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Gas Cost Compared With Other Fuels

Since 2001, most energy prices have risen to the highest level in history. Natural gas prices have risen, but gas is still less than other common energy sources. These are typical economics for most homes in Eastern Kentucky:

A mid-size home uses about 60 MCF of gas, or 72 million BTU's per year. To compare with other fuels, use these equivalent quantities and typical prices:

Natural Gas 60 MCF
$10.00 per MCF plus $10 monthly charge
Annual Cost


800 Gallons
$2.00 /Gal plus monthly $5 charge
Annual Cost

$1,660 (+131%)


18,000 kWhr (for heat & hot water, adjusted for efficiency)
$.08 per kWhr
Annual Cost

$1,440 (+100%)

Heat Pump

12,200 kWhr (for heat & hot water*, adjusted for efficiency)
$.08 per kWhr
Annual Cost

$976 (+36%)

photo powerplantOver many years in Eastern Kentucky, natural gas has remained under 1/2 the cost of propane or electric heat. Why?

Propane is extracted from natural gas. The cost per BTU must stay higher or no propane is made. The cost of truck delivery is also higher than by gas pipeline.

The all-electric house has been marketed for decades even though the cost has always been much higher than natural gas. That's because most electricity is generated by coal-fired plants, where conversion is only 30% efficient. This means 70% of the heat from coal is wasted as heat out the smokestack and cooling towers.

Electric heat pumps are more efficient than electric heaters*, but the heat pump needs a water source to exchange enough heat for Kentucky winters. The furnace output at 88°F doesn't feel "warm" like a gas furnace and the heat pump lasts about 1/2 as long.

Over the entire life cycle, electric heat costs much more. For these reasons all-electric homes sometimes suffer on resale value because of the heating choice.

Renewable energies like hydro, biomass, wind, and solar are good,but are still a tiny fraction of our total energy use. Nuclear energy produces about 8% of US energy but no new plants have been built in 30 years.

Electric heat still mostly comes from coal and natural gas is much cheaper and cleaner.

A few Eastern Kentucky homes are heated with fuel oil and wood or wood pellets*. Prices vary widely, but the cost comparison to natural gas is about:

Fuel oil 465 Gallons (adjusted for 65% furnace efficiency) $2.00 /Gal, plus $400 for electric water heater - Annual cost $1,330 (+85%)
Firewood 4.6 cords (60% efficient stove) $100 /cord (2200 lbs), plus $400 for electric water heater - Annual cost $ 860 (+19%)
Wood pellets 207 bags (75% efficient stove) $5 per 40lb bag or $250 per ton, plus $400 for electric water heater - Annual cost $1,435 (+99%)

*Electric heat pumps, fuel oil furnaces, and wood burners don't provide hot water which requires about 250 therms per year. Electric water heaters cost about $400 per year to operate. Gas is about $200, so the electric water heater costs $17 per month more than gas year after year.

Current rates for all Kentucky utilities are available from the Kentucky Public Service Commission

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