Propane prices vary by usage

Posted Jan. 28, 2009, at 7:59 p.m.

BANGOR — Although average propane costs commonly are listed as single totals, buyers are charged per-gallon rates that differ from the volume used per year.

Propane providers use tiers of residential usage per year to determine cost. Dead River Co., for example, arranges its prices into the following tiers: up to 100 gallons, $4.38 a gallon at current prices; 101-250, $3.48 a gallon; 251-500, $2.95; 501-700, $2.65; 701-1,000, $2.45; and 1,001-1,500, $2.18.

At these rates, greater propane consumption results in smaller per-gallon charges. Other factors involved in calculating the cost of using propane to heat a home include the cost of installing a tank and changes in the annual amount of propane purchased.

According to the Governor’s Office of Energy Independence, the relationship between volume and price can be understood as a conflict of supplier profit versus delivery cost. The elevated cost to deliver smaller quantities of propane results from the provider’s costs for equipment, staff, fuel and insurance fees. Filling a 28-gallon tank at $2.45 a gallon would result in an overall deficit for the provider when expenses are tallied.

Propane, compared with other fuels, is a clean-burning, nontoxic, reliable source of heat, but may not be the consumer’s first choice for energy efficiency. According to the latest energy information census, the average home in Maine uses 138,690,000 Btu (British thermal units) of heat. The U.S. Department of Energy’s Web site lists propane’s heat production capacity at 91,333 Btu per gallon. Thus, propane could sustain the average Maine home’s energy demand with just over 1,500 gallons. In contrast, oil produces 138,000 Btu per gallon, and will fulfill the average home’s heat-ing requirements for just 1,000 gallons a year.

Oil suppliers in the Bangor area will fill a tank that burns 1,000 gallons of oil a year for around $2.45 a gallon, at present prices. A 28-gallon propane tank is filled for around $4.38 a gallon, according to prices provided by Dead River Co. and Webber Energy. Thus, consumers pay nearly twice as much money for far less propane.

Despite lower propane prices per gallon, the cost of buying 1,500 gallons of propane ($3,270) instead of 1,000 gallons of oil (around $2,400 depending on location), will leave the consumer at a net disadvantage.

Mike Shea, president and CEO of Webber Energy, pointed out in a telephone interview Wednesday that the comparison between oil and propane is complex.

“If you have a central heating situation in a house, you really want to use the fuel that provides the most Btu and has the highest efficiency in the equipment that uses the fuel. For the most part that’s still oil. Propane, however, is a good choice for people who like to cook with gas, who pre-fer to use gas for clothes dryers or other appliances, and for space heating.”

According to Shea, Mainers interested in space heating have three options: electric heating, fireplaces or propane. Propane space heaters do not require chimneys or flues, and provide efficient sources of heat that can be turned on or off depending on the consumer’s needs.

“Using propane space heaters, a person can heat the area they spend the most time in without paying to heat the entire structure,” Shea explained. “The fuel itself is more expensive, but propane is very efficient for heating smaller spaces.”

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in State