NATURAL GAS Winter heating bills likely to be high

Utilities recommend buying new furnaces now to avoid high winter bills.
By MYRA P. SAEFONG
CBS MARKETWATCH
SAN FRANCISCO -- As consumers tackle home improvements this summer, there's one project they tend to overlook that offers a return on their investment -- furnace replacement.
Don't laugh. Natural-gas prices are nearly double the level they were at a year ago, and that could spell big trouble for winter heating bills.
Utilities buy much of the natural gas they expect customers to use come winter during the summer, and with prices at $6 per million British thermal units vs. around $3 a year ago, bills have the potential to double.
Of course, it all depends on what Mother Nature has planned for the rest of the year.
"Prices are high now, but people don't for the most part know or care ... because they're just not using a lot of natural gas," said Jason Alderman, a spokesman at PG & amp;E Corp.'s (PCG) Pacific Gas & amp; Electric utility, which serves nearly 4 million gas customers.
But "we're going to have a lot customers with significant sticker-shock ... whenever the first cold weather hits," he said.
With summer heat yet to drain already tight supplies, the potential impact on consumers' wallets will likely rear its ugly head at the sign of the first winter cold.
There's still time
The good news is it's not too late for consumers to decide whether changing an old furnace is the solution to the potential cost crunch.
Consumers can save up to 50 percent in heating costs, depending on the furnace's efficiency rating, the home's insulation, duct work and several other factors, said Ken Jureensmeyer, the national heating, ventilation and air conditioning engineering manager for Sears, the nation's leading installing contractor for furnace and air conditioning units.
Jim Fay, president of consulting group North Star Energy Group said "going from the lowest efficiency model to the highest efficiency model will save 100 therms." So, for example, if it costs the consumer about $10 per million British thermal units or $1 per therm, then a consumer can save about $100, he said.
Mark Kendall, director of Gas Appliance Manufacturers Association (www.gamanet.org) said the typical savings is roughly $75 during the heating season, with the actual number higher depending on the weather.
Overall cost
New furnaces can cost as little as $500 to $1,000 plus another $500 or so for installation, Jureensmeyer said. A quick look on the Internet, estimates replacement costs at $1,500 including labor to upwards of about $5,000 depending on too many variables to count, including the amount of labor involved and energy efficiency.
But rebates from the retailer, manufacturers and utilities can help out with those costs.
Pacific Gas & amp; Electric's offering a rebate of $200 for consumers who switch to an Energy Star-labeled furnace, ones that have annual fuel utilization efficiency (AFUE) of 90 percent or greater. Sears said its last rebate was about $250, and the retailer has zero-percent financing available.
So "there is a lot of help out there for the consumer," said Jureensmeyer.