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Consumers have varied preferences, options when it comes to heating

October 7, 2012
By AMANDA MAY METZGER , The Leader Herald

Wood pellets, coal, oil or natural gas - it's all a matter of heating preference. For some, the convenience of oil and natural gas are important. Others are turning to wood pellet heat or coal to keep costs down.

Many customers this year also are opting for space heating by installing a stove in the living space of the home.

Natural gas

Article Photos

Mark Van Valkenburgh, co-owner of Home Heating Headquarters of Johnstown, pours pellets into a pellet stove in the showroom on Friday. (The Leader-Herald/Bill Trojan)

This year, National Grid is projecting its customers will see their total natural gas bill drop about 3 percent from the November to March heating season.

The typical National Grid residential customer uses about 711 therms for the heating season and would pay about $644, which is $21 less than last year for 711 therms, according to a news release from the company.

"We are encouraged by what we are forecasting for the coming winter season. This year's forecast is the lowest it has been in more than eight years when 711 therms of usage would have resulted in a bill of nearly $775," National Grid Director of Customer and Community Management Melanie Littlejohn said in a news release.

National Grid Spokesman Patrick Stella said because the price of natural gas went down last year, and the weather was warmer, customers spent about 27 percent less than they did the year before on heating their homes.

In 2010-2011, a typical customer who used 711 therms paid about $756 during the heating season, whereas in 2011-2012, customers who used 711 therms paid about $665, Stella said.

"About half of that [savings] was commodity [related], the other half was because of the warmer weather," Stella said. "There's a very healthy amount of natural gas right now."

If a major storm damages gas supply lines, that might change the forecast for pricing, "but our forecast without any catastrophic event is usually pretty close," Stella said. "If you look at it over a two-year period, it's about a 15 percent decrease from two years ago.

The choice to go with natural gas is a personal one for each customer, Stella said, but he added that it burns cleaner than oil.

"A typical customer that converts from oil to gas saves enough CO2 that equates to 15 cars being taken off the road," he said. "It's cleaner and a little bit cheaper."

National Grid purchases natural gas in the wholesale markets, and the company says it passes the fuel along to the customer with no mark up.

National Grid's delivery price per unit will not change this winter, according to the news release.

A combination of market prices, actual natural gas usage and weather conditions determines a customers ultimate bill, according to the news release.

When analyzing National Grid heating bill, customers should note two components: one is the delivery portion of the bill that accounts for the cost of bringing the gas directly to the customer, maintain a local gas network and provide emergency response and customer service.

According to a news release from the company, natural gas can increase energy efficiency by up to 30 percent compared to some other sources.

National Grid offers a number of gas efficiency programs that include incentives for installation of high-efficient, space heating and water heating equipment.

Rebates are available for energy star-rated programmable thermostats. Visit www.nationalgridus.com for more information on efficiency incentives.

Low-sulfur heating oil

According to the state Energy Research and Development Authority, average home heating oil prices in the state are up 8.1 percent over last year at this time, rising from $3.77 per gallon to $4.08 per gallon.

In the Capital District Region the average cost of home heating oil is $3.95 per gallon. That's up 8.7 percent from last year's $3.64 per gallon.

Those figures from NYSERDA were reported Oct. 1. In the capital region, the price of a gallon of oil fell during the summer and was down from 3.7 percent to 1.7 percent from June to July over the previous year.

Many companies in Fulton, Hamilton and Montgomery counties are pricing their oil less than the Capital District region average.

According to Gretchen Smith, who co-owns Smith & Sons Fuels in Mayfield with her husband Jeffrey, many oil customers prefer that fuel because it's convenient.

"It's maintenance free, other than having to have your furnace cleaned," she said.

Oil customers don't need to reload pellets or coal into stoves and can simply adjust a thermostat to keep their homes at their chosen temperature, she said.

Oil also burns more efficiently than propane at one gallon of home heating oil to 1.4 gallons of propane, Smith said.

No. 2 heating oil in this state also has an ultra-low sulfur content due to recent state regulations, she said.

"It's a cleaner burning fuel [than before] and better for the environment," she said. "It's more efficient, too."

Smith said she's heard several different predictions of what oil will do, but doesn't like to make those predictions herself.

"I never like to make predictions. I've heard some people say it goes down before or after the election. I just try to tell people it's market value and world events can affect the prices. It's supply and demand. The colder it gets, the more people start to want it so the price [may] increase," she said.

According to the U.S. Energy Information Administration, heating oil cost can be influenced by the season since prices may gradually rise during winter months, but fall during the rest of the year. Also, the cost of crude oil affects prices, and that is determined by worldwide demand, supply influenced by the Organization of Petroleum Exporting Countries, as well as other factors, according to the EIA.

Crude oil is separated into gasoline, jet fuel, kerosene, heating oil, lubricating oil and diesel at refiners. Heating oil is a distillate, and approximately 12 gallons of distillate are produced from each 42-gallon barrel of crude oil, according to the EIA. Of the 12 gallons, less than two are heating oil and the rest is diesel fuel. Also, heating oil is identified by its dyed red color - a requirement of the Internal Revenue Service to mark that the fuel cannot be legally used as highway diesel.

A number of local companies deliver ultra-low sulfur heating oil that is used for heating the home and hot water tanks. Many local companies also accept the state's Home Energy Assistance Program to help with payment.

Heating oil users can have their tank filled in late summer for lower prices. Many companies also have budget plans available to help keep the monthly bill steady, according to the EIA.

Competition between local suppliers can also influence the cost, as can geography since the cost of transporting the product to remote locations may influence the cost to consumer, according to the EIA.

"If refiners, wholesalers, dealers and consumers have enough heating oil in storage and temperatures do not drop rapidly, prices hold fairly steady," according to the EIA's website.

If there is a sudden drop in temperature, however, that can affect both supply and demand, "people want more fuel at the same time that harbors and rivers are frozen or delivery systems are interrupted," according to the website.

Biofuels and coal

Home Heating Headquarters in Johnstown Co-Owner Mark Van Valkenburgh said about 80 percent of the company's sales has steadily been wood-pellet stoves over the years. Customers have many options in brands and types of stoves and even different wood pellets. As a very general estimate, he said the price of switching a typical home over to a biofuel or coal stove might cost between $3,000 to $5,000.

Customers see a return on that investment over two-to-three years.

"Most people who are going to a pellet stove have oil, electric or propane," Van Valkenburgh said. "These folks are saying they're saving half their heating expenses."

The corn fuel fad has largely died down, he said, since the midwest drought has made corn an expensive commodity.

Wood pellets sell on average from about $229 to $265 per ton depending on the type, VanValkenburgh said. There are hard and soft wood pellets, plus blends of both. Some produce more ash and have higher BTU counts.

But like oil, it's usually cheaper to purchase pellets in the spring, Van Valkenburgh said.

Coal is running about $289 per ton.

"Coal is the nation's cheapest source of heat," he said. "A lot of people think of coal as being dirty, but it's much cleaner now."

Also, coal stoves can run without power, he noted.

The company offers free home estimates to see if space heating - installing a stove in the living area to heat the home - will work for a customer's house.

On average, space heating is 20 to 40 percent cheaper than central heating, VanValkenburgh said. Many customers are also opting for outdoor wood boilers. Wood boilers today have 18 foot chimneys, from the base to the top.

To operate a wood boiler, the property must have a 100 foot setback from residential areas and 200 foot setback from commercial areas.

"We still can put them in, depending on the town ordinance," he said.

In addition, the modern wood boiler reburns its smoke, which can burn up to 2,000 degrees. The wood fire burns anywhere from 400 to 800 degrees, he said.

"Instead of wasting all that smoke, they're utilizing it now," he said. These can cost $10,000 or more depending on the unit.

Josh Mormile, who owns Sacandaga Stove and Chimney in Johnstown, and whose family operates Adirondack Fireplace in Amsterdam, said sales of pellet stoves this year are up by about 30 percent. He said coal stove sales have jumped about 50 percent over last year.

"People save anywhere from 33 percent to 60 percent depending on how big their house is and what temperature they like it. We typically see most people cut [their costs] right in half," Mormile said.

Many people also use pellet stoves as a primary source of heat but keep oil and gas as backups.

He said an early buy option on pellets offered in April or May can help customers save about $20 a ton in the spring.

"On average, if you're going to look at switching to a pellet or wood stove, it'll cost you anywhere from $1,500 to $3,500 depending on how fancy you want to get. On average, most people pay back that initial investment in two years," he said.

He said a ton of wood pellets lasts a typical customer about a month, and prices vary depending on hard or soft-wood preferences.

"A hard wood [pellet] will burn a lot cleaner so you have to clean your stove less frequently," he said.

Both Van Valkenburgh and Mormile said customers often come in and say their homes were chilly last winter because they couldn't afford to turn their heat higher than 60 degrees.

"You get the warmth and the savings out of [switching]," Van Valkenburgh said.

 
 

 

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