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.

 

[AndyM]

<font color="blue"> So far haven't been able to come up with an apples to apples comparison in cost versis electric. </font>

Do a search for the state utilities commission or maybe the university extension office online. You might find tables comparing heating methods in either of those places. After I found the numbers for Ohio at that time, I took them and plugged them into a spreadsheet to figure which way would be cheapest, with all factors included (cost of the furnace, storage tanks, installation, etc.)

 

[Mrwurm]

Maybe thats why I don't know if its a good deal. The gas company has provided no details on distance or cost per foot, just a flat price.

 

[kenmac]

Where I live it isn't a state or fed regulation. It is a deal that is made with industrial users.Industrial users buy gas( from the gas co. ) for alot less than a residental user. Gas companies usually buy gas when prices are low so they stock up on the amount that they think they will sell durning the winter.The colder it gets the higher the usage. If the gas co don't cut the high users off (industrial users) the gas co could run out of that low priced gas that they stocked up on . They would have to go back to the supplier and purchase gas at possibly a higher rate. Some of the large industrial customers can switch to an alternate fuel such as propane, coal, diesel and keep operating. I don't know if your gas utility will do it or not. but, after you pay for the line to be installed, anyone that connects onto the line that you paid to have installed will pay a fee. that connection fee should be paid back to you so that you get your investment back.

 

[gsxr1100]

Our G&E installed the piping from the street to my house for FREE! They do that for everyone. The piping was a complete joke since I looked at it when I install my inground sprinklers. Paid a plumber ($200 to install the pipe in house to all outlets); not rocket science.

I had everything oil in my house and went to NG. Much better, cleaner, etc.

Furnace is 94% efficient and overkill for my house (made for businesses), fireplace is 84% , water tank is (no clue on %), stove for cooking (no clue) and Maytag drier (no clue).

Is it worth it, yes in the long run. For me it did bring my value of my home up about 5X to 6X what I paid for the items. Then again, I got the furnace, water tank, A/C-a coil and compressor at dealer price). Installed for about the price of my new BX22 54” mowerdeck!

Here (link below) is what I pay for 1,800 sq feet heating and cooling in Mass. Summer it gets over 100 F and winters are about 5 to 10 F at nights (some –0 F). Inside my home is 68 summer and 72 winter..

Don’t forget I have a 75 gallon reef tank running 24/7 with lights (T5), pumps, heaters, wavemakers, etc.

For me, it is cheap…

http://home.comcast.net/~mburnickas/gas_and_elec.pdf

 

[Mrwurm]

Thanks for the reference material Mike /forums/images/graemlins/cool.gif

Its much appreciated /forums/images/graemlins/smile.gif

 

[kensfarm]

"That comes out to $183 per month all year round. I'm running a gas furnace and hot water heater. (electric dryer)"

Wow.. my house is all electric.. I use wood pellot stove & fireplace to heat in the winter. Last's month's electric bill was $119. Wood pellots run $179/ton.. I use about 2 1/2 - 3 tons for the winter. Avg. over 12 months that's $45

Currently run..

2 window AC units(one is 15000 btu.. runs 24/7 in summer)
water heater
stove & microwave
washer & dryer
2 Fridge/Freezers
lights/TV/Computer
2 fans & 3 flouresant bulbs running 24hrs day in barns..
filter pump for pool (runs 24 hrs day)
well pump for house
well pump for irrigation()

I've heard by 2007 w/ electric deregulation.. prices will skyrocket. $10,000 would pay the electric bill for about 8 years.

 

[gsxr1100]

I do not know if listed every electric or heater device will help since you do not know the efficiency of each and the price for the fuel. The water heater could use a lot or not. Do you do 4 loads of clothes of 15 each week? Your microwave could be a 600 watt or a 2000 watt. Same with every device listed. Also each states rates of electrons is different, same with NG. Right off the bat look at comparing each other Kw and not products you use. NG has different rates for the product, transportation, distribution etc etc,

Some areas yes it is worth it and some are not. I know around here (in my state), try selling an all electric home is next to impossible. No one will touch it. I had oil and get rid of that since oil is more expensive around here. I know around here NG in homes is a huge selling point as is sewer lines.

Example: I compared my kW rates to my friends down the street from me. He thinks 75 F is cool in the summer for his AC and 65 is warm in the winter. Never mind not using the electric dryer since $80 is a lot of power (electric) per month. For me I will throw in a few hours at work to sleep in cool weather and clothes that are soft. Then again more efficient cost more money but you need them long term to make the delta in money back.

 

[Tom_Trees]

Is this NIPSCO?

I was quoted $2,700 to run the line 650 feet down the road to my place when I built the house. The engineer who did the work said this would be spread over 3 years and I had a choice of monthly or annual settlement -- and I should do annual.

Seems this was actually a minimum usage fee -- if I went monthly, any month I used less than $75 I'd be billed for the difference; if I used more than $75, I'd get credit only for the $75 for the month. On an annual settlement, if I used less than $900 I'd get billed for the difference.

I went with it, and the gas company ended up extending from my place to another subdivision before the year was up and my contract was voided.

So check to see if this is a minimum usage charge, and how many years you'll get to spread it over. And go annual if possible.

Tom

 

[Mrwurm]

Thanks folks, here's the latest.

I have tried to get additional details from the gas company but all I've learned is that they charge $7.35 per foot. I still need more details like the total run and where they intend to run the line on my property.

As for conversion cost, I am willing to replace my 12 yr old propane jetted water heater with a natural gas model if necessary. The only other gas appliance is the furnace. I hope that can be re-jetted for NG.

Also, when I moved to this house about ten years ago, I was surprised at my electric cost. I was paying about $80 a month in an 1800 sq ft home. (with gas furnace) When we moved to our current home (2200 sq ft with gas furnace) our electric costs were about $125 per month and have crept up to where we pay about $180 per month. We keep the heat at 68deg in the winter and we only run A/C about five days every summer (My wife hates A/C) Our well is shallow (55 ft) with a 1/2 hp pump and we do not water our lawn. I have no idea how we use 1600 kwh per month on average.

Oh, and I have also been told that the gas company no longer rebates any fees if someone else connects to the line that I paid to install.

 

[Mrwurm]

hmm /forums/images/graemlins/confused.gif /forums/images/graemlins/frown.gif

What is a NIPSCO ?