February 2016 gas utility tariffs

The utility tariffs for February 2016 are in, and we compared them to average retail heating oil prices. The rates below are expressed in heating oil gallon equivalents, and so present gas rates on a British thermal unit equivalent basis with heating oil. These are the system expansion tariffs, which apply to all conversions from heating oil to utility gas. The lower number applies if the home is within 150 feet of the gas main ("on main"), and the higher number applies if the home is more than 100 feet from the gas main ("off main").

Eversource: On Main: $1.84/gall. Off Main: $2.07/gall.

CNG: On Main: $1.58/gall. Off Main: $1.76/gall.

SCG On Main: $1.72/gall. Off Main: $1.90/gall.

The February rates are down slightly from January for Eversource and up slightly for CNG and SCG, but gas rates have not fallen in recent months as quickly as heating oil rates have. In their weekly survey of heating oil prices, the most recent figures, from Feb. 2, show a statewide average of $1.95 for heating oil (here). There is wide variation from county to county. For example, the county average for Fairfield is $2.16/gall. while the county average for New London is $1.76/gall.

How do you use this information with customers? Letís say youíre in the CNG utility area, and your average price is, for illustration purposes only, $1.95/gall. The utility conversion rate for SCG off-main conversions is $1.90. So you customer ďsavesĒ 5 cents per gallon by converting. True, but now look at the payback period. It will cost, letís say, $7500 to convert to gas. Assuming the customer burns 700 gall per year, then converting saves him 5 cents per gallon or $35 per year, using todayís rates. At a $35/year savings, itíll take over 214 years to recoup his $7500 cost of conversion. Considering that a consumer survey we conducted shows consumers think their payback for conversion is less than five years, this long of a payback is a nonstarter. If youíre in the Yankee Gas (Eversource) territory, then your average price may actually be less than their $2.07 off-main conversion rate, which means the customer loses money by converting, and will never recoup their cost of conversion based on these rates.