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New to NG, please look over my numbers...

Post in 'It's a Gas!' started by Wet1, Nov 17, 2008.

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  1. Wet1

    Wet1 Minister of Fire

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    I just converted over to NG and have yet to receive my first bill. I just checked my gas company's website to see what gas is going for and also to see what it costs when compared to oil. Here is the current pricing through my gas company:
    http://www.soconngas.com/MediaLibrary/2/3/Content Management/SCG/Your Business/PDFs and Docs/Rate RSH.pdf

    "RATE PER MONTH:
    (Ccf 100 cubic feet)
    (a) Delivery Service:
    Customer Charge: $13.00

    Delivery Charge:
    First 30 Ccf : $0.9489 Per Ccf
    Over 30 Ccf : $0.3474 Per Ccf

    Sales Services Charge: $0.0363 Per Ccf"

    Now assuming 1 CF (Cubic Feet) of NG = Approximately 1,000 BTUs, 1 CCF = 100 CF = 1 Therm, and that one gal. of #2 oil has 139,000 btu. This means it takes 139 cu ft of NG to equal 1 gal. of #2 oil. So 139 cu ft = 1.39 CCF = 1 gal. of #2 oil, correct?

    So if I've historically used say 500 gal. of #2 per year for heating/DHW (and that my boiler efficiencies are unchanged), based on the above number this is equal to about 695 CCF of NG, correct? So assuming NG prices were fixed for the year (I know this is a poor assumption) and that I used a full 30 CCF each month of the year, are my figures bellow correct?
    ($13 x 12mo)+(30 CCF x 12mo x ($0.9489 + $0.0363)) = $510.67 for the first 360 CCF (or equivalent to 259 gal. of #2 oil). The remaining 335 CCF I use over the course of the year should cost me: (335 x ($0.3474 + $0.0363)) = $128.54. So I'm coming up with a yearly total of only $639.20 for the equivalent of 500 gal. of home heating oil. This seems very cheap, have a made a mistake somewhere??? If my math is correct, this works out to the equivalent to $1.28/gal. of #2 heating oil. Can this be correct?

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  2. brogsie

    brogsie Feeling the Heat

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  3. webbie

    webbie Seasoned Moderator Staff Member

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    That sure looks close.
    I try to simplify it - the total per therm delivered price is likely to be about $1.70 for me here (in Ma) this year. It could be less, as NG prices have fallen.

    So that is about the equiv. of $2.30 cents for a gallon of heating oil (1.4 x factor) or less. Being as my gas equipment is very efficient (90%), that is probably similar to heating oil at $2.00.

    NG, in general, is a very effective and reasonably priced fuel. Clean, also....compared to other fossil fuels.
  4. Wet1

    Wet1 Minister of Fire

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    When I made the decision to switch over to NG (many of your posts strongly influenced me) it made sense to do so because oil was spiking out of control. Over the last few weeks as I completed the work, I had been a little irritated seeing oil getting back to reasonable rates. I pretty much thought I spent about $4500 doing this conversion for nothing, other than getting off oil, which feels good in itself... but probably not worth the money I spent to convert. I did not realize until yesterday that NG prices had dropped so much as well, a very welcome surprise indeed!

    Anyway, thanks for looking over my numbers Craig. I thought I had made an error somewhere as the yearly $ amount seemed low (a good problem to have). I used your $1.70 price as a ballpark figure when I initially ran the numbers to justify this project, but I just wanted to get a better idea where everything stood today. I crunched the numbers on our DHW needs last night and it appears I won't be using anywhere near 30 CCF (therms) to heat water on a monthly basis, so the rough yearly calculation I ran above will likely be on the high side since a higher percentage of my gas usage will be at the significantly lower rate my gas company uses after the first (monthly) 30 CCF. Again, another welcome surprise.

    I've set myself up so I have the option to heat with my choice of several different sources (see my signature). As I mentioned above, I ran the numbers for gas verses electric DHW last night and it was about 1/4 the price for me to run the gas... a no brainer. The pellets I bought this year at $205 delivered appear to be more expensive as well, which I didn't think would be the case last spring when I ordered them. I guess I won't be burning too many pellets this year. Even though I enjoy processing wood, it's hardly worth doing so based on today's NG prices. It looks like I'll be saving my wood/pellets for when prices rise again, and I'm sure they will in time...
  5. Redox

    Redox Minister of Fire

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    That's a heck of a discount for using over 30 cf. I wish we could get the same here.

    Oil has dropped off so much that gasoline is now comparable to NG. I don't think I'll be converting the furnace to gasoline, though... :coolcheese:

    Chris
  6. Wet1

    Wet1 Minister of Fire

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    I thought the same thing (not that I'm complaining), that's why I asked you guys to look over the numbers. If I'm reading this correct, after the first 30CCF of usage per month, this works out to be about the equivalent to $0.53 per gal. of #2 oil. Am I correct, or am I missing something??? With a pricing strategy like this, it's almost silly not to crank the heat up during the months you know you'll use more than 30 CCF!
  7. Redox

    Redox Minister of Fire

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    First off, CCF is a strange way to sell gas, as the heat content varies throughout the year. Our utility corrects for the heat content and bills per therm or 100,000 BTU which translates to roughly 100 CF or 1 CCF. It may be splitting hairs, but it does matter a bit, and is probably working in your favor as heat content is generally over 1000 BTU/CF. Our gas varies between 1040 and 1100 BTU/CF depending on how much LNG they are mixing in.

    Right now, NG is selling for about $0.65/therm on the wholesale level (Henry Hub price) and the utility sells it to you for a rate that is governed by your public service commission. I tried to read up on SCG's rate structure and my head began to hurt. Apparently, you have a base agreement, but are subject to a "billing factor" that varies from month to month and probably takes into account the variable heat content.

    http://soconngas.com/ForSuppliersAndPartners/References/HistoricPGA1.html

    Last month, it was $1.1113/ccf for gas heating customers, but historically has been well under $1/ccf. I tried to figure out all the applicable riders, and that's when it gets confusing. They apparently sell at a different rate if you use gas for heating and pay a penalty on non heating applications like cooking and DHW. I doubt that you have two gas meters to break it down. Then they have a "Weather Normalization Adjustment" clause that gets into some real fuzzy math:

    http://www.soconngas.com/MediaLibrary/2/3/Content Management/SCG/Your Business/PDFs and Docs/Rider WNA.pdf

    This adjusts for actual degree days and normal degree days and base load and...POOF! My head just exploded. What this means fo you is anybody's guess. It would seem that they want to keep this as confusing as the phone company's billing. Your actual bill probably cannot be calculated without a math degree and I tend to suck at math.

    It would appear that if you are going to run the gas furnace more than about 1-1/2 hours a day, you might as well save your pellets and burn gas. I can't seem to remember how much gas we used before converting to wood, but a 100,000 BTU furnace is capable of burning 30 CCF in 30 hours and I know our furnace can run for hours on end in cold weather. This probably isn't what you want to hear after investing in all the alternative appliances, but that is how it looks from this end.

    The future probably will change things and nobody would have predicted oil dropping to $50/bbl from last summer, but that's where we are, folks. CNG for your car, anyone?

    Still burning gas, one way or another,
    Chris
  8. MoeB

    MoeB New Member

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    I switched my office over to natural gas last summer with a Rinnai Continuum tankless water heater and a Rinnai wall furnace. My NG bill for October was $73.64, total usage: 48 therms.

    When trying to figure out what I was actually paying per therm, I had some problems understanding the "Customer Charge", "Energy Charge," "Transportation Charge," "Past Gas Cost Adjustment" and "MNE Recovery June 2008" charges.

    So, to keep it simple, I just divided 73.64 by 48 to get 1.53 (rounded down) per therm. It may not technically be correct, but for my checkbook purposes, I think it works.

    Is there a better way to figure this out?

    I'm looking forward to getting my other meter's gas bill for the new condensing gas furnace just installed in the house. It heats a bigger space, but I think the efficiency rating is better than on the Rinnai wall furnace. It's got a 92% efficiency rating. Any thoughts about what to expect?

    The Rinnai tankless water heater serves the house and office. I've totally kicked the oil habit. Yesterday afternoon, I missed my pellet stove in the house, so I fired that up and didn't turn it off until I went to bed. It's like an old friend. I even missed the blower noises. I have seven tons of pellets in the garage, so I think I'll burn them when I'm hanging out in the house or entertaining there. It just feels better than the hot air from the furnace. Everyone sort of gravitates to the stove, even the cats. As soon as I fired it up, they were right there beside it.

    Moe
  9. Wet1

    Wet1 Minister of Fire

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    Thanks for all your help Chris.

    I contacted Don Hannibal regarding the historic PGA info (his name was at the bottom of the chart you linked). As you stated, it looks like they are pretty much trying to confuse the hell out of the customers so they don't have a clue what they are really paying for their NG.

    Near as I can tell, it looks like SCG just redid their pricing structure this month and the residential folks that are using NG for heating are now paying more, while some others like large commercial are paying less. They increased the "base" monthly charge 60% (to $13) and this staggered delivery rate is also new. The delivery rate was a flat $0.57/ccf, but now it's $0.95 (up 66%) for the first 30ccf and then reduces down to $0.35 (down 39%) after that. I believe the $1.1113 figure in that PGA chart is also tacked on to each ccf. God only knows what other goodies are including in the billing as well. So if I add all these items up for 30ccf usage each month, it looks like it will cost about the equivalent to $3.50 oil (even more if I use <30ccf) and then after that it drops down to $2.10... urggggggh!

    I guess what all of this means to me is that they are now really sticking it to the folks who use low volumes of NG. I'm kind of pissed because these big front end hits were not in place when I signed the contract a few months ago. As a wood/pellet burner, this looks like it's going to be fairly costly for me to use minimal amounts of NG and for me to use it to heat my DHW. OTOH, as much as I hate the fixed $13 monthly fee, this appears to be a fixed cost I'm now stuck with regardless, so I don't know if I should include that in my first 30ccf calculations since I'm forced to pay it anyway...

    I guess I'll have to see how everything is broken down when I receive my first bill, but I'm not pleased with what I'm seeing so far.
  10. Redox

    Redox Minister of Fire

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    Moe's method is probably going to work the best for budgeting purposes. Just don't be surprised when the price/therm doubles in the summer. That $13 meter fee skews the result when you are only burning 15 therms a month.

    I've studied our rate structure pretty thoroughly and still can't figure out why our gas commodity price is nowhere near the wholesale price. I've never seen "market" price and yes BGE, I AM paying attention!

    Deregulation was supposed to mean that we pay market price. I guess I can't choose who my supplier is yet. You can if you are a large commercial/industrial user.

    I suspect that NG will almost always be cheaper/BTU than electric resistance, and until we perfect a wood fired engine, I'll be burning gas in everything but the furnace.

    Sorry; I'm beginning to rant. Where's my meds?

    Chris
  11. Wet1

    Wet1 Minister of Fire

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    I just received my first gas bill and the pricing appears to be just as I thought. I sent to following letter to SCG (exeutive staff, sales, and marketing). It won't do a damn thing, but at least they will know how I feel...

    "Very Unhappy New Customer!

    Over the summer when oil prices were high I decided to convert over to natural gas. Obviously oil prices have come down considerably since then, although I do not regret switching to NG for this reason. I was also okay with spending the countless thousands of dollars replacing both of my boilers (plus upgrading the indirect DOH system) to do this conversion, even though one of the two oil boilers was only a few years old.

    So why am I so unhappy? The new pricing structure that took place last month. After I had my meter installed on 11/14 I went online to confirm pricing. What I found was what appears to be major restructuring of your billing and rates for residential heating. Near as I can tell, it looks like SCG just redid the pricing structure for Nov. and the residential folks that are using NG for heating are now paying considerably more, while some others, like large commercial users, are paying less. It may be that SCG isn't making all that much more money, but it appears to be hitting the residential HO much harder. The “base” monthly charge increased 60% (to $13). This staggered delivery rate is also new. The delivery rate was a flat $0.57/ccf, but now it’s $0.95 (up 66%) for the first 30ccf and then reduces down to $0.35 (down 39%) after that. Plus the $1.11 figure in the PGA chart is also tacked on to each ccf, which is a HUGE jump compared to the previous average for 2008, which was negative ($0.79). God only knows what other goodies are including in the billing as well, as the overall billing itemization is clearly designed to baffle the customer with crazy additions and nutty formulas (such as with the WNA). So if I add all these items up for 30 CCF usage each month, it looks like it will cost about the equivalent to $3.50/ gal. in oil pricing, then it drops down to $2.10 in oil dollars for anything above 30 CCF… It would take a lot of usage to drive the cost down to a reasonable rate, which might be okay for Jan. or Feb., but works against the customer for the majority of the year. And if one uses only a fraction of 30 CCF, it gets really ugly!

    I guess what all of this means to me is that you are now really sticking it to the folks who use lower volumes of NG in the winter, and use ANY NG during the 'off-season', since residential users will not use >30 CCF in the off season. I'm very upset because these big front end hits were not in place when I signed the contract a few months ago. It will now cost me a lot of money to heat my DHW with gas throughout the year based on these huge front end hits in place for each month.

    During the month of November, I only used a little bit of NG to make sure I wasn't reading your new pricing structure incorrectly. I used 16 CCF, which is about the equivalent of 11.5 gallons of #2 heating oil (which is now around $2.05/gal., and dropping). My bill for this measly 16 CCF was a shocking $42.02. In oil pricing, that works out to $3.65 per gallon. Yet it appears under the old pricing structure my bill would have been SIGNIFICANTLY less.

    Luckily I did not toss my oil boilers and I still have my old electric DHW tank. So while I have a nice new central heating system, which I really had to pay for, I now have a nice monthly bill which should prove to be quite costly going forward, even if I hardly use gas. I can't tell you how upset I am with this latest pricing restructure. If this stays in place for the long term, I will be reinstalling my oil boilers. In the meantime, I will be using my electric DHW system and burning wood and pellets to heat the house. Crazy since I just spend countless thousands of dollars converting over to NG? Maybe, but I'd rather do this than support this crazy pricing restructuring that I did not sign up for!"
  12. Redox

    Redox Minister of Fire

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    I wouldn't expect much of a response from them.

    Yup, $2.63/ccf is exorbitant and would make me seriously reconsider converting the DHW or anything else over to NG. FWIW, I just got a bill for $72.45 for 48 therms working out to $1.50 a therm. The gas was unusually "rich" last month at 1.100 therm/ccf. Our rate structure is independent of quantity used and we burn it in the water heater, range, dryer and gas grill as well as the furnace. I try to save the furnace for really cold weather and we have heat pumps for the rest of the time.

    If you are still using a tankless coil for DHW you might want to get an electric water heater for the summer. It would probably be cheaper in the long run.

    Chris
  13. Wet1

    Wet1 Minister of Fire

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    Thanks Chris.

    I got a call the next day that was left on my machine. The marketing director called and had said that my numbers were correct, but that I'm not seeing the big picture. He said if I burn more than 80 CCF per month, it would actually cost me less. Nice spin...

    So for a few months out of the year I could save a few dollars and the remainder of the year I get hosed, unless I decided to run the heat all summer to reach that potential savings!

    I do have an electric DHW heater as well. I've been running it over the past month (cost me $42 for the month). At this point I'm probably just going to continue heating the DHW with electricity ($0.118/kwh) and heat the the house with pellets (I paid $205/ton) and wood (free). I'll just give these clowns their $13 per month until they decide to adjust their rates. Seeing how they ran the gas lines on their dime and gave me $600 in rebates for the boilers, I think it's going to take a long time before they break even on my account at $13/month!

    Fu@king A-holes! Sorry about my French, I'm just a little pissed about this rediculous pricing restructure.
  14. Wet1

    Wet1 Minister of Fire

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    I received my second gas bill yesterday. I consumed 2 CCF (the thermostat was accidentally turned on) and my total bill was $16.95... which includes the $13 monthly "customer charge". I'm really upset with myself that I even used those two CCF. Oh well, maybe next month I can get it down to a single CCF. :)
  15. trafick

    trafick Member

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    Back before I had the gas stove in the livingroom I heated with all wood a couple of winters. The only thing that was NG was the furnace. Some winters I would go all winter and not use ANY therms (CCF). They still charged me $13.11 a month for the service.

    Twice they came to the house and thought their meter wasn't working. I guess the people that had the house before me kept their heat around 80 and used ALOT of gas. One time the guy saw the pile of wood in the driveway and said "Never mind". I can't remember what happenend the second time but I do remember them sending me a letter that they were requesting me to be home on a certain date to "check" my system. I guess the point is that they are watching you!

    Aroung here gas is $1.4585 per therm delivered up to 50 therms than there is a slight discount ,1-1.5 cents per therm after that.
  16. Wet1

    Wet1 Minister of Fire

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    Well, since I just converted over to NG, they obviously have nothing to compare my usage to (unfortunately). But I hope you're right that they are watching my usage! At this rate, their WOI with me should be about 50 years... assuming I don't have them pull the meter for 6 months out of the year! Hmmmm, I wonder if they would do that??? :)
  17. Wet1

    Wet1 Minister of Fire

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    I only have my boilers and indirect DHW connected to my gas lines. As of right now, I'm using electric to heat my DHW.
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