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Cost of Heating Homes Often Depends on Fuel Source

By Dan Goldblatt

Posted January 6, 2011

It's cold in south-central Indiana, but luckily, the cost to heat some homes is on the decline. This winter's bills could largely depend on the source of the heat.

Hoosiers primarily heat their homes with natural gas, electricity, propane, or fuel oil. While the price of electric heat has dropped slightly, the price of natural gas has dropped significantly, and fuel oil prices have risen. Vectren spokeswoman Chase Kelly says a couple factors are contributing to the fall of gas prices.

"You have a weakened economy," she explains, "and you have an increase supply that's helping to lower and stabilize gas prices."

Kelly attributes the increase of supply in the newly found gas in shale formations across the country. Much of this gas is extracted using a controversial "fracking" method of extraction, which some say can pollute nearby aquifers and releases more CO2 into the atmosphere than traditional drilling.

According to the US Department of Energy, electricity prices in Indiana on average are 9.45 cents per kilowatt hour, down from 9.59 cents a year ago. Duke Energy customers in south-central Indiana currently pay 9.3 cents per kilowatt hour for the first 300 kilowatt hours, with prices dropping as individual consumption increases.

Fuel oil though, is tied to crude oil prices, which are up significantly from a year ago. The DOE lists current fuel oil prices at $3.31 per gallon, up from $2.80 a year ago. Propane prices have also risen in the past 12 months.

Chuck Fulford of Keller Heating and Cooling in Bloomington says the most efficient way to heat a home is a new hybrid system that employs an electric heat pump with a natural gas component for extra cold temperatures.

"The hybrid is a system being looked at a lot," he says. "That's a combination where down to about 30 degrees you'll have a heat pump instead of a straight air conditioner sitting outside and you'll have a gas furnace as an air handler to blow the air through the house."

A heat pump essentially works like a reverse air conditioner, bringing warm air in and evacuating cold air.

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Cost of Heating Homes Often Depends on Fuel Source

By Dan Goldblatt

Posted January 6, 2011

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