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 Natural Gas is the Best Heating Choice for Consumers   

DOE Fuel Unit Costs Show Natural Gas Provides Best Heating Value

Washington, D.C. – The American Gas Association (AGA) today announced its 2013 residential space and water heating cost estimates, which demonstrate how using natural gas may cost less than other major home energy sources. According to estimates, customers can save up to $1200 on space heating and over $250 on water heating costs annually by choosing natural gas appliances. The cost comparisons are based on the United States Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy Representative Average Unit Costs of Energy notice as published in the Federal Register on March 22, 2013.

“This forecast gives customers a clear picture of the difference they can see in their wallet when they choose to heat their homes and warm their water with natural gas,” said AGA President and CEO Dave McCurdy. “Every day, America’s natural gas utilities are helping their customers achieve energy savings by delivering the most affordable, efficient, clean and domestically-produced fuel on the market. This is a dollars and cents picture of the benefits natural gas can bring to our nation.” 

A piece of equipment with a higher annual fuel utilization efficiency (AFUE) rating provides greater savings for customers. For example, a 97 percent AFUE natural gas furnace provides the lowest-cost space heating option for homeowners, followed by an 80 percent AFUE natural gas furnace. Both offer significant annual operating cost savings over comparable space heating options.

The tables below demonstrate estimated cost comparisons for home and water heating devices.

SPACE HEATING ANALYSIS SUMMARY: The space heating analysis is based on a 2,072 square foot house located in St. Louis and represents a 5,000 Heating Degree Day location. The house meets the energy conservation provisions in the 2012 International Residential Code and the space heating equipment is selected from the AHRI online directory. The 97 percent AFUE natural gas furnace provides the lowest annual operating cost followed by the 80 percent AFUE gas furnace.

2013 Space Heating Annual Cost Summary
(Estimated Annual Operating Cost)

Heating Equipment Type 

5000 Heating Degree Days 

97% AFUE Gas Furnace 


 80% AFUE Gas Furnace


7.7 HSPF  Electric Heat Pump


97% AFUE Propane Furnace


87% AFUE  Oil Furnace


80% AFUE  Propane Furnace


80% AFUE Oil Furnace Resistance Furnace


Electric Resistance Furnace 


WATER HEATER ANALYSIS SUMMARY: The water heater analysis is based on the equivalent First Hour Rating (FHR), national average energy usage, and the 2013 energy costs as published by DOE. A natural gas 40-gallon and an electric 50-gallon, both conventional storage types, are chosen based on their FHR. The natural gas water heater would provide the lowest
annual operating cost.

2013 Water Heating Annual Cost Summary
(Estimated Annual Operating Cost from Low to High)

 Water Heater Type

Annual Cost

 50 Gallon Natural Gas (FHR = 74 gallons)


 50 Gallon Electric (FHR = 67 gallons)


COMBINATION SPACE HEATING AND WATER HEATER INSTALLATION: Based on the annual cost analysis for space heating and water heaters, the combination of a natural gas 97% AFUE furnace and storage water heater provides the lowest operating cost space/water heating package.

2013 Space Heating with Water Heater Installations
(Estimated Annual Operating Cost from Low to High)

Space Heating/Water Heating Type 

Annual Cost

 Natural Gas: 97% AFUE Furnace & Water Heater


 Natural Gas: 80% AFUE & Water Heater


 Electric: Heat Pump & Water Heater


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The American Gas Association, founded in 1918, represents more than 200 local energy companies that deliver clean natural gas throughout the United States. There are more than 71 million residential, commercial and industrial natural gas customers in the U.S., of which 94 percent — over 68 million customers — receive their gas from AGA members. Today, natural gas meets almost one-fourth of the United States' energy needs.

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