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Costs of natural gas when it is not used as a primary heating source

user-1102988628 | Posted in General Questions on


I just built a much ‘better than code house’ in CT using air source heat pumps and a gas on demand HW heater. I have recently learned that it was a mistake to use the gas HW heater because the gas company  (no options bu CT Natural Gas) charges me a 60% higher rate because gas is not my primary heating source. So, beware of the local utility monopolies and the penalizing amounts they are permitted to charge and include them in your cost calculations. An electric on demand HW heater would have been the better choice….had I known. 

How is it possible/legal to charge a homeowner 60% more just because they use less gas?  Apparently, this rate structure is approved by PURA and exists in other locations as well. It seems punitive especially when there is no choice in suppliers.



  1. user-2310254 | | #1


    Can't speak to why CT allows that practice, but I would note that electric on-demand water heaters require a large electric service to perform like a gas-fired unit. (This topic has generated a few threads on GBA.) A heat pump water heater would be worth considering though.

  2. user-1102988628 | | #2

    Hi Steve,
    I was unaware that I should have considered other options before spending $$$ on my gas HW heater.....just trying to get the word out so others can get ahead of this issue. Making a change now would just put me further in the hole.

    1. bfw577 | | #8

      CT resident here as well. You should install a heat pump water heater. There is a $750 rebate through the state efficiency program Energize CT. The AO Smith at lowes would cost you $250. I had an electrical monitor on mine for a year and for my wife and I it used about $8-10 a month in electricity.

      I would disconnect from the gas and sell the on demand unit. Have you looked into solar? CT has extremely generous incentives.

      How much was the monthly gas bill for?

  3. walta100 | | #3

    You could convert the heater to propane and put in a tank but it is unlikely to pay off in dollars.

    The rates and pricing structure are approved by local commission whose members are appointed by people you had a chance to vote for or against. Write a letter to the commission asking them to help you understand this rate structure that seems so unfair at first glance. You are likely to receive a reply with some premises of reasonableness. Some of the commissions have been stacked against the consumer. If you are still unconvinced write complaint letter the elected officials you can vote for.


  4. joshdurston | | #4

    There is also the matter of the fixed meter charges. I pay $22/month for my gas meter before I use any. It's not bad if it's your heat source, but for DHW only it's a tough pill to swallow.

    Imagine if you had to pay $15 to fill up your car just to access the gas pump (on top of the $/gal). You'd only do it if you were going be filling a big tank.

    To be clear, I get the utilities have to pay for their infrastructure so I'm not necessarily against the monthly charges.

    Personally, I'm trying to eliminate my gas meter over the next 5 years as I replace appliances.

  5. etekberg | | #5

    I am hot water gas only* as well, and indeed I didn't think it through very much. Here you can elect to be on either of two plans: one has a higher monthly service charge and lower per decatherm charge, and the other plan has a lower monthly service charge and higher per decatherm charge. For not heating with natural gas I am better off being on the higher per decatherm charge plan. My bill is $40 to $50 per month.

    *technically I also have gas dryer, grill, and a fireplace I never use - all probably negligible

    1. etekberg | | #6

      I should add, I actually did the math and electric on demand heaters would be a little bit cheaper for me. Especially in the winter when the electric rates go to about 6 cents a kwh here. But I would need about an 800 or 1000 AMP service - I'm on 400 amp now. I have no idea if the electric company will hand out that kind of stuff to a residence.

      1. Expert Member
        BILL WICHERS | | #7

        You’re probably not on a 400A service now, they’re pretty uncommon. Standard services are 100A and 200A. There IS a “400A” service, but it’s actually 320A. There is no such thing as 800A or 1000A residential service and you wouldn’t need that much for an on-demand hot water heater. A 200A service is usually sufficient for even a 25KW tankless electric water heater, which will actually draw just over 100A.

        An 800A, 120/240 split (single) phase electric service would be 192KW with resistive heating loads. To put that in perspective, a typical small commercial office building is likely to have a 150-300 KVA service, which is roughly equivalent to about 135-270KW or so.

        Electric companies don’t like to install “400 amp” residential services. If you actually needed more than that, they’d probably want you to be on a commercial three phase system. Massive cyclic loads of hundreds of amperes are enough to cause localized flicker in residential neighborhoods which annoy utility customers and also the utility companies if they get calls to “fix” the problem.


        1. etekberg | | #9

          Thanks for the info. I understand they don't like non steady loads.

          Technically, I don't know what kind of service I have as it I don't see any markings on the bill, and I guess I don't need to know enough to call them. But the service feeds two 200A panels, which by itself I guess doesn't mean much. Two 200A panels are pretty standard for a large heat pump houses around here with typical leaky construction.

          As to the electric hot water: I have two 200k BTU heaters now. My math to replace them is:

          2 * 200000 BTU/hr * .9 effiiciency * .000293071 kW/BTU * 1000W/kW / 240V = 440A

          That plus my existing 400 panel equals 800. I was just going for a: is this feasible kind of assessment.

          1. Expert Member
            BILL WICHERS | | #10

            If you have two panels paralleled off of one meter (each panel has its own 200A breaker), then that would be a 400A service. Look at the main breakers, the handles are usually where the ampacity marking is.

            Those would be MASSIVELY big electric water heaters. Are you SURE you have your numbers right? 1,000 BTU = 3,412 watts, and electric heaters are generally considered to be 100% efficient so you don’t derate them.

            Your existing 400A service is extremely unlikely to be maxxed out with regular loads. If you really have electric heaters using as much as you say, then those are going to be BY FAR the largest loads in your home. A typical modern service is 200A, and the utility industry usually uses 1kw per Home (about 4.2A at 240V) as an average load per home when averaged over very large numbers of homes.

            To give you some perspective, if you use 10 cents per kilowatt hour as your electric rate, a 320A service running at max capacity 24 hours a day would be just over $5,500/month of electric usage.


  6. BirchwoodBill | | #11

    Natural gas utilities are starting to charge for maintenance of the gas line , despite the volume. Many of the old pipes in the ground are beyond end of life and need to be replaced. With solar becoming more affordable I am trying to stay from NG as a heat source. Money better spent on air sealing and energy recovery.

    1. _Stephen_ | | #12

      I need to switch from natural gas... I pay more in meter costs then in gas.

  7. Expert Member
    Dana Dorsett | | #13

    >"How is it possible/legal to charge a homeowner 60% more just because they use less gas? "

    Because it's a regulated monopoly, the rates are approved by the state regulators. If you have a problem with the rate structures, taking the case to the regulators (not the utility) is the proper course of action. Yes, the regulators often get too chummy/familiar with the regulated, but to charge those rates required the utility to make the case to the regulators.

    If you think they've habitually been a bit TOO chummy, filing a complaint with the state attorney general's office would be the next step. (In MA there have been several recent-years utility rate cases approved by regulators later overturned by the attorney general.)

    >"An electric on demand HW heater would have been the better choice….had I known."

    Absolutely not, even without doing the peak demand math. The wintertime incoming water temps in CT are too low to make that a viable option- even the biggest electric tankless water heaters won't cut it.

    What you need is an appropriately sized electric tank, preferably with a heat pump. Even a Sanden Eco 2 with the 119 gallon tank (most homes could do just fine with the 43 gallon version, though hot water hogs might need the 83 gallon), which is enough water heater to fill a big spa tub faster than a gas tankless would probably be cheaper to install than the upgraded electric service and multiple electric tankless units, and it would use only about 1/4 the annual kwh of an electric tankless solution, without the insane peak loads of an all tankless solution.

    But seriously, even with the 1.6x multiplier on the energy portion of the gas bill, what are your total monthly charges and ccf (or therms or whatever units they're using for billing the energy portion)?

    1. bfw577 | | #14

      See my post above. CT has a $750 rebate on heat pump water heaters. He could walk into any Lowes in CT and buy one for $250.

      CT also has crazy generous rebates for solar and air source heat pumps. I went all electric with 2 hyper heat mini splits and a heat pump water heater years ago. My electric bill is $9 a month and my panels will be paid of starting next year.

      1. Expert Member
        Dana Dorsett | | #15

        >"CT also has crazy generous rebates for solar and air source heat pumps. I went all electric with 2 hyper heat mini splits and a heat pump water heater years ago. My electric bill is $9 a month and my panels will be paid of starting next year."


        (That's pretty good!)

        In the electric service areas of CT served by Eversource or United Illuminating even Tesla's solar RENTAL (near-zero money up front, 1000x easier to get out of than a lease) delivers electricity at a bit more than half the retail cost from those utilities, though clearly the incentives for buying make it very attractive for those who will be staying for more than a few years.

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