Does Switching from Gas to Oil Heat with Oil Prices Dropping Make Sense?
Recently, with the volatility in the stock market and oil prices dropping to roughly $60 per barrel, we wanted to update you on whether switching from gas to oil heat with oil prices dropping makes sense. To consider switching, we recommend the following:
1. First, you must be able to switch from gas to oil (dual fuel).
2. You should verify that you are not contractually obligated to stay on gas with the utility or if you use an ESCO and confirm your ESCO contract doesn’t have any penalties for switching, as there could be liquidation damages.
3. Once you have checked and if there is no issue, with your utility invoice in hand, check the gas rate on your utility invoice by taking the total amount (less any taxes), dividing by your usage to get a price per Therm. Then, convert the current oil price to the equivalent price per Therm using a conversion factor of 1.32 (No. 2 Oil with B10 uses approximately 132,000 BTUs per gallon, natural gas uses 100,000 BTUs per Therm). Note: Add the Delivery and Supply Charges when obtaining the utility price per Therm.
4. If you switch to oil, you will continue receiving a minimum gas bill from the utility to keep the account open.
5. If the price of oil is less than the price of natural gas, then consider:
a. If you switch to oil, oil produces more carbon than natural gas, and there may be an increase in your building’s “Carbon Footprint” as measured in your Local Law 84 Benchmarking and Local Law 97 Decarbonization, where an increase in your carbon footprint could cause you to pay fines.
Lastly, as we are coming out of the Winter and heating requirements drop, the savings opportunity also drops. To prepare for next winter, schedule a time to have your heating system cleaned and tuned before the next winter season for optimal performance while service companies are not as busy.
For more information or to learn about how the NYAA Energy Program can benefit you as a member, please contact:
Tim Connors
(212) 914-9215