Winter 2000

Nebraska Energy Quarterly logo Nebraska Energy Quarterly gasoline pump

Home Heating Help is Just a Call Away

As Nebraskans braced for a return to typical...

The Average wellhead price for gas...

According to a recent analysis...

Propane prices are subject to a number...

Marginal Wells Dominate State's Oil Fields

With America's oil production on the decline...

Hot Water Use Can Affect Utility Bills

Water heating is the third largest energy expense...

5% Dollar and Energy Saving Loans

The Nebraska bank where a borrower conducts business recently merged...

According to a leading monitor...

Information Services and Resources

The Energy Efficiency and The Renewable Energy Clearinghouse...


Phone 1-800-DIAL-DOE, that's 1-800-342-5363

Home Heating Help is Just a Call Away

As Nebraskans braced for a return to a typical Plains winter, they also braced for the highest heating bills in recent memory.

The double whammy of a return to seasonal winters and record-setting natural gas prices -- with propane prices not that far behind -- have combined to give Americans a dose of unseasonable bill-paying angst.

For Nebraskans having difficulty coping with heating bills there are several options:

  • Call Pete Davis in the Energy Office at 402-471-2186 to find out if you could receive free home weatherization and where to apply for that service. There are income restrictions on who can receive these services. Regional providers of weatherization services are also listed on the Energy Office's web site at Wx Contacts
  • Financial assistance may also be available from the state's Department of Health and Human Services. Particulars on the availability of this assistance can be found at the agency's web site: Income restrictions DHHS Financial Assistance Local offices DHHS Local Offices

Another resource for help on how to lower your utility bills is the newly established U.S. Department of Energy Home Heating Help Hotline, which is available by pressing button one when calling 1-800-Dial-DOE, the Department of Energy's Consumer Resource Gateway. The Hotline will be operational until March 30.

People calling this special Hotline will have their phone calls answered by live operators from 8:00 a.m. until 7:00 p.m. Central Standard Time. Other than these business hours or in the event of overflow calls, phones will be answered by a recording 24 hours a day, seven days a week.

Those who use this hotline will get a live operator who will give them:

  • A place to share their stories about how the heating price hikes have impacted their household or business; and
  • The opportunity to receive more detailed information by mail to help consumers, including energy tips for home heating and a package of three of the latest brochures from the Energy Information Administration on heating your home with propane, natural gas or heating oil.

The same information is also available at EIA Information in a special "related links" page. One of the links is "How to Lower Your Heating Bill."

Among the options listed at the "related links" site are:

  • Energy and price outlooks for the near-term;
  • Assistance options; and
  • Consumer information on propane and natural gas issues.

It's Not Too Late

On the page, "How to Lower Your Heating Bill," visitors will find both "Cheap and Easy Fixes" that save up to 25 percent of the energy costs and "Longer Term Solutions" that can save up to 50 percent of the costs.

Among the "Cheap and Easy" options are:

  • Seal out the cold air;
  • Tune up the heating system;
  • Improve thermostat performance; and
  • Practice window management.

Among the "Longer Term Solutions" are:

  • Add insulation;
  • Replace old furnace and water heater;
  • Upgrade windows; and
  • Plant windbreaks.

Unfortunately, some of the suggestions for cutting energy bills may not be able to tackled until warmer weather returns to the Plains.

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Natural gas flame

Why Have Natural Gas Prices Risen So Much?

The average wellhead price for gas was as low as $0.16 per therm, or $1.69 per thousand cubic feet, in September 1998. In September 2000 prices soared to $0.39 per therm or almost $4.00 per thousand cubic feet. This increase reflects a competitive market reaction as supply has lagged in its response to a recent surge in demand.

The latest Energy Information Administration assessment, issued in early December, projected that Americans heating with natural gas would spend at least $300 more this year on heating costs compared to last year. At the same time, natural gas prices on the commodities market were reaching $10 per thousand cubic feet, four times the cost of gas last year.

Although gas exploration and development have increased significantly in the past year, the response to the increased drilling for gas has yet to be fully reflected in sufficient additional supplies to affect prices. This is due to the 6 - 18 month lag time between the time of initial drilling and when additional production is brought to the market.

Natural gas demand in 2000 has increased because of a number of factors, including the start of operations at new gas-fired electric-power generators and new home construction, which tends heavily toward the use of natural gas for heating and cooking. Natural gas prices are expected to continue at levels much higher than last year through this winter, before coming back down after the heating season.

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Thermostat
Thermostat

It takes a only a second...

Save $15-$40 the Easy Way

According to a recent analysis by the Energy Information Administration based on current energy costs, households that lower their thermostats only 1 degree during the heating season could easily save $15-$40 or more.

The agency based its estimate on recent price data. Actual savings for individual households depend on the type of main heating fuel and the amount of fuel used, which, in turn, depend on the home size, amount of insulation, area of the country and many other variables.

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What Influences Propane Prices?

Propane prices are subject to a number of influences, some are common to all petroleum products and others are unique to propane.

Because propane is portable, it can serve many different markets, from fueling barbecue grills to producing petrochemicals. The price of propane in these markets is influenced by many factors, including the prices of competing fuels in each market; the distance propane has to travel to reach a customer; and the volumes used by a customer. More specifically, propane prices are affected by:

Crude Oil and Natural Gas Prices - Although propane is produced from both crude oil refining and natural gas processing, its price is influenced mainly by the cost of crude oil. This is because propane competes mostly with crude oil-based fuels.

Propane delivery truck
Propane delivery truck

Supply/Demand Balance - Propane supply and demand is subject to changes in domestic production, weather and inventory levels, among other factors. While propane production is not seasonal, residential demand is highly seasonal. This imbalance causes inventories to be built up during the summer months when consumption is low and for inventories to be drawn down during the winter months when consumption is much higher. When inventories of propane at the start of the winter heating season are low, chances increase that higher propane prices may occur during the winter season. Colder-than-normal weather can put extra pressure on propane prices during the high demand winter season because there are no readily available sources of increased supply except for imports. And imports may take several weeks to arrive, during which time larger-than-normal withdrawals from inventories may occur, sending prices upward. Cold weather early in the heating season can cause higher prices sooner rather than later, since early inventory withdrawals affect supply availability for the rest of the winter.

Proximity of Supply - Due to transportation costs, customers farthest from the major supply sources, which are the Gulf Coast and the Midwest, will generally pay higher prices for propane.

Propane brochure
Propane brochure

Markets Served - Propane demand comes from several different markets that exhibit distinct patterns in response to the seasons and other influences. Residential demand, for instance, depends on the weather, so prices tend to rise in the winter. The petrochemical sector is more flexible in its need for propane and tends to buy it during the spring and summer, when prices decline. If producers of petrochemicals should have to depart from this pattern for some reason, the coinciding demand could raise prices. And when prices rise unexpectedly, as they do sometimes in the winter, petrochemical producers pull back, helping to ease prices. Prices could also be driven up if agricultural sector demand for propane to dry crops remains high late into the fall, when residential demand begins to rise.

For a copy of Propane Prices, What Consumers Should Know, from which this information was excerpted, contact Jerry Loos in the Energy Office.

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Nearly 1,500 Wells...

Marginal Wells Dominate State's Oil Fields

With America's oil production on the decline, few in Nebraska may know that the state plays a role in stemming the tide of oil imports. Even fewer know that most of the oil pumped in Nebraska comes from wells that produce about three barrels of oil a day.

According to the Interstate Oil and Gas Compact Commission's latest study, Nebraska has 1,498 stripper oil wells that produce about 3.34 barrels a day. In 1999, an estimated 1.828 million barrels of oil came from these low-volume wells. Another 66 wells were plugged or abandoned last year.

Stripper wells are classified as low-volume producers since generally fewer than 10 barrels of oil is pumped each day from the well. More than one quarter of the nation's oil production -- excluding Alaska and coastal areas -- comes from the 423,000 low-volume wells.

An estimated 2.681 million barrels of oil were produced in Nebraska in 1999. This production is valued at $46.14 million when based on an average oil price of $17.21 a barrel.

oil rig
Oil rig

Nebraska ranked 19th in the nation in oil production, 15th in stripper well production in 1999 and 5th in the average daily production per stripper well.

Second Stringers

Nearly two-thirds of the stripper wells in the state use secondary recovery techniques. Pressure in an underground formation pushes oil upward, allowing it to be extracted. In older wells and mature fields, this pressure has diminished over time, decreasing the flow of oil. The recovery techniques used typically include injection of water or gas into the formation, which allows the oil to flow more easily.

Long, Slow Decline

Since reaching a peak in oil production of 24.8 million barrels in 1962, Nebraska's oil output has generally declined. In 1999, only 2.66 million barrels of oil were produced. This is a decline of 16 percent from the 3.18 million barrels produced the year before.

For more information on stripper wells and their part in the nation's energy production picture, visit the Interstate Oil and Gas Compact Commission's web site. The summary of the latest report on stripper wells can be found at Interstate Oil and Gas Compact Commission.

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More Tips for Consumers...

Hot Water Use Can Affect Utility Bills

Water heating is the third largest energy expense in your home. It typically accounts for 14 percent of the utility bill.

There are four ways to cut your water heating bills: use less hot water, turn down the thermostat on your water heater, insulate your water heater or buy a new, more efficient water heater.

A family of four, each showering for five minutes a day, uses 700 gallons of water a week. This is enough for a three-year supply of drinking water for one person. You can cut that amount in half simply by using low-flow, non-aerating showerheads and faucets.

Other Tips

Typical Hot Water Consumption by Place of Use

Here are several other ways to reduce hot water use:

  • Repair leaky faucets promptly. A leaky faucet wastes gallons of water in a short period.
  • Insulate your electric hot water storage tank and pipes, but be careful not to cover the thermostat.
  • Insulate your gas or oil hot water storage tank and pipes, but be careful not to cover the water heater's top, bottom, thermostat or burner compartment. When in doubt, get professional help.
  • Buy a new energy efficient water heater. While it may cost more initially than a standard water heater, the energy savings will continue during the lifetime of the appliance.
  • Although most water heaters last 10 - 15 years, it's best to start shopping for a new one if yours is more than seven years old. Doing some research before your water heater fails will enable you to select one that most appropriately meets your needs.
  • Lower the thermostat on your water heater. Water heaters sometimes come from the factory with high temperature settings, but a setting of 115 degrees provides comfortable hot water for most uses.
  • Drain a quart of water from your water tank every three months to remove sediment that impedes heat transfer and lowers the efficiency of your heater. The type of water tank you have determines the steps to take, so follow the manufacturer's advice.
  • Take more showers than baths. Bathing uses the most hot water in the average household. You use 15-25 gallons of hot water for a bath, but less than 10 gallons during a five-minute shower.
  • Look for the Federal Trade Commission's EnergyGuideTM label. Presently, water heaters are not identified with Energy StarTM ratings.

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The Nebraska Energy Quarterly features questions asked about 6% Dollar and Energy Saving Loans.

Loan forms may be obtained from participating lenders or the Energy Office.

Loans as of September 30, 2000: 16,906 for $125.8 million
Questions and Answers...
Ben Franklin on a $100 bill

5% Dollar and Energy Saving Loans

The Energy Office recently revised its requirement that new ductwork financed with a 5 percent loan be "installed with gaskets or mastic in accordance with manufacturer's installation instructions. Duct tape is not permitted." Why was this requirement added and what are the associated energy savings benefits?

The requirement was added because the 2000 International Energy Conservation Code states "Low-pressure duct systems: All longitudinal and transverse joints, seams and connections of low-pressure supply and return ducts shall be securely fastened and sealed with welds, gaskets, mastic (adhesives), mastic-plus-embedded-fabric systems or tapes installed in accordance with the manufacturer's installation instructions." The Code also stipulates "Duct tape is not permitted as a sealant on any ducts."

The Energy Office's 5 percent loans are used to promote high efficiency, energy saving products and technologies. To achieve those ideals, standards are constantly updated to ensure code requirements are met or exceeded.

Ducts are an integral part of a home's comfort delivery system, carrying cool air in the summer and heated air in the winter. When the system works well, the home and its occupants are kept comfortable. Building inspectors in several states, including Nebraska, have routinely found instances where sections of ducts were never installed, connected or had broken or fallen away completely leaving gaps in the system. A properly assembled system requires the ductwork to be well connected, attached and sealed. National tests indicate a 10-15 percent energy savings for properly sealed ductwork in retrofit work and during new construction.

Are below market rate mortgages still available for the construction of new, single family homes built

Mortgage loans are available at one percent below Freddie Mac rates for new homes in rural Nebraska that are built 30 percent above the requirements of the 1995 Model Energy Code and are completed before June 30, 2001.

Rural counties are defined as all counties in Nebraska except Douglas, Lancaster, Sarpy, Washington and Cass.

Construction loans are available through all participating lenders. Permanent mortgages can be arranged through Security Federal in Lincoln.

A Dollar and Energy Saving Loan is being used to purchase and install a new exterior door and storm door. Since the doors are nonstandard in size, they must be special ordered. The dealer is requiring a down-payment of half the cost of the doors at the time the order is placed. Will loan eligibility be lost if this down-payment is made BEFORE the loan is approved?

If the down-payment is refundable, loan eligibility would not lost. With these loans, borrowers may not contractually obligate themselves to have the improvement made before a loan is approved.

In this situation, since the doors must be custom-made it is probable the down-payment would not be refundable.

In this case, the bid for the new custom-made doors would have to indicate any down-payment received would have be refundable, if the project was not approved for financing.

A number of atypical projects have been financed with Dollar and Energy Savings Loans such as a corn-fueled stove, several types of wood stoves and repairs to wind generators. How do you know if an improvement can be financed with a Dollar and Energy Saving Loan?

For less common types of improvements, an energy analysis is needed to demonstrate dollars saved from the improvement will more than offset the cost of the improvement. Here's how to find out if the improvement can be financed with a loan:

  1. First, get a bid for the energy improvement project you want to make.
  2. Next, get loan forms #32 and #33. (These forms are available from the Energy Office, a participating lender or from the agency's web site:
  3. Gather your energy bills from last year and calculate the amount of energy used by the equipment to be replaced.
  4. Estimate your energy bills for that same task(s), if you were to complete the planned energy improvement, using last year's energy prices.
  5. Subtract the amount of energy dollars you will spend next year if you make the improvements from the amount of energy dollars you spent last year. The difference is what you will save.
  6. Now divide your energy project's total cost by the amount of energy dollars you will save next year. This is the simple payback or number of years it will take to pay back the loan. This number will need to be less than or equal to the number of years for the following types of projects:
    • 15.0 years for home and building improvements
    • 5.0 years for replacement of household appliances
    • 10.0 years for all other projects, including irrigation equipment.
What information will be needed when applying for a Dollar and Energy Saving Loan using an energy audit?
  1. Copies of actual energy bills for fuel and electricity for the previous 12 months.
  2. Copy of bid(s) for the planned energy improvements, which include installation costs.
  3. Completed Form 32 -- Energy Saving Improvement and Analysis -- and Form 33 -- Energy Billing History
  4. Technical data supporting the proposed energy savings needed for review of the project. Technical data can include your calculations, any product bids and specifications, disposition of old equipment and other similar items.
    Note: Irrigation projects usually require additional information.
Double hung window
Double hung
window
How do you know if a replacement window or door can be financed with a Dollar and Energy Saving Loan?

Replacement windows and doors must qualify in one of two ways: either by the window/door tested total "R" or "U" value ratings or by construction features.

For windows and patio doors, the "R" value must be equal or greater than 2.86 or the "U" value must be less than or equal to 0.35. For doors, the "R" value must be equal or greater than 4.0 or the "U" value must be less than or equal to 0.25.

The "R" or "U" value for the new window or door must be a tested value, not computed or simulated. The value must be verified by providing a copy of the test report or a copy of a National Fenestration Rating Council tag (available from the dealer or manufacturer). The stated "R" or "U" value is for the total window or door unit as opposed to "center of glass" values.

U Value
Btus per hour
÷
Square feet of Area
÷
Degrees Fahrenheit
=U Value

"R" and "U" values tell how much heat will flow through a structure, such as a window. The units of the "U" value are British thermal units (Btus) per hour per square feet per degrees fahrenheit or in other words, how much heat in British thermal units will pass through one square foot of a structure, in one hour, for each degree of temperature difference measured from the inside to the outside of the building.

For instance, a one square foot window with Council sticker "U" value of 0.25 with the temperature outside of 63 and the inside temperature of 73 will lose 0.25 times the temperature difference of 10 degrees (73-63) or 2.5 British thermal units every hour.

The "R" value is simply the inverse of the "U" value or 1 divided by "U." So if you have a "U" value of 0.25, the "R" value will be 1 divided by 0.25 or R-4.0. "R" value units then are 1 hour, times square feet of area, times Degrees Fahrenheit divided by Btu.

R Value
Degrees Fahrenheit
X
Square feet of Area
÷
Btus per hour
(or X Hours per Btu)
=R Value

The bid for the replacement windows or doors and Form 2 must also indicate a brand and model number, which coincide with the brand and model number on the test report or Council's tag.

For instance, a bid or Form 2 for replacing double-hung windows cannot be verified with a test or NFRC tag for an entirely different window, such as a casement. Also a test report or Council tag for a solid door cannot be used to verify a door which has a half lite or side windows.

If a test report or Council tag are not available for a particular brand or model, the window or door may qualify based on construction features. In this event, the bid or Form 2 must detail the construction features or indicate a brand and model number which coincide with brand and model numbers on supporting company literature which shows the construction features.

Construction feature requirements for windows include:

  1. A minimum of two panes of glass.
  2. At least one of the two panes of glass must have a low-e coating.
  3. The window must be gas-filled with Argon, Krypton, Carbon Dioxide, SF6 or some combination of these.
  4. The frame must be made of wood, vinyl or aluminum. If the frame is made of aluminum, it must be thermally broken.

Construction feature requirements for doors include:

Construction feature requirements for doors include:

  1. The core material in the door must have an insulating value of at least R-8.0.
  2. Any lite in the door must be double-glazed and cover no more than 10 percent of the door surface area.

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Energy Star logo
Energy Star logo

Energy Star Appliance Sales Surge

According to a leading monitor of sales, Energy StarTM energy-efficient appliance sales increased 31 percent in the first nine months of 2000 over the same period last year. Sales of the energy-miserly dishwashers, air conditioners and washing machines posted gains. The sale of refrigerators declined marginally.

To earn the Energy StarTM label, appliances must use energy more efficiently than the average appliance. Those bearing the Energy StarTM label rank in the top echelon of energy efficiency in the product category, using energy between 13 and 40 percent more efficiently.

washer and dryer
washer and dryer

The purchase of most Energy StarTM refrigerators, dishwashers, freezers and clothes washers can be financed with a low-interest Dollar and Energy Saving Loan.

Retail sales of Energy StarTM dishwashers and air conditioners soared by 66 percent compared to 1999. Washing machine sales increased 11 percent over the same period.

Typically, Energy StarTM appliances command premium prices. However, in spite of the higher prices, the study indicates consumers are shopping for energy efficiency.

Prices of Non-Energy Star vs. Energy StarTM Appliances

Category Average Price of Non-Energy StarTM Average Price of Energy StarTM Energy StarTM Price Premium
Dishwashers $376 $404 7 %
Air Conditioners $257 $279 9 %
Washing Machines $379 $869 129 %
Refrigerators $650 $1,118 72 %

More details on the sales and price differentials can be found at Intelligent Choice.

Dishwashers, air conditioners, washing machines and refrigerators that have earned the Energy StarTM label and can be financed with Dollar and Energy Saving Loans, are listed at Energy Star Products

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Information Services and Resources

telephone icon computer icon letter icon

The Energy Efficiency and Renewable Energy Clearinghouse provides fact sheets, brochures, videos and publications on energy efficiency and renewable energy.

letter icon

Energy Efficiency and Renewable Energy Clearinghouse,
P.O. Box 3048,
Merrifield, VA 22116

telephone icon

Phone between 7am-4pm CT,
Monday-Friday. 1-800-363-3732
or for the hearing impaired call
1-800-273-2957 8am-6pm.
Fax 1-703-893-0400

computer icon

Internet: Office of EERE

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Ongoing


Mission

“The mission of the Nebraska Energy Office is to promote the efficient, economic and environmentally responsible use of energy.”

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Americans with Disabilities Act

In accordance with the American Disabilities Act, the state will provide reasonable accommodation to persons with disabilities.

If you need reasonable accommodation to participate in any program or activity listed in this publication, please contact the Energy Office at 402-471-2186 to coordinate arrangements. Upon request, this publication may be available in alternative formats.

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U.S. DOE Grant

This material was prepared with the support of the U.S. Department of Energy (DOE) Grant No. DE-FG47-92CE60410. However, any opinions, findings, conclusions, or recommendations expressed herein are those of the author and do not necessarily reflect the views of DOE.

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