Heating Fuel Prices to Decline, Making It A Great Time to Fill Your Tank

May 29, 2014

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Tuesday, May 27, 2014, and found the current statewide average cash price for No. 2 heating oil was $3.54 per gallon, down an additional four cents from earlier this month. The average statewide price for kerosene also decreased five cents in the last three weeks, to $4.01 per gallon. Propane prices also continue their decline; the average statewide price for propane (for heating customers) is now $2.93 per gallon, a drop of 11 cents per gallon over the last three weeks. Last year at this time, heating oil averaged $3.42 per gallon; kerosene, $3.85, and propane, $2.71.

The Governor’s Energy Office continues its focus on home heating efficiency; this week our focus is propane fueled heating systems.

Propane prices rose quite sharply this winter, as higher demand competed for unusually tight supplies all over the Northeast and Midwest. These market conditions left propane heating customers scrambling to find product, and paying significantly more for that propane than they did last year. As propane stocks in both New England and the Midwest begin to recover from this tight supply situation, and as propane customers begin their preparations for next winter, the off-season is a great time to look for ways to save money using propane.

The easiest way to spend less money on propane is to buy less. Aside from the obvious turn-down-the-thermostat technique, using less can be achieved through increased heating system efficiency. According to the Energy Information Administration (EIA), the average propane furnace has an annual fuel utilization efficiency (AFUE) of 78. AFUE is a rating that measures an appliance’s heat output in British thermal units (Btu) per 100 Btu of fuel input. According to the EIA, a gallon of propane has a heat content of around 91,000 Btu. This means that an average propane furnace, one with an AFUE of 78, would produce around 71,000 Btu of heat with one gallon of propane, a loss of about 20,000 Btu due to system inefficiency.

Luckily for propane customers, furnaces and boilers with well above average efficiency are readily available. In fact, the most efficient propane furnaces on the market operate at nearly 100% efficiency, with an AFUE rating of 97.39, according to ENERGY-STAR. The average propane heating customer uses around 900 gallons of propane per heating season. By switching from a furnace of average efficiency to one of the more efficient systems, this customer could produce the same amount of heat with approximately 165 fewer gallons of propane. At this season’s average price of $3.10 per gallon, customers could have over $500 by switching to a high-efficiency system.

For more information on high-efficiency propane furnaces, visit: http://www.energystar.gov/ And, to learn about financial incentives available for converting to a more efficient propane system, as well as other energy efficient measures, please visit: http://www.efficiencymaine.com/at-home/home-energy-savings-program/hesp-incentives/

Using this week’s average heating oil price ($3.54) and converting to a common heating unit value (million Btu), the price of fuel oil is $25.52. This compares with an equivalent heating unit value for natural gas of $15.70 (at $1.57/therm); propane, $32.08 (at $2.93/gallon); kerosene $29.70 (at $4.01/gallon); wood pellets, $14.67 (at $242/ton); cord wood, $11.36 (at $250/cord) and electricity, $43.96 (at 15 cents per kwh).

These fuel-only prices do not take into account the type of heating system, nor its efficiency. For example, the electricity cost is for traditional baseboard heat. Other electric heating technologies, such as heat pumps and electric thermal storage (ETS), may offer consumers energy savings. Cold climate heat pumps, a recent technological advancement, are much more efficient than baseboard electric heat, so total energy costs are lower than many other types of heating fuels. ETS offers savings by utilizing off-peak electric rates, available in many areas of the state.

The Energy Office has a calculator on its web site that allows consumers to obtain more detailed estimates of home heating costs, and the price impacts of various types of fuel, heating systems and heating appliances. Heating costs vary considerably from home to home. The home heating calculator can assist homeowners in finding the best heating option for their home, location, lifestyle, and budget http://www.maine.gov/energy/index.html .

As of May 26, 2014


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.54

3.49

3.56

3.57

3.50

3.63

High

3.83

3.83

3.70

3.69

3.60

3.70

Low

3.26

3.26

3.40

3.30

3.26

3.50

Kerosene

4.01

4.01

4.03

4.02

3.98

4.04

Propane

2.93

2.95

3.07

2.98

2.85

2.69

It is important to note that the price for heating oil is a statewide average, and that prices in a given geographic region of the state may be considerably higher or lower than this average. This week, within the Energy Office sample, the highest heating oil price ($3.83) was found in one region in the state, and the lowest heating oil price ($3.26) was recorded in two regions. Also, the statewide average price for propane is based on a use of at least 900 gallons a year. Households using propane just for cooking or hot water generally pay a higher per gallon price. The table above provides current Maine cash prices in dollars rounded to the nearest penny.

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For Immediate Release

Contact:
Lisa Smith
(207) 624-7445
lisa.j.smith@maine.gov