Comparing Heating Costs - Natural Gas Vs. Propane

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Date: 
2004
Volume: 
16
Number: 
3
Tip Category: 
Heating systems

With the deregulation of the natural gas industry in many states it has become increasingly difficult to compare the cost of heating a house with natural gas vs. propane. For the most part propane pricing is fairly straightforward. A producer is given a per gallon price that is either fixed or that will vary throughout the year based on market rates and possibly usage. Natural gas pricing on the other hand can be quite involved. First, a producer is charged a per therm of gas used (1 therm = 100,000 Btu’s of heat) which like propane can be fixed or float with market rates. Then there are gas company charges, pipeline capacity charges and gas marketer charges. All of which can vary significantly depending on the gas company the producer is supplied by, usage, pricing plan, as well as other factors.