Best Heating Value

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Natural Gas Is America’s Best Home Value When Compared to Other Energy Sources

AGA Newsroom — The American Gas Association (AGA) has announced that 2012 residential space heating and water heating costs show natural gas may cost less to use in the coming year than other major home energy sources. The comparison of cost estimates between natural gas and other fuels are based on the U.S. Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy forecast, published in the April 26, 2012 Federal Register.

“Natural gas offers tremendous value to the 177 million Americans who use it every day to heat their homes, warm their water and cook their food, and this forecast underscores the reality of that in dollars and cents” said Dave McCurdy, president and CEO of AGA. “At at time when prices at the pump are rising and many are still struggling, natural gas is a bright spot bringing consumers real savings.”

A piece of equipment with a higher annual fuel utilization efficiency (AFUE) rating provides greater savings for customers. For example, a 96 percent AFUE natural gas furnace provides the lowest-cost space heating option for homeowners, followed by an 80 percent AFUE natural gas furnace. Both offer significant annual operating cost savings over comparable space heating options.

See below for a table listing estimated home-heating and water-heating cost comparisons.

SPACE HEATING ANAYLSIS SUMMARY: The space heating analysis is based on a 2,072 square foot house located in St. Louis and represents a 5,000 Heating Degree Day location. The house meets the energy conservation provisions in the 2012 International Residential Code and the space heating equipment is selected from the AHRI online directory. The 96% AFUE natural gas furnace provides the lowest annual operating cost followed by the 80% AFUE gas furnace.

(Annual operating cost)

Heating Equipment Type  5000 Heating Degree Days
96% AFUE Gas Furnace  $522
80% AFUE Gas Furnace  $657
7.7 HSPF Electric Heat Pump  $906
96% AFUE Propane Furnace  $1,376
85% AFUE Oil Furnace  $1,654
80% AFUE Propane Furnace  $1,682
80% AFUE Oil Furnace  $1,723
Electric Resistance Furnace  $1,725
WATER HEATER ANALYSIS SUMMARY: The water heater analysis is based on the equivalent First Hour Rating (FHR), national average energy usage, and the 2012 energy costs as published by DOE. A natural gas 40-gallon and an electric 50-gallon, both conventional storage types, are chosen based on their FHR. The natural gas water heater would provide the lowest annual operating cost.

(Annual operating cost)

Water Heater Type  Annual Cost
 40 Gallon Natural Gas (FHR = 74 gallons)  $252
 50 Gallon Electric (FHR = 67 gallons)  $550
COMBINATION SPACE HEATING AND WATER HEATER INSTALLAITON: Based on the annual cost analysis for space heating and water heaters, the combination of a natural gas 96% AFUE furnace and storage water heater provides the lowest operating cost space/water heating package.

(Annual operating cost)

 Space Heating/Water Heating Type  Annual Cost
 Natural Gas: 96% AFUE Furnace & Water Heater  $774
 Natural Gas: 80% AFUE & Water Heater  $909
 Electric: Heat Pump & Water Heater  $1,456


The American Gas Association, founded in 1918, represents more than 200 local energy companies that deliver clean natural gas throughout the United States. There are more than 71 million residential, commercial and industrial natural gas customers in the U.S., of which 92 percent — more than 65 million customers — receive their gas from AGA members. Today, natural gas meets almost one-fourth of the United States’ energy needs.

Source: AGA website

In the event of an emergency, please call our emergency response line 24 hours a day at 866-261-5525