Looking for input on master metering economics for apartment buildings in Alaska. I've got a 40-unit complex in Juneau that's currently all-electric with master metering through Alaska Electric Light & Power. The heating costs are brutal - $4,800-$6,200 per month in winter on rate schedule G-1. Property owner is considering converting to natural gas heating with ENSTAR but keeping electric master-metered for everything else. Has anyone done similar conversions in cold climates? The gas infrastructure cost would be around $95,000 but the ongoing savings might justify it with our electric rates at $0.18/kWh.
Alaska apartment heating - electric vs gas master metering costs
Oscar, we don't have your extreme cold here in Ohio but I've worked on several apartment heating conversions with Dominion East Ohio Gas. The key is getting accurate heating degree day data and comparing the thermal efficiency. Electric resistance heating is 100% efficient but expensive per BTU. Natural gas at 80-85% efficiency can still be much cheaper depending on gas prices. With Alaska's gas reserves, your commodity costs should be relatively stable. What's ENSTAR quoting for commercial rates?
Jim, ENSTAR is quoting around $1.85/therm for the first 500 therms, then $1.40/therm above that on their Schedule 4 commercial rate. With 40 units averaging 150 therms each per month during heating season, we'd be well into the lower tier. The conversion would include new gas lines, individual unit heaters, and venting systems. Alaska Electric would still handle the master meter for lighting, appliances, and common areas. Break-even looks like about 6-7 years based on current energy prices.
Oscar, that payback period sounds reasonable for a major infrastructure investment. We've seen similar economics with NW Natural here in Oregon, though our climate is much milder. One thing to consider is whether Alaska has any energy efficiency rebates or tax incentives for apartment conversions. Also check if the electric utility offers any retention rates or discounts to keep the heating load. Sometimes utilities will negotiate rather than lose a large customer. The dual-fuel approach makes sense for reliability too given Alaska's weather challenges.