's standard domestic service pay $0.09246 per kWh ($0.07471 per kWh for the first 250 kWh/month), so a heat pump with a HSPF of 8.5 (Zone IV) would provide heat at an effective cost of just 3.7 cents per kWh(e).
For those not be familiar with the term, HSPF or Heating Seasonal Performance Factor is defined as "the total space heating required during the space heating season, expressed in Btus, divided by the total electrical energy consumed by the heat pump system during the same season, expressed in watt-hours."
Source: ARI Standard 210/240-2006
It's important to note that this seasonal average cost of 3.7 cents per kWh includes the cost of supplemental or backup electric resistance heat -- the HSPF rating incorporates this additional backup heat into the final numbers.
In terms of natural gas, according to the DOE, Oregon residents paid an average of a $1.43 per therm in 2006 (the average cost as of October 2007 was $1.56). Assuming an AFUE of 90 per cent, that puts the current cost of gas heat at 5.9 cents per kWh(e). That being the case, the operating costs of a high efficiency natural gas furnace are 1.6 times higher than our reference heat pump.
Cheers, Paul
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Paul M. Eldridge wrote:

That average cost as of October, 2007, does NOT repeat NOT take into account the NWNG petiion o Oregon PUC to REDUCE (yes, reduce) the gas rates in the NWNG service area as of 1 Decmber 2007.
Assuming an AFUE of 90 per cent, that puts

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On Sat, 05 Jan 2008 15:20:17 -0800, jJim McLaughlin

Hi Jim,
You indicate rates were reduced December 1st, but you didn't say by how much. If you can kindly provide me with the current cost per therm/CCF, I'd be pleased to rework the numbers based on this new rate.
BTW, for a historical overview of Oregon's natural gas rates, see: http://tonto.eia.doe.gov/dnav/ng/hist/n3010or3M.htm
Note: Divide these values by 10 to calculate the cost per therm.
Cheers, Paul

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With specific regards to Oregon, the average retail cost of natural gas per therm/CCF over the past ten years is as follows:
1997     $0.621 1998     $0.681 1999     $0.713 2000     $0.812 2001     $0.970 2002     $1.054 2003     $0.984 2004     $1.111 2005     $1.290 2006     $1.453
Source: http://tonto.eia.doe.gov/dnav/ng/hist/n3010or3A.htm
The average residential cost of electricity per kWh during this same period is as follows:
1997     $0.0556 1998     $0.0582 1999     $0.0575 2000     $0.0588 2001     $0.0629 2002     $0.0712 2003     $0.0706 2004     $0.0718 2005     $0.0725 2006     $0.0748
Source: Table 8, http://www.eia.doe.gov/cneaf/electricity/st_profiles/oregon.html
Assuming an AFUE of 90 per cent and a HSPF of 8.5, the average cost per kWh(e) of natural gas and electric heat in each of these years is as follows (the third column represents the cost premium of natural gas heat versus the aforementioned heat pump):
1997     $0.0235     $0.0222     1.1 X 1998     $0.0258     $0.0233     1.1 X 1999     $0.0270     $0.0230     1.2 X 2000     $0.0308     $0.0235     1.3 X 2001     $0.0368     $0.0252     1.5 X 2002     $0.0400     $0.0285     1.4 X 2003     $0.0373     $0.0282     1.3 X 2004     $0.0421     $0.0287     1.5 X 2005     $0.0489     $0.0290     1.7 X 2006     $0.0551     $0.0299     1.8 X
Please note these are state averages, so results will vary according to the specific service provider.
Cheers, Paul
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Then again, we could run a $200 unvented gas heater with a 100% AFUE and 11% latent heat and run an $80 window AC with an HSPF = EER = 10 indoors when the house RH exceeds 50% to convert that to sensible heat...
Or forget the gas heater and run a few ACs with a heating thermostat when the house drops below 70 F and use a humidistat and a solenoid valve and a soaker hose to wet a basement floor when the house RH drops below 50%.
Nick
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Paul M. Eldridge wrote:

Paul -
I dug aound the web site for the local gas company (Northwest Natural Gas, Portlad, Or) and came across their Oregon Tariff Schedule.
The price reduction was actually 1 November 2007, not 1 December 2007.
The link to the tariff is:
https://www.nwnatural.com/CMS300/uploadedFiles/242ai.pdf
I am giving you that as I am not really sure how to read the tariff. It seeems that you havea lot more skill at that than I do.
If I am reading the Oregon Tariff schedule correctly, the current per Therm cost for residential gas service is $ 1.22449.
I am looking for my local electric utility rate (Portland Geeral Electric) and will shoot that out to you as soon as I find it. PGE's rates are at besyt byzantine.
By the way, thanks for the ongoing education.
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