Price check on converting to Natural gas ?

[Mrwurm]

My neighbor and I are considering an offer to connect to natural gas and get off the propane tank. A few years ago, we inquired, and were told it would cost $22,000 to bring the line about a half mile down the road to our property. (there are no other homes between us and the line, but there are some beyond us)

Since the last estimate, the line has been extended to where it is only a 1/4 mile from our properties. They did this for a subdivision that will be starting up next year. We inquired again, and now we are being quoted at $6,500 each or $13,000. This includes laying the line all the way to the house. (400 ft to my house from the road and 200 ft from his house to the road)

Actually, they said it would cost $10,000 to run it to my house and $3,000 to go the additional 200 ft to my neighbors place. My neighbor really wants this to happen and is willing to split the cost. (how bout that /forums/images/graemlins/grin.gif)

Well, what do you think of this price ? Last year I spent $1,600 on propane, this year I pre-bought at $2,200. That comes out to $183 per month all year round. I'm running a gas furnace and hot water heater. (electric dryer)

Also, does anyone think this will raise my property value ?

 

[Bird]

I don't know whether it would affect your property tax appraisal, but I would think having natural gas would increase the property's value if you tried to sell it.

 

[AndyM]

Before we built our house, the gas line ended 400 feet down the road. The gas company (Dominion East Ohio) told us it would be $4000, or $10 a foot. I put together a spreadsheet comparing the costs of natural gas, propane, oil, and electricity for heat.

Even though natural gas was the cheapest at the time, I figured we had to live in the house X number of years before we broke even on the cost of running the line. I called the salesman back from the gas company and told him we decided on propane. He called back the next day and said they would do it for $1500, which worked out to $3.75 a foot.

I agreed to that price, but the gas company would only run the line along the road; it was up to our builder to run it from the road to the house, which we had already agreed on beforehand at $3.75 a foot.

To make a long story short, if you think the price is right, you should go for it. We're quite glad we did, just for the sake of convenience, and for the fact that it adds a selling point if we sell our house.

By the way, our gas budget is $77 a month with a gas furnace and water heater. If you plan to live there a while, it will pay for itself! It also doesn't hurt to see if they will negotiate on their quote a little more.

 

[Mrwurm]

Thanks Bird and Andy, I think I will call the gas company rep on Monday and see if the price is firm. Its pretty strange working with them, they really don't seem to care if we hook up or not. They claim that they sell gas at zero profit per state regulations. Does that sound right ?

 

[Junkman]

They loose money on every sale, they make it up with volume. They forgot to mention that the profit is fixed by the state after all expenses!. Utilities don't loose money on what they do in the utility business, they loose money on what the mess with outside of the utility business. Ask him what the CEO of the utility makes a year and the answer will stager your mind. The real reason that they don't care if you hook up is the supply end of the business. When the temperatures drop, the supply goes down and use goes up. If there is too much use, then they must shut off the industrial users. There is a local natural gas to electric generating plant that was built a few years ago. When the temperature drops below 40 degrees Fahrenheit, they have to stop generating electric. I don't know if it is a State or Federal regulation.

 

[AndyM]

<font color="blue"> They claim that they sell gas at zero profit per state regulations. Does that sound right ? </font>

I don't know how it works in Michigan, but Ohio deregulated the natural gas and electric companies a couple of years ago...

There's still one major company in each part of the state that owns the lines and transports it to your home, but now you have a choice of suppliers. It all comes on one bill, but in reality, we pay a supplier charge for the gas and a "transportation" charge so the supplier can use the other company's lines.

They are all in the business of making a profit, so it seems funny that they would tell you that they sell it at zero profit... Maybe I'm missing something?

 

[_RaT_]

<font color="blue"> They are all in the business of making a profit, so it seems funny that they would tell you that they sell it at zero profit... Maybe I'm missing something? </font>

Andy, did he say if the gas company was a public utility?

 

[Mrwurm]

Well, I admit to being confused about all the deregulation activity. I'm aware that the names of all the utility companies in Michigan have changed a few times over the last few years, but the only service where I actually have a choice is long distance.

I guess the thing that really bothers me about converting to natural gas is the fact that I don't know if I'm getting a good price or a raw deal.

 

[harley152]

We're building a new home in WA and inquired about nat gas for this project and were told that if we purchased all gas appliances they would put in the line for free(440')!!! Makes me wonder if gas is such a good deal. So far haven't been able to come up with an apples to apples comparison in cost versis electric. /forums/images/graemlins/confused.gif

Jerry

 

[AndyM]

<font color="blue"> I guess the thing that really bothers me about converting to natural gas is the fact that I don't know if I'm getting a good price or a raw deal. </font>

I'm a little unclear on the total distance... What is the actual price per foot?

P.S. I looked at my gas bill this morning, and my monthly budget is $47 per month, not $67 as I had previously stated. This is for a furnace and water heater in a 1840 square foot house with R19 in the walls and R38 in the ceiling.

Figure it out two ways... price per foot for the installation, and the number of years you would break even compared to paying for oil.