THERM? KWH? WTF LOL

November 30, 2005 2:38 PM

Why is electricity so much more expensive then natural gas? Am I reading my bill wrong, or is it really an order of magnitude cheaper?

According to this page one "therm" is 100,000 btus, which is equal to about 29.3 kilowatt hours. My power company is charging about 10.9¢ per kwh, or about $3.21 per "therm" of electrical service. But they're only charging me 21¢ per "therm" of natural gas.

How does this make sense? Couldn't I just setup my own natural gas generator and save a ton of money? Couldn't anyone? What's the deal? (or are they simply using a diffrent definition of "therm")

posted by delmoi to science & nature (18 comments total)

Electricity is an extremely inefficient form of heating-- much of the energy is lost to heat in the generation of the electricity. Some is lost in transmission as well.

If you set up a natural gas generator, you could use the "lost" heat to warm your home, but you would lose the economy of scale.
posted by justkevin at 2:46 PM on November 30, 2005

Further clarification: 100,000 btus is the energy equivalent of 29.3 kilowatt hours. But you can't freely change that heat energy into electricty without some loss due to the second law of thermodynamics (although I believe you can turn electricity into heat with nearly perfect efficiency).
posted by justkevin at 2:52 PM on November 30, 2005

I think you might be reading the bill wrong, because natural gas at 21 cents per 100,000 Btu sounds incredibly low. Current natural gas spot prices (in the US) are around $12.50 per mmBtu - which would be $1.25 per 100,000 Btu.

The 21 cents/therm sounds a lot more like it would be a "distribution charge" - the price you pay them for running gas to your house. There should be another per therm charge for the gas itself.
posted by milkrate at 3:19 PM on November 30, 2005

Couldn't I just setup my own natural gas generator and save a ton of money?

I'd suspect that the electricity company's large gas turbine would be a lot more efficient than anything you'd have (fit?) in your house.
posted by pompomtom at 3:22 PM on November 30, 2005

Electricity The combustion engine is an extremely inefficient form of heating doing anything, including generating electricity -- much of the energy is lost to heat in the generation of the electricity.

Fixed it :)
posted by -harlequin- at 3:31 PM on November 30, 2005

pompomtom: Althought I thought that too, it appears that some types of smaller scale generation (25-500kW) might be more efficient (80% compared to 35-50%): Natural gas.

But I'd agree with milkrate about making sure you're reading the line items on your bill correctly. This DOE webpage says, from 2002, that a therm of natural gas is about $0.72-$1.02 in 2002 dollars. And a quick browse around at Energy Shop seems to show prices at around $1.70/therm right now ($14-$17/thousand cubic feet (using the DOE's estimation of 10.3 thousand cubic feet per therm)).
posted by skynxnex at 3:33 PM on November 30, 2005

pompomtom, you'd be suprised at the efficiencies in microturbines, which often surpass traditional gas turbines. A bigger problem would be getting as good a price on your gas, as the powerco can for their bulk purchases.
posted by nomisxid at 3:34 PM on November 30, 2005

I bet you could save even more if you generated your electricity from your water supply. Does your water come from surface sources / precipitation or from deep aquifers? This is important because surface water will contain more tritium.
posted by ryanrs at 3:39 PM on November 30, 2005

This isn't complicated. Natural gas that arrives at your home is pretty much exactly what comes out of the ground. Electricity has to be generated somehow from some energy source and there's big inefficiency right there—and then there's the overhead associated with the generation and transmission. Also, natural gas itself is pretty cheap to begin with.
posted by Ethereal Bligh at 3:53 PM on November 30, 2005

More to the point, what's the capital cost of your own generating equipment? Inc training, maintenance, etc.

Those linked micro-turbines are stated as being about 25% efficient. We're looking at up to 60% for modern large stationary generators (less distribution losses of course).
posted by wilful at 4:01 PM on November 30, 2005

Also, this is a nice demonstration of some general economic and scientific principles. In some places, some of that electricity is, in fact, generated by the burning of natural gas. But that's almost beside the point because the burning of fossil fuels which generates all or a large portion of the electricity we use are all roughly, relatively at the same amount of efficiency. Which isn't very. So why do we do it? Because the ways in which we can utilize energy in the form of electricity are far more numerous and safer than otherwise. Enough so that in general the economic use you can get out of that "therm" from electricity is an order of magnitude greater than from natural gas.
posted by Ethereal Bligh at 4:01 PM on November 30, 2005

In October 2005, I paid $2.1590/gal for propane delivered to my home in rural Santa Cruz county, CA. Propane has an energy density of 0.915 therms per gallon. So about $2.36 per therm.
posted by ryanrs at 4:19 PM on November 30, 2005

I'm thinking you may be able to save money over the long term if a large portion of your powerbill is used on heating your home, and you were prepared to put up with the noise of running the generator indoors (piping the fumes outside of course). As doing this, the inefficiency of the generator doesn't matter, as it reduces your heating bill.

If you have central heating ducts in your home, the noise problem could probably be addressed too.
posted by -harlequin- at 5:11 PM on November 30, 2005

Actually, you've hit on one of the emerging markets in power generation. At the moment, a lot of the first movers are getting shaken out as they try to figure out how to make the business of selling lots of tiny natural gas generators actually work.
posted by b1tr0t at 5:50 PM on November 30, 2005

Further clarification: 100,000 btus is the energy equivalent of 29.3 kilowatt hours. But you can't freely change that heat energy into electricty without some loss due to the second law of thermodynamics (although I believe you can turn electricity into heat with nearly perfect efficiency).

I should be able to get at least 50% efficiency, I would imagine. I was under the impression that the theoretical maximum for a real device was about 64%. Bonus: It's not 'inefficient' if I can use it to heat my house at the same time (if I had a house, rather then an apartment)

I bet you could save even more if you generated your electricity from your water supply. Does your water come from surface sources / precipitation or from deep aquifers? This is important because surface water will contain more tritium.

Yeah, if I had $40 billion sitting around to build a fusion reactor. I did wonder about using water pressure as a power supply, since I don't pay my water bill. In fact, in my last apartment I didn't even pay for gas (I could use the oven to heat the apartment, for example, for free) And a gas powered generator would have given me no-cost energy. But my power bill was only $30 or so a month.

But I'd agree with milkrate about making sure you're reading the line items on your bill correctly. This DOE webpage says, from 2002, that a therm of natural gas is about $0.72-$1.02 in 2002 dollars. And a quick browse around at Energy Shop seems to show prices at around $1.70/therm right now ($14-$17/thousand cubic feet (using the DOE's estimation of 10.3 thousand cubic feet per therm)).

Well, here's the natural gas portion of my bill:

___________________________________________________________________ 
GAS RESIDENTIAL SERVICE                               RATE CODE 030 
METER 94011166           22 THERMS / 33 DAYS = 0.667 THERMS PER DAY 
                          NEW RATE 0.667 THERMS X 11 DAYS X $.21490                       1.58 
                                   0.667 THERMS X 22 DAYS X $.21150                       3.10 
                                      GAS COST 22 THERMS X $1.12878                      24.83 
                             BASIC SERVICE CHARGE $.32870 X 33 DAYS                      10.85 
                                              $40.36 X TAX STATE 1%                        .40 
                                    $40.36 X TAX LOCAL 1% SCHOOL 1%                        .80 
                                         CURRENT CHARGES THIS METER                     $41.56

So it appears that I did read the bill wrong, as the 21¢/therm rate was for delivery (or something) that the gas actually cost about $1.28/therm.

Still, in theory if I had a house I could use a combo heater/generator to both heat and power my house, and probably halve my total utilities bill, in the winter anyway.
posted by delmoi at 6:45 PM on November 30, 2005

Yeah, but you'd have to buy and maintain the equipment to do that. Welcome to amortization.

Funny thing is, I was just an hour ago reading about gas generator technologies and their cost and efficiency tradeoffs. My electrical utility just started signing up customers for their new green power program and I was investigating the green-ness of it [answer: not very]. Interesting PDF here.
posted by intermod at 7:42 PM on November 30, 2005

Well, I'd like to do it just stick it to my power company. The city does electricity too, and I know people who pay less to the city each month in electricity then I do to pay the "Monthly service charge." Plus paying twice as much for electricity.

Not that I could ever do something like that anyway, c'est la vie.
posted by delmoi at 9:50 PM on November 30, 2005

pompomtom, you'd be suprised at the efficiencies in microturbines, which often surpass traditional gas turbines. A bigger problem would be getting as good a price on your gas, as the powerco can for their bulk purchases.

pompomtom would also have to bear in mind that if you generate the eelctricity yourself you don't have to pay the costs associated with electrical losses in distribution and generation or for the costs of transmission and generation which are built into the price you pay for electricity from the supplier, or the costs of (and any profits for) the supply company. Page 6 of this article shows how costs for domestic electricity supply in the UK break down. Less than 40% of costs associate with the generation function.
posted by biffa at 1:59 AM on December 1, 2005