The Joplin Globe, Joplin, MO

April 30, 2012

Natural gas is a steal, but heating-oil users are out in the cold


Akron Beacon Journal (MCT)

AKRON, Ohio — Charles and Helen Williams have seen the rapidly falling prices of natural gas.

But the couple heat their rural Copley Township, Ohio, home with a wood-burning stove and heating oil, which is essentially diesel fuel.

So while friends and relatives who heat their homes with natural gas enjoyed historically low rates this past winter, with predictions that prices will remain low, the Williamses and others who use heating oil nervously watched the price of gasoline rise.

“Thankfully, we had a mild winter, but I fill my tank normally every six weeks for $700” for a 1,800 square foot home, said Williams. In comparison, an average home paying Dominion East Ohio’s Standard Choice Offer rate in January would have paid about $115.

Heating oil use is more prevalent in the Northeast U.S. than in other parts of the country. Rural areas of Ohio that don’t have natural gas pipelines tend to heat using propane.

Terry Fleming, executive director of the Ohio Petroleum Council, said he knows a lot of people in rural areas in the same circumstance as the Williamses. Several people he knows have both heating oil and propane setups and go with the cheapest fuel at the time.

With prices of diesel fuel as high as they are, “Boy, if it was me, I’d go to propane real quick,” Fleming said.

But similarly, propane prices, which are also tied to oil prices, have also increased. So homeowners who heat with propane are also paying higher prices than in years past, but not as high as heating oil, said Thomas Kuhn, president of the Ohio Propane Gas Association.

“There’s nothing cheaper than natural gas, unless someone is giving you free firewood,” said Kuhn, who added that 10 to 15 years ago, heating oil used to be the better deal over propane. Now propane is the better deal, though still higher than natural gas, and its prices have increased in recent years. While the same ductwork could probably be used, changing from heating oil to propane would require a new furnace and propane lines buried in the yard from the propane tank, he said.

A few months ago, Charles Williams decided to look into getting natural gas pipelines extended approximately 1,200 feet from a road to his home and four others, which sit at the end of a small public street.

The homes were built in the 1930s, and Williams’ family has been in the homes for 55 years. Williams owns two lots, and his 81-year-old mother lives in one of the other homes.

Williams said he had a number of confusing calls with local utility company Dominion. He realized the cost of putting in a natural gas pipeline was prohibitively high and included a price increase for the one-time, per-foot charge for mainline extensions that occurred after March 15 — to $17.15 per foot. With the 1,200-foot distance, even with a 100-foot credit per household, it would cost the four homeowners nearly $14,000 to get gas lines to their homes. That’s before any costs to retrofit their homes for natural gas use and new appliances.

Williams said he debated the idea, but thought the cost was too high for him and his neighbors.

His mother said “that would be a godsend to get a gas line up here and get us something we can afford. It’s getting harder and harder and harder. It’s so unfortunate that this area is the poor part of Copley,” said Williams.

The Williamses say they are frustrated the costs are so high to extend the lines.

Dominion spokesman Neil Durbin said the utility charges to extend lines are to pay the contractor, the cost of materials and restoration.

Often, gas lines are extended into a new subdivision of homes with the developer paying the costs, looking for value in the larger number of homes that will be tying into the lines, Durbin said.

All customers receive a 100-foot credit per household, so for gas lines to be extended to a road 1,200 feet away, 12 new households would need to apply to get the line extended at no cost, Durbin said. In the next 10 years, if additional customers apply for service from the line, the initial customer who paid the deposit can receive a refund of the rate for each new customer meter, he said.

Williams said he doubts that’s a possibility for him or his neighbors. Their homes are currently zoned under what is called “open-space conservation,” which means a landowner would need nine acres to build new, he said. So they’re also worried about resale value of their homes with the high heating equipment.

“All of these years, we’ve been frustrated,” said Williams. “My dad looked into (extending gas lines) in the 1950s.”

Originally, the homes, built in the 1930s, were heated with coal.

“When I first started buying oil, it was 12 cents a gallon,” he said. Now, it’s close to $4.

“As I look into retirement in the next year or so, I’ll be on a fixed income,” said Williams, a boilermaker. “The gas prices are predicted to keep going and going (down).” And in the meantime, Williams said, gasoline and diesel prices just keep going up.

“There’s no guarantee it’ll stop at $4 (per gallon). The question becomes: Can you heat your house? Can you buy your medicines?”