Homeowners who heat their residences with electricity could face higher energy bills this winter due to rising costs, while those who use fossil fuels for heat will likely see flat or even lower energy bills, according to the Energy Information Administration (EIA).
That voracious demand for power is pushing up electrical costs across the United States. Retail electricity prices are expected to rise by 5 percent this winter, the EIA said.
Monthly electrical expenditures typically spike in the winter months due to increased usage of electrical appliances, such as heat pumps and furnaces. This winter, national monthly costs are predicted to jump to $1,130 nationally, with costs projected to be highest in the Northeast at $1,520 and lowest in the more temperate Southern region at $1,030, according to the EIA.
Heating costs for homes that use fossil fuels are largely derived from commodities prices, the EIA added, and a glut of natural gas and propane heading into the winter months should keep prices flat for those fuels.
“Fuel inventories are an important source of winter supply, and more natural gas and propane are currently stored in U.S. inventories compared with their previous five-year average going into this winter,” the EIA said in its report.
“These relatively high inventories have helped keep prices for those fuels below year-ago levels.”
Natural gas is used for heat in about 46 percent of U.S. homes, making it the most widely used fuel source for heating. The predicted milder winter should lead to a 2 percent reduction in natural gas usage, with monthly natural gas expenditures totaling about $640 across the United States.
Propane is a common fuel source for homes in the upper Midwest and Northeast regions. Monthly propane expenditure for all residences is expected to average $1,210, with prices highest in the Northeast at $1,670. More than 80 percent of homes in the Northeast rely on heating oil, the EIA noted, and average heating oil expenditures are expected to be just under $1,400 per month.
Cost estimates could change if it turns out to be a severe winter, the EIA said.
“In all the weather-related cases we examined, we expect the per-unit price of both propane and heating oil to be lower this winter than last winter,” the EIA told The Epoch Times.
“Storage levels are higher-than-normal, and the price of heating oil is also affected by the low price of crude oil.
“A particularly cold winter would likely have more effect on propane and heating oil retail prices than electricity and natural gas retail prices given the nature of utility regulation and cost-recovery mechanisms for electricity and natural gas utilities. That dynamic explains why our propane and heating oil forecasts have a broader range across weather cases than our forecast ranges for electricity and natural gas.”