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A New Approach to Natural Gas for Multi-family Construction: KRE Madison Farms

20 Jun 2018


Synonymous with luxury, multi-family developers and builders are beginning to recognize the value that natural gas appliances bring to their properties. Past and current philosophies dictate that they be eliminated from final specs due to cost, aesthetic and ventilation constraints, however the overwhelming benefits of natural gas appliances – such as higher property values, greater demand and higher ongoing tenant satisfaction – necessitate a reconsideration for a creative solution.

A forward-thinking developer of luxury properties, the KRE Group began their endeavor to incorporate natural gas appliances as a best practice in their multi-family properties with Madison Farms, a high-end community in the Lehigh Valley. Ingenuity, planning and rebates offered by UGI Utilities resulted in a successful pursuit and an adoption of new best practices.

Current Practices

Previous home heating and cooling methodologies for similar multi-family properties caused developers to face challenges in meeting ventilation requirements or they compromised the overall building and design aesthetics.

A common heating practice in many multi-family units is to utilize a single package vertical unit (SPVU) along an exterior wall for heating and air conditioning, combined with a standalone water heater. While natural gas
SPVUs are available, their electric counterparts are cheaper due to their lack of required piping.

Although the cost and installation of electric equipment can be cheaper in the short run, developers miss out on the opportunity to increase tenant satisfaction and retention afforded by natural gas through lower utility bills, an enhanced cooking experience, and the option of adding upgrades such as luxurious gas fireplaces.

Solution: Space Saving Equipment + Nonresidential Custom Rebate Program

KRE approached UGI with a proposal to size an ENERGY STAR® natural gas tankless water heater for both water heating and radiant space heating. This solution also offered space to utilize a wall-mounted air-conditioning unit, which were both tucked neatly in an exterior storage closet. This location mitigated the venting concerns while satisfying a clean aesthetic requirement. An alternative solution that could also be utilized by multi-family developers is a combi-boiler for both space and water heating.

Through UGI’s Prescriptive Rebate Program, a $400 rebate is available for an ENERGY STAR natural gas tankless water heater. Because these units also handled apartment space heating, there was sufficient overall energy savings to qualify for UGI’s Nonresidential Custom Rebate Program, which offered an additional rebate of $100/unit. In total, UGI provided $167,500 in Save Smart Rebates to KRE for the Madison Farms Development.

Results: A New Official Practice

In the fall of 2017, KRE made the innovative heating and water heating system solution utilized at Madison Farms the official protocol for all new building constructions. Not only were the aesthetic and ventilation concerns satisfied, the costs of installing natural gas piping was significantly offset with the UGI Save Smart Rebate Program. Most importantly, the solution enabled KRE to offer their tenants at Madison Farms the many benefits of natural gas.

With the learnings from Madison Farms, KRE has construction underway on a new complex in Bethlehem, Pennsylvania that will utilize the same rebate offers.

“Having lower utility bills by installing natural gas and energy efficient equipment is a great way to keep our tenants happy and living in their apartments for longer periods of time”

– Jerry Fallon, Project Manager, KRE Group