Boston vs. Buffalo

The Patriots rolled to victory again last night. The victim this week – the Buffalo Bills.

Football, however, is not the only field in which we appear to have a distinct advantage. It seems, at least according to msn.com, that Boston and Buffalo will be the most and second most expensive cities in which to heat your home this winter. Msn.com surmises that Buffalo comes in at no. 2 on the list because, well, because it’s quite simply a godforsakenly frigid city.

Boston, however, is a different story. We top the list because we rely much more on heating oil than natural gas, whose price has inflated only 72% in the last decade compared to oil’s 234% increase. This obviously begs the question. Shouldn’t the market be responding to such a large discrepancy, more and more homeowners switching from oil to natural gas?

It should be, but it’s not. The reason – though on average natural gas is considerably less expensive than oil, in Massachusetts (and the Northeast generally) natural gas is only marginally less expensive, making the switch, which would require a significant upfront investment by a homeowner, less appealing.

Okay, then that leads to the next obvious question. Why are natural gas prices in Massachusetts higher than in the rest of the country. The answer, according to Msn.com anyway, is

Regional cost differences are governed by the ability of local utility companies to add capacity and meet demand, and how the suppliers are regulated and taxed by the states.

A lack of capacity, combined with regulation and taxes. Hmmm?