Sunday, October 05, 2008

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What It Will Cost To Heat Your Home
Matt Woolsey10.03.08, 4:33 PM ET

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Buffalo, N.Y., gets cold during the winter. Really cold. Just ask any Bills fan who has attended a home football game. The average low temperature during the months of January and February is 16 degrees Fahrenheit. Boston, at the same latitude, posts average lows of 23 degrees during that time.

Yet the typical Buffalo family will spend $333 less to heat a home this year than families in Boston do. In fact, Buffalo residents will likely spend less this winter than those in Washington, D.C., who right now are complaining about the oppressive heat in the Potomac River Valley.

Why? The need for heat depends on temperature, of course. But local prices, inventories, refining capacity and choice of heat also play a role. Eight-eight percent of Buffalonians use natural gas; this is the most efficient and least volatile energy source available. Only 2% of residents use more expensive heating oil, compared with 36% of Bostonians.

Other spots feeling the heat include Minneapolis, Boston, New York and Philadelphia. All rely heavily on natural gas and heating oil, which are up 7% and 38%, respectively, this year, according to the U.S. Department of Energy.

Behind the Numbers 
The department supplied, for this story, 12-month projections for the local costs of heating oil, electricity, propane and natural gas, the four most popular heat sources in America. To determine our list, we examined the country's 40 largest U.S. Census-designated metro areas, singled out 20 based on size and geographical representation, then calculated how much an average family of four with a 2,100-square-foot house would spend each month to heat its home.

Energy demand figures came from 10 years of National Weather Service data on what are called "heating degree days." The index measures daily temperature and power demand and points to how much colder the outside temperature is than a room temperature of 65 degrees Fahrenheit. This makes a difference, because it takes more energy to heat a home on a five-degree day than on a 45-degree one. The colder the day, the more British thermal units (BTU) of heat are required.

As you might expect Minneapolis, Buffalo and Detroit had the coldest climates of the cities we measured. But heating bills in those cities don't necessarily reflect that.

That's because not all heating sources are created equally. On a dollars per BTU level, natural gas is more efficient than electricity, heating oil or propane. Midwesterners are much more likely to heat their homes with natural gas. As a result, in Chicago, where 90% of homeowners use natural gas, the average monthly heating bill is less than in Baltimore, a far warmer spot where only 46% of homeowners rely on natural gas. Like their neighbors in Washington, D.C., Baltimore residents rely heavily for their heating needs on electricity, a less efficient energy source on a dollar for dollar level.

So why don't all cities switch to natural gas? Installing new heating systems can cost thousands of dollars, for one. Also, prices for heating products vary regionally. In Boston, 1,000 cubic feet of natural gas costs $17.60, compared with $13.02 in Minneapolis. At those prices, if all Bostonians switched to natural gas, they'd save $622 a year on average, which, while good, doesn't seem enough to motivate large-scale change.

Of course, if oil drops to $60 a barrel, as some analysts are projecting, Bostonians will look pretty smart for not throwing out their oil heaters.

1. Boston, Mass.

Average monthly heating cost: $1,924
Residents using heating oil: 35%
Residents using natural gas: 47%
Residents using propane: 3%
Residents using electricity: 12%

Combine the cold weather of the Northeast with the nation's highest share of homes that use heating oil, and it's easy to see why Boston tops this list. As the price of oil continues to rise, it's hard to imagine relief coming anytime soon.

2. Minneapolis, Minn.

Average monthly heating cost: $1,643
Residents using heating oil: 1%
Residents using natural gas: 82%
Residents using propane: 3%
Residents using electricity: 10%

Based on projected weather patterns and forecasts, Minneapolis residents are expected to use the most energy in any city measured to heat their homes during the winter. Fortunately, natural gas is relatively cheap, and the vast majority of residents use it.

3. Washington, D.C.

Average monthly heating cost: $1,609
Residents using heating oil: 6%
Residents using natural gas: 54%
Residents using propane: 2%
Residents using electricity: 36%

Coming in third, despite a score on the heating degree days index that's about half that of Minneapolis, the District of Columbia has a startlingly high share of homes using electric heat, the least efficient form of heating on a cost basis.

4. Buffalo, N.Y.

Average monthly heating cost: $1,591
Residents using heating oil: 2%
Residents using natural gas: 88%
Residents using propane: 2%
Residents using electricity: 5%

Winters in Buffalo are cold; there's no way around it. Costs for heating a home in the city aren't as high as you might expect, however. Due to the share of more energy-efficient, natural gas-heated homes, Buffalo residents spend less on winter heat than the weather would suggest.

5. Philadelphia, Pa.

Average monthly heating cost: $1,574
Residents using heating oil: 19%
Residents using natural gas: 60%
Residents using propane: 3%
Residents using electricity: 16 %

More of the same for the East Coast. High-priced utilities and a large number of homes that depend on heating oil drive up the price of heating in what can be a very cold city. A high share of natural gas users keeps the prices a bit lower than in some regional counterparts.

6. Baltimore, Md.

Average monthly heating cost: $1,568
Residents using heating oil: 14%
Residents using natural gas: 46%
Residents using propane: 3%
Residents using electricity: 35%

Like Washington, D.C., Baltimore residents rely heavily on electricity for heating purposes. The cost of electricity, relative to how many British thermal units of heat it can generate, makes this expensive.

7. New York, N.Y.

Average monthly heating cost: $1,513
Residents using heating oil: 32%
Residents using natural gas: 56%
Residents using propane: 1%
Residents using electricity: 8%

New York heating figures are always a little skewed. This study was conducted based on a 2,100-square-foot house--good luck finding many of those in Manhattan. In nominal terms, New Yorkers spend less on heating than do households nationwide, but the city's rates per cubic foot are still quite high.

8. Seattle, Wash.

Average monthly heating cost: $1,382
Residents using heating oil: 4%
Residents using natural gas: 42%
Residents using propane: 2%
Residents using electricity: 47%

While it may rain quite a bit, temperatures in Seattle aren't as cold as in many Northern or Northeastern cities. Residents would pay far cheaper heating bills if almost half of them didn't heat their homes with electricity.

9. Portland, Ore.

Average monthly heating cost: $1,313
Residents using heating oil: 4%
Residents using natural gas: 45%
Residents using propane: 1%
Residents using electricity: 44%

Portland's energy-use share and the costs are almost identical to Seattle's. But slightly more Portland residents use natural gas and slightly fewer use electricity to heat their homes during the winter. Combine that with a slightly more southern location, and heating prices are just below its northern neighbor.

10. Cleveland, Ohio

Average monthly heating cost: $1,232
Residents using heating oil: 2%
Residents using natural gas: 83%
Residents using propane: 1%
Residents using electricity: 11%

Though their yearly heating cost isn't cheap, Cleveland residents seem to shun electric heat, propane and heating oil, keeping prices lower than the climate might suggest. Local natural gas prices are below national averages.

11. Detroit, Mich.

Average monthly heating cost: $1,214
Residents using heating oil: 0.6%
Residents using natural gas: 90%
Residents using propane: 3%
Residents using electricity: 5%

Second only to Minneapolis in terms of how much energy it takes to keep a house warm in the wintertime, Detroit relies on the nation's highest share of homes with natural gas heat, and low regional prices, to sink this low on the list, despite cold winters.

12. Denver, Colo.

Average monthly heating cost: $1,176
Residents using heating oil: 0.1%
Residents using natural gas: 80%
Residents using propane: 2%
Residents using electricity: 16%

It's a mile high, there are winter blizzards and the thermostat can drop dangerously low. Yet Denver residents feel less of a sting--relative to their winter heating bills--than other cities around the country. Thank low regional prices and a high share of homes with natural gas heat.

13. St. Louis, Mo.

Average monthly heating cost: $1,146
Residents using heating oil: 0.6%
Residents using natural gas: 68%
Residents using propane: 5%
Residents using electricity: 24%

Midwestern utilities generally offer natural gas more than heating oil, and this translates to lower natural gas prices due to higher capacity. In St. Louis, almost no one relies on heating oil, though high electricity-consumption costs households quite a bit.

14. Chicago, Ill.

Average monthly heating cost: $979
Residents using heating oil: 0.3%
Residents using natural gas: 88%
Residents using propane: 1%
Residents using electricity: 9%

It can become brutally cold in Chicago, and it can stay that way for long stretches. Yet the city's disproportionately high reliance on natural gas helps keep residents' costs below what you would expect, given the weather.

15. Atlanta, Ga.

Average monthly heating cost: $780
Residents using heating oil: 0.2%
Residents using natural gas: 64%
Residents using propane: 3.5%
Residents using electricity: 30.4%

Atlanta may have a well-deserved reputation as a hot place, but in the wintertime temperatures can dip pretty low--at least compared with the other Southern cities on this list. Still, nearly a third of Atlanta homeowners use electric heating, and that adds up.

16. San Francisco, Calif.

Average monthly heating cost: $622
Residents using heating oil: 0.1%
Residents using natural gas: 72%
Residents using propane: 1%
Residents using electricity: 23%

Though it may be in California, San Francisco experiences micro-climates that can send temperatures to near freezing. Nonetheless, the overwhelming majority of residents rely on relatively cheap natural gas for heating, landing the City by the Bay at No. 16 on our list.

17. Houston, Texas

Average monthly heating cost: $616
Residents using heating oil: 0.05%
Residents using natural gas: 45%
Residents using propane: 2%
Residents using electricity: 50%

Anyone who has ever been to or lived in Houston can tell you that it just doesn't get that cold. In fact, there is a distinct possibility that some of the electricity used during the winter months goes to air conditioning. The dip below $500 in heating costs is surely a welcome relief from the cost to cool a Houston home during the summer.


18. Phoenix, Ariz.

Average monthly heating cost: $510
Residents using heating oil: 0.04%
Residents using natural gas: 29%
Residents using propane: 1%
Residents using electricity: 68%

At this point in the list, the reason for a high share of electric heaters--the least efficient on a per-dollar basis--has to do with climate. There isn't much justification, when you live in a warm place, to invest in a natural gas or heating oil system.

19. Los Angeles, Calif.

Average monthly heating cost: $246
Residents using heating oil: 0.07%
Residents using natural gas: 72%
Residents using propane: 1%
Residents using electricity: 21%

When you think of Los Angeles, you imagine warm days, beaches and palm trees blowing in the breeze. Still, it can get pretty cold at night during the winter. The city's low heating bills are a credit to Angelinos employing natural gas heaters.

20. Miami, Fla

Average monthly heating cost: $77
Residents using heating oil: 0.1%
Residents using natural gas: 2%
Residents using propane: 0.5%
Residents using electricity: 94%

Of the cities we measured, Miami is the farthest south. Combine that with proximity to the Gulf Stream, and it's easy to understand why residents in South Florida pay so little for heating. It just doesn't dip below 65 degrees that frequently.


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