Federal agency predicts a 77% jump in electric heating costs | Environment

The average American household that uses electricity to heat a home this winter will pay hundreds of dollars more than those who use natural gas, according to a new report from a federal agency.

The report from the U.S. Energy Information Administration said a home that uses electricity will pay 77% more or an average of $462 this winter, compared to a household that uses natural gas. 

Looking into the winter fuel outlook, the report said electricity will cost $46.19, based on a unit of heat. By comparison, the cost of natural gas cost will be $13.97.

The report doesn’t necessarily mean metro Denver households will face exactly the same cost differences, particularly since the energy office report uses averaging. Colorado officials have embraced electrification as a way to reach greenhouse gas emissions goals. Large buildings, for example, face requirements to make their energy use more efficient. In Denver, officials offer carrots and sticks in their efforts to cut carbon emissions and electrify buildings of a certain size.

Supporters say such requirements are necessary to combat climate change and ensure a healthier environment. Critics counter that Denver and the state of Colorado are rushing too quickly at the expense of residents and businesses.   

Among those critics is energy author, film producer and podcaster Robert Bryce, who argued that banning natural gas for heating, for example, “will result in dramatic increases in energy costs and impose a regressive tax on the poor and the middle class.”

“The numbers from the Department of Energy and the Energy Information Administration show that on a Btu basis, electricity costs three times more than natural gas,” Bryce told The Denver Gazette. “This electrify-everything push, it’s bad for energy security, it’s bad for affordability, and it’s bad for resilience.”

One issue in the debate is that “electrification” doesn’t mean the same thing to everyone. For one thing, the definition of “using electricity to heat their homes” used by the federal energy office appears to mean the use of electrical resistance baseboard heating versus natural gas heated-air furnaces.

But in the Energize Denver initiative, city officials are talking about heat pumps versus gas furnaces, which means a different set of cost calculations.

Supporters maintain heat pumps are a viable alternative to gas furnaces, while critics insist that most heat pumps lose efficiency when it gets cold and at a high altitude, precisely the conditions in the Front Range. 

Katrina Managan director of the Denver Climate Office, said that, for existing homes, Denver’s Renewable Heating and Cooling Plan found that the annual energy bill to operate a standard gas furnace/AC combination is about $633 a year. With a heat pump, she said, it would likely be $609 to $718 annually, depending on the heat pump technology chosen and its configuration.

Managan said a natural gas furnace is 90% efficient, while a heat pump is 200% to 300% efficient.

The high efficiency of heat pumps is based on how it functions, Managan added. Heat pumps, like air conditioners, don’t create heat by burning natural gas or heating up an electric resistance coil. Instead, move existing heat from one place to another.

Gas furnaces are less expensive to operate electrically, while heat pumps use more electricity because of their more complex system of compressors and heat exchangers, Managan noted.

“They will use more electricity than a gas furnace, but similar or a more similar amount to what your air conditioner uses,” said Managan. “Typically, a heat pump is going in place of an air conditioner. It can cool the building, but it can also heat the building, and those really efficient cold climate heat pumps are similar in electrical capacity.”

Heat pumps are very expensive, said Dave Davia, CEO for the Rocky Mountain Mechanical Contractors Association.

“It depends on where you live, what you’re trying to heat, and the nuances of your square footage of your home,” Davia said. “But if it’s an average home, (it’s) somewhere between $12,000 and $14,000 to replace gas appliance with gas appliance. It’s 2.5 times more expensive for a heat pump for a 2,000 square foot home versus gas forced air.”

And that’s for an ordinary heat pump. Advanced systems that work in extreme cold are more expensive yet, experts said.

Denver and state officials are confident the technology will advance and make cold climate heat pumps more affordable. They insist that fast decarbonization in Colorado is necessary to achieve an obligation to meet global greenhouse gas reduction goals. They note that numerous programs at both the state and local levels exist to help property owners pay for the upgrades.

Bryce is critical of the notion that heat pumps are going to provide energy security for Americans.

“This idea that we’re going to quit burning hydrocarbons — well, you can say that it’s easy, but it isn’t,” he said. 

He added: “The key to having a successful society is being able to handle extremes … We have to be very sober about how we look at these issues because if we get these policies wrong, people are going to die.” 

The Federal Energy Regulatory Commission and the National Energy Reliability Corporation have both issued warnings that the nation’s grid is at growing risk of failure from the shuttering of reliable full-time coal and gas power plants in favor of renewable energy.

“I think the United States is heading for a very catastrophic situation in terms of reliability,” said Federal Energy Regulatory Commissioner Mark Christie during a May 4 Senate Energy and Natural Resources Committee hearing on Capitol Hill. “The core of the problem is actually very simple. We are retiring dispatchable generating resources at a pace and in an amount that is far too fast and far too great and is threatening our ability to keep the lights on.”