Community Propane (Howe: 2013, HOA, appliances)

[hoffdano]

Originally Posted by austin-steve

I tend to agree with this. But there are two ways to look at it:

1) The philosophical stance.
2) The economic equation.

I just don't like feeling ripped off, which would tilt me to #1.

But I'm also pragmatic. If I simply add up ALL the costs associated with living in a given home in a given location, including commuting costs, property tax rates, maintenance, etc., the propane, high, low or non-existent, would be just another number in the "Utilities Expense" category that factors into the equation, and I might treat it without emotion.

It will definitely cost you more than regular gas service from Texas Gas. Especially if you want to run a gas log fireplace. But maybe there are pluses to living in the community that outweigh it for you.

Steve

You're right - it ultimately comes down to whether you are willing to be gouged, without any alternative, because you like the neighborhood enough.

But for me - I will not reward any entity that attempts to limit my choices for energy via a sweetheart private agreement. Even worse in some of these communities - they don't even allow you to choose the energy source for your appliances (e.g. Rough Hollow).

I am not convinced BTW that propane, especially price fixed "community" propane, is cheaper than electricity. My home is electric, and for 3500 sq. ft. have never had a heating bill over $400.

We all have our hot buttons and this is one of them.

[andrewtodd3]

Thank you for all of the replies.

I think I'll be avoiding community propane then. If the figures I've been reading are accurate I could probably spend an extra $90,000 on a home and still be better off if I avoid community propane.

I'm from San Diego and the main reason for considering Austin is that it's a great city with a low cost of living. When you start to pay $450 for gas along with high property taxes (In places like Rough Hollow) the benefit of the low cost of living starts to disappear. We'd accounted for the high property taxes but not the crazy gas prices.

We are looking for a new home at around 3200 sq/ft in size. We love the Highland homes houses in Rocky Creek but it seems they too suffer from very strict HOA restrictions.

[Tralfaz]

I'd check out Oak Hill (SW Austin) and see if you can find a house or lot with natural gas hookup, I lived in a rental house by Scenic Brook that had gas and it was pretty inexpensive.

However, if you're building new, I'd skip a gas hookup and go all electric with modern insulation, induction cooking and solar.

[IC_deLight]

Originally Posted by scm53

It is almost five miles from Ladera to Sweetwater. Don't see how that materially reduced the cost. And if Ladera got it now, why didn't Falconhead when it was built?

And who pays the capital cost? The developer? Or Texas Gas? And is that cost from the closest line, or just the delivery system inside the development?

Not trying to be argumentative - just a lot I don't understand about why anyone has a central propane system - with all the negative that goes with that.

scm53 your question ignores the obvious. These aren't "communities" and the homeowners didn't "choose" this. In the earlier subdivisions, Southern Union Gas and the developer entered into agreements that did not necessarily preclude homeowners from utilizing something other than the central gas system. However, the developers generally had no intention of allowing homeowners to "choose" anything differently. Later on, other propane vendors worked deals with developers to i) mandate gas appliances, and ii) preclude homeowners from using any other propane vendor.

These are always HOA-burdened properties. The developer (and later on fellow homeowners and HOA vendors) use the HOA corporation to threaten the homeowners with fine and foreclosure if they try using an alternative gas source. The central gas systems were intended to be residual income streams into perpetuity for the developer. A typical contract would usually provide for the developer to get 9%-12% of revenues of gas sold less the cost of the gas. Similar to a royalty based on the amount of gas passing through the lines.

The scheme also usually employs an "architectural committee" from which the homeowner will have to get approval from. You can bet that the developer receiving a cut of sales is NOT going to approve individual tanks due to the threat to the perpetual income stream. The homeowners are no better - these things tend to end up with people that "believe" the restrictions were actually written for their benefit, hah hah hah.

Finally, this is so against the grain of expectations of buyers that folks never thought this was something they would need to inquire about. It's kind of like being told if you move there you will only be allowed to gas up your car at a particular gas station no matter what the price - and if you gas up elsewhere your car (or your house) will be taken away from you. As information about these places gets out there more buyers become aware of the racket. It's an intrusion both on your use and enjoyment and re-sale. You have zero say on the price of the gas plus you have to pay monthly "account fees" regardless of whether you use any gas at all. These fees can all go up without your consent.

This is a significant problem in central Texas. There are easily over 80 subdivisions with the central propane gas scheme. Propane gas can be a great thing - but these HOAs are used to create economically unregulated monopolies where homeowners are forced to purchase from developer-designated vendors into perpetuity under threat of fine and foreclosure on their homes.

[llkltk]

What's the monthly price difference. For example, a 3200 square foot house would have a 150 gas bill in the winter. What would be the propane difference?

[IC_deLight]

Originally Posted by llkltk

What's the monthly price difference. For example, a 3200 square foot house would have a 150 gas bill in the winter. What would be the propane difference?

The price of natural gas is economically regulated, the price of propane is not. Moreover the propane vendor doesn't need to worry about competition since the homeowners have no choice but to purchase under threat of fine and foreclosure on their home.

You could compare based on energy content perhaps but without knowing the number of cubic feet $150 paid for it is difficult to compare.

Consider these references:
Propane Vs. Natural Gas - A Comparison
Texas Natural Gas Prices

What is the price per thousand CF for natural gas?
Using the latest in the chart from the second link above, you are looking at $18.55 per thousand cubic feet. Based upon that you used about 8.08 thousand cubic feet of natural gas which has approximately 1,030 BTU per cubic foot. So it would appear your energy needs were about 8.33 million BTU.

Propane has about 2,516 BTU per cubic foot. 8.33 mill/2516 = 3310 cubic feet of propane to meet the same energy demand. Propane is marketed in gallons. The conversion factor between cf and gal is 36.38 cf/gal (based on a number of assumptions). Using the conversion, 3310/36.38 = about 91 gallons of propane.

Don't know what the price charged in the particular subdivision that you are dealing with is, however, assume that it is "market price" (it won't be) just for purposes of comparison. At the time this was written, residential gas (in a free market) was about $2.80 per gallon.
US Residential Propane Price

$2.80 * 91 gallons = $255. You'll need to add the monthly "account fee" of $15 to get to $270. If the price per thousand cubic feet of natural gas is less than $18.55 or if the price in the monopoly system for propane greater than $2.80, the disparity will be higher.

Feel free to provide details from your bill as to price per thousand cubic feet for natural gas or at least total cubic feet of natural gas in order to make the estimates more accurate.

[10scoachrick]

Originally Posted by llkltk

What's the monthly price difference. For example, a 3200 square foot house would have a 150 gas bill in the winter. What would be the propane difference?

Earlier in one of these conversations, I checked on our gas bill for two winter months last year...in our 3600sq ft house with gas heat, water heater(s), dryer, cooktop and fireplace. We were much closer to $100/month. No kids in the house, but we weren't particularly conservative with hot water or heat(no more than usual).

[hoffdano]

As long as I am not forced to consume propane, community propane is merely irritating. If I must use propane for energy, then I would be a raving mad man.

I would rather have no gas whatsoever than be force to do anything energy wise. I could always get my own propane tank if that is what I wanted.

[Roadking2003]

Originally Posted by andrewtodd3

Hi,

My wife and I are planning to move to Austin and are trying to make a list of communities for consideration. I've done a lot of research on City-Data and have concerns regarding reports of extremely high community propane costs.

I have not seen any posts from the last 12 months and wondered if this is still an issue.

Many thanks

I've had propane for 10 years and have no problem with costs or with changing propane service companies. I suggest you get some facts before concluding that propane is not a good choice.

[Roadking2003]

Originally Posted by IC_deLight

The price of natural gas is economically regulated, the price of propane is not. Moreover the propane vendor doesn't need to worry about competition since the homeowners have no choice but to purchase under threat of fine and foreclosure on their home..

Don't you have that backwards? Nobody with natural gas can choose suppliers. I can change propane suppliers every month if I choose to.