As these build and design professionals enter the exhibition hall, the natural gas industry exhibit will be one of the first exhibits they see. This 2,500-square-foot exhibit will be the result of an important partnership between AGA members and manufacturers of gas appliances demonstrating the latest, most innovative technologies available to consumers. These manufacturers include Bevelo Gas & Electric Lights, BlueStar, FiveStar, Dettson Industries, Lennox Industries Inc., Marathon Engine Systems, Navien, Rinnai Corporation and RH Peterson Co.
With the ups and downs on the road to a normal housing market, this month builder confidence reached its highest level since November 2005. IBS 2016 promises to be a successful event delivering the largest number of building professionals in one location. If you are interested in supporting the natural gas industry efforts at IBS as a volunteer or manufacturer, please contact Tracy Burleson at firstname.lastname@example.org.
To see video highlights of AGA’s booth and manufacturers from the 2015 International Builders’ Show, click on the video below:
In March, the U.S. Department of Energy (DOE) proposed a rule that would mandate the manufacture of natural gas furnaces that meet a 92 percent or higher specification for energy efficiency. At first glance, the rule appears to be a positive step forward for energy efficiency. In reality, DOE’s proposal would create a number of counterproductive and unintended consequences that could increase energy use.
In this post, I want to focus on the economic burden placed on consumers and in particular low-income households, which are disproportionately vulnerable to higher costs.*
On April 13, DOE held a public meeting on the proposed rule. In its response to concerns about how the rule will affect low-income households, DOE stated that “most low income households are tenants.”
DOE’s argument is that property owners, not renters, are responsible for the higher upfront costs of a furnace installation. Tenants do not have to cover the costs of a higher efficiency furnace, but would enjoy the lower fuel savings. Consequently, low-income households, most of which DOE says are renters, are insulated from the higher costs imposed by DOE’s rule.
Except this is not true. An analysis of US Census data** shows that 53 percent of low-income natural gas households are owner-occupied. Less than half are renters. In fact, 1 out of 7 U.S. households is low-income with a natural gas furnace.
This means up to 9 million low-income home owners with a natural gas furnace would be faced with higher upfront costs imposed under DOE’s rule.
Because low-income households have fewer resources to pay for the installation of a higher-efficiency gas furnace, they are more likely to switch to less-expensive electric equipment that costs more to operate. This, in turn, means low-income households are more likely than other homes to see higher utility bills under DOE’s rule.
Even renters could pay more. If a property owner cannot or chooses not to cover the upfront costs of a furnace installation, they may make a switch to less efficient equipment, in which case fuel costs will go up. Many renters pay separate utility bills (myself included). Landlords of these properties don’t see operating costs, so they don’t directly benefit from an upgraded furnace.
Ironically, even the study that DOE cited notes that rental units are less likely to have efficient equipment. In fact, it’s this principal-agent problem that stymies a lot of energy efficiency potential. Are we to just assume, as DOE does, that no landlords will switch to lower-cost electric equipment?
The disproportionate effect of higher costs is one reason why 71 percent of gas utility efficiency programs target low-income customers.
The rule may have a pernicious secondary effect on low-income assistance. Each year, through the Low Income Home Energy Assistance Program (LIHEAP), the Federal government assists the most vulnerable households to meet heating and cooling needs. But the program is stretched already.
Current LIHEAP funding leaves 4 out of 5 eligible households without assistance. The furnace rule could exacerbate this condition. If this rule induces customers to switch to higher cost heating fuels, the requirements of a low-income program like LIHEAP will increase, putting further strain on the program.
Industry concerns about this rule are not about taking a position against energy efficiency. Natural gas utilities have a demonstrated track record of supporting efficiency and reducing household gas consumption. Rather, it’s about re-examining a top-down prescriptive approach and instead applying a comprehensive vision for furnace efficiency, one that recognizes proven approaches that are cost-effective and protects all customers.
*Here’s a rundown on the costs. A 92 percent efficient furnace costs roughly $300 more than unit rated at 80 percent, which is the mandated minimum today. However, the installation cost of these higher-efficiency furnaces be in excess of $1000 to $4000 more, a result of new venting requirements that may be difficult or impossible in some homes.
**AGA analysis of the U.S. American Community Survey, 5-Year 2009-2013 multi-year combination microdata files, accessed via DataFerrett. The summary table shows the breakdown of occupied households with natural gas space heating by tenure and income level (using $45,622 as the low-income threshold)
BlueStar attracted a lot of media attention, including HGTV who stopped by on the first day of the show to film their new range in the Pantone Color or the Year, Marsala. Their product was a great tie-in of both shows and attracted builders and designers alike.
AGA booth attendees had the opportunity to register to win a natural gas lantern by RH Peterson. Since photos just didn’t do it justice, we put together a quick, 15 second video to share to help showcase the natural gas lantern which was used on AGA’s social media platforms. Congratulations to our lantern winner Randy Stovall, of Wichita, KS!
At the start of the second day of the show, AGA had the pleasure of hosting the NAHB Women in Professional Building Council breakfast at our booth. This is a long-standing tradition and we enjoy having this lively group with us each year.
This year’s celebrity sighting at the AGA booth was comedian and host of “Catch a Contractor,” Adam Carolla (right). He stopped by to learn about FireMagic Grills from RH Peterson Vice President Mike Waller (left).
On the third and final day, AGA took a tour of the sophisticated 2015 New American Home. AGA was a sponsor of the home and worked closely with Southwest Gas, who delivered natural gas to the home, while Questar Gas provided a bi-fuel Chevrolet pickup for display in the driveway.
Image Courtesy of www.tnah.com
AGA looks forward to returning to Vegas on January 19-21, 2016 when IBS and KBIS will join forces for the third year in a row. Last week, the two shows announced that they will continue to co-locate through 2020. For more information about next year’s show and beyond, contact Tracy Burleson at email@example.com.
More than 177 million Americans use natural gas to cook a hot meal, heat their water or warm their houses. Many parts of the country have felt the chill of winter and that means folks are using more natural gas. The American Gas Association has developed a video to explain what goes into your natural gas bill.
Your bill is essentially comprised of three parts:
Gas you used: Often, the largest part of your bill is based on the amount of natural gas you use each month. The United States has an abundance of clean natural gas and that has led to stable and affordable prices. Utilities do not make a profit on the gas they deliver to your home or business.
Delivery cost: The public utility commission, a group of elected or appointed officials, sets the rate that your utility can charge each month. Included in this cost is maintenance, upgrades of the pipes that deliver natural gas to your home or businesses and everything else that is needed to help ensure safe and reliable delivery of natural gas.
Local, state and federal taxes.
During the 2013-14 Winter Heating Season, the natural gas delivery system in the United States achieved historic levels of performance. More natural gas was delivered through more pipelines to more customers than ever before, and customer bills remained affordable. Residential customer bills increased only 10 percent on average from the prior winter – an increase mostly due to higher consumption.
AGA expects relatively warmer temperatures this winter based on information from the climate Prediction Center, which may lead to a reduction in demand. Natural gas prices are likely to be slightly higher, resulting in an increase in customer bills of about seven percent this winter.
Promise Delivered is an AGA study of the planning, preparation and performance of the natural gas system during the 2013-14 Winter Heating Season. Utilities work all year to prepare for the possibility of extreme temperatures and employ a portfolio approach to help ensure they can meet the needs of their customers at affordable prices on the coldest days of the year. Before last year’s extraordinary winter concluded, they were already preparing for this winter cycle.