Should I install natural gas ?

Hello folks, I originally posted this at TratorByNet, but I thought maybe it would fit better on this forum.

My neighbor and I are considering an offer to connect to natural gas and get off the propane tank. A few years ago, we inquired, and were told it would cost $22,000 to bring the line about a half mile down the road to our property. (there are no other homes between us and the line, but there are some beyond us)

Since the last estimate, the line has been extended to where it is only a 1/4 mile from our properties. They did this for a subdivision that will be starting up next year. We inquired again, and now we are being quoted at $6,500 each or $13,000. This includes laying the line all the way to the house. (400 ft to my house from the road and 200 ft from his house to the road)

Actually, they said it would cost $10,000 to run it to my house and $3,000 to go the additional 200 ft to my neighbors place. My neighbor really wants this to happen and is willing to split the cost. Now that I think about it, if I did'nt hook up he'd have to pay the entire $13,000 cost himself, so we are both doing each other a favor if we split the cost.

Well, what do you think of this price ? Last year I spent $1,600 on propane, this year I pre-bought at $2,200. That comes out to $183 per month all year round. I'm running a gas furnace and hot water heater. (electric dryer)

Also, does anyone think this will raise my property value ?

Oh, and it also strikes me as funny that the gas company really does'nt seem to care if I hook up. It actually seems like I'm bothering the rep.

Jerry

Some things to consider....

This is from an "If it were me" perspective.

Is there the opportunity for additional development between you and the subdivision about to go up? if so, any idea when it might happen. The point here is to maybe work with the property owner of the "yet to be developed" parcel and see if you can't get them involved thus reducing your costs even further and giving them an additional sales point for thier land.

Have you compared the cost of natural gas vs propane in your area? sometimes there are rebates for multiple appliances which might be incentive to change to gas on some of the other things in the house.

Can you use another vendor to run the main to thier connect point? this might let you shop some.

Outside of the hassle of dealing with the propane dealer (assuming it is a hassle), with an average 20-30% increase in cost per year for the propane (based on the lone example you provided), how long will it take you to recoup the investment?

As far as property value benefits are concerned, I think you'd see more in natural appreciation than you would from the addition of natural gas. It's like a personal choice thing unless the gas cost differences justify otherwise.

Natural gas prices are about as volatile as the gas itself.

....and like most things, there are regional influences too, including the line installation.

Jerry, The typical home buyer isn't very savy as regards NG vs LPG and not much better gas vs electric so don't expect it to be a big plus in property values. Developers, of course, are best served, over all, by NG in a development since as lot size shrinks propane tanks become much more of a detracton.

Just do the math, NPV calculations if you understand them, or just plain arithmetic if you don't. In one heap put all the costs of conversion to NG. gas appliances, their orifices, and all associated regulators both outside the home as well as appliance mounted must be converted from the one fuel to another. Unfortunatley, some appliances are not convertable and must be replaced in their entirety. This must be decided on a case by case basis. For example, some gas log fireplaces I was interested in were on a closeout special at a ridiculously low price but could not be converted.

Predicting the future is tough and predicting the prices of natural gas and or propane is likewise not easy (possible?) in the short run. Over a decent period of time NG and LPG tend to track each other and average about the same percent of increase over time. This is likely to remain approximately true until or unless something truly remarkable happens. I used to have a propane only fueled truck but got rid of it a while after propane prices caught up with and passed gasoline. Boy do I wish I had it now as gasoline has outpaced propane in price increases.

Will you get a serious case of buyer's remorse if in a year or two the relative cost of NG makes it more expensive than propane (quite likely.) Is it worth it to you for convenience or the ability to tell your propane supplier what you think of his service attitude? Do you own your own propane tank or are you at the mercy of the supplier as your sole source because it is HIS TANK? If yes, then another alternative is to buy your own tank and shop around for propane. I do not have NG available so I bought my own LPG tanks so I could shop around. With two 1000 gal tanks I thought I could make it worth their while to fill me up. It turned out that the folks who sold me the tanks offered me the best price to fill them as well. I have the ability to fill BBQ and RV size LPG bottles as well as hand held torch tanks from my LPG storage tanks. Something you can't do with NG.

I may have gone with NG if it were easily available but it isn't. It would be more costly here to get it than for you.

If this is an emotional thing, do what makes you feel good and rationalize it. If it is a money management thing, then carefully weigh all the costs of the various options and pick what is supported by fact. Inability to predict LPG or NG prices shouldn't stop you since over time they track together pretty well. Just go with averages over the last few years escalated to current costs plus your educated guess about where prices are going. Take a look at gas futures and other info available to the planning department of the electric utility (huge consumer of gas.) The utilities often publish their hedging strategies.

Good luck to you,

[img]/forums/images/icons/smile.gif[/img] Pat [img]/forums/images/icons/smile.gif[/img]