Page 16 - sept-oct 2019

You Must Know How To Compare Energy Costs

When Making A Sale

For most consumers, there is no obvious way to compare actual energy costs
since propane, natural gas and electricity are measured in different units. How-
ever, with lower propane prices making our product more competitive, now is
the time for you to brush up on your conversion skills to help customers under-
stand the value of clean, American propane. It goes without saying: know the
final answer before you invite your customers to make the calculation!
The first step is to convert specific energy sources into a common unit of com-
parison. British Thermal Units (BTU) are the easiest to compare:

Propane 1 liquid gallon = 91,500 BTU
Electricity 1 kilowatt hour = 3413 BTU
Natural gas 1 cubic foot = 1000 BTU

It is important to make a fair and complete comparison. Using the entire cus-
tomer utility bill and the entire propane bill is essential. Be sure to count all the
utility add-on costs and any additional fees that may appear on your bill.

Electricity vs. Propane

For example: Mrs. Smith used 718 KWH of electricity and her bill was $64.12. That
equals 2,450,534 BTU (718 x 3413). Divide the BTU total by propane’s BTU content
to find out how many gallons this equals. Therefore, 2,450,534 divided by 91,500
equals 26.78 gallons of propane for the same amount of energy. Divide the total
electric bill by the total gallon equivalent to find the per-gallon cost. To break
even with electricity in this example, propane would need to sell for $2.39 per
gallon.

Show your math:
718 KWH x 3413 (BTU per KWH) = 2,450,534 total BTU
2,450,534 divided by 91,500 (BTU of one gallon of propane) = 26.78 gallons
Bill of $64.12 divided by 26.78 gallons equals a break-even price of $2.39

Natural Gas vs. Propane

Now let’s look at natural gas. Make sure to identify which unit of energy is being
shown on the bill. It will either be cubic feet (1000 BTU) or therms/units (100,000
BTU). Once again, include ALL the charges. Utilities will pass along the commod-
ity charge (the cost of gas) at a small markup and their customers have been

16 Alabama Propane Gas Association | September / October 2019