Utilities warn against switching to electric heat
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By Dave Gram Associated Press - Published: June 26, 2008
MONTPELIER — Thinking about switching to electric heat, to beat the high cost of oil?
Don't do it, say state officials and Vermont's electric utilities.
"E-21," a consortium of power companies, warned Wednesday that electricity prices may look competitive with other fuels now, but that that likely won't be the case for long.
According to the state Department of Public Service, given current fuel prices, it would cost $36.02 to make 1 million British thermal units burning No. 2 home heating oil, and just a bit more ($39.01) to make the same amount of heat with electricity.
Electricity actually beat the most expensive heating fuel — kerosene, which came in at $39.92 per million Btu.
"It's competitive," said Department of Public Service spokesman Stephen Wark. But he said switching from oil to electricity for heat likely would bring "short-term gain and long-term pain."
You might think electric utilities would be only too happy to sell more of their product.
But Vermont's utilities — a group that ranges from Central Vermont Public Service Corp. to the 700-customer Village of Jacksonville Electric Company — said to think twice.
"Fuel costs may be frightening, but we urge consumers to do a thorough analysis of all costs and related issues before turning to electricity for heating," they said in a statement. "Despite the run-up in fuel prices, electricity may not provide any savings for heating, and presents other concerns."
The state consumer advocate in Maine said the Vermont advice made sense to him, too. Richard Davies said some homes that have multiple sources of heat — propane and electricity, for example — might want to choose electricity for the upcoming winter.
But homeowners with just one source of heat probably want to start with an energy audit and follow-up conservation work around a home — caulking, for example, Davies said.
In New Hampshire, Martin Murray, spokesman for the Manchester-based utility Public Service Co. of New Hampshire, said he did not expect any stampede to electric heat.
"Anecdotally, we believe that customers are not considering a wholesale change from their current energy source to electricity ... but are thinking about reducing their overall heating requirements by lowering the traditional oil or gas heat in some rooms and supplementing with small electric space heaters in selective rooms," Murray said. "That is not necessarily a bad thing."
Vermont officials gave two big reasons to believe electric costs won't remain stable for the long term, and said a lot of people switching to electric heat actually could worsen expected rate increases.
First, Vermont's relatively low-cost power purchase contracts with the provincial utility Hydro-Quebec and with the Vermont Yankee nuclear plant expire within the next 10 years and are expected to be replaced with higher-priced power.
Second, new power demand because of increased electric heating could drive up costs by forcing more power line construction in the state and forcing utilities to buy power on the spot market at costs significantly higher than either the Vermont Yankee or Hydro-Quebec power.
"We've had a huge push in the past seven years to use efficiency in an intelligent way and to try to use efficiency to control load growth," Wark said. "This moves us in the wrong direction."
There were indications Wednesday that Vermonters might be heeding the message already, though.
Pamela Moore, clerk of the Jacksonville utility, said she had heard customers talking about switching to electric heat because of rising fuel costs, but only in a joking manner.
If she heard someone talking seriously, Moore said, "I'd tell them to call Efficiency Vermont (the statewide energy-saving program) or go somewhere to get some good advice. ... Because if their (electric) bill was higher because of heat, I'd have to hear about it next winter."
Brian Hanson, village supervisor in Barton, whose duties include overseeing the municipal utility there, said, "I think the general public is aware enough. They're up on today's economics and stuff that they would probably not do it."
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