Home Heating Costs Expected to Rise for All Sources this Winter
The Energy Information Administration (EIA) recently published its Winter Fuels Outlook report for the 2022-23 winter season. Though multifaceted, the EIA suggests a combination of global macroeconomic conditions, rising fuel costs, and weather conditions will result in increased home heating expenses for those in the United States.
In the report, the EIA utilizes proprietary data in tandem with data from national organizations, like the National Oceanic and Atmospheric Administration (NOAA), to develop multiple plausible scenarios for winter heating fuel demand, weather conditions, and market conditions. The scenarios used for the analysis simulate three different weather possibilities; a base case, a 10 percent colder winter than the base, and a 10 percent warmer winter than the base.
In each of these cases, home heating costs increase from last year. Natural gas-based heating shows the highest potential for price variability, with prices increasing in each case by double-digit percentages. At the least, the 10 percent warmer case shows a 19 percent cost increase; at most, the 10 percent warmer case indicates a 51 percent increase from last season. If this upcoming winter is similar to last year, costs are expected to rise by 28 percent.
For those who use electric home heating in which natural gas is the main fuel for electricity generation, prices are also expected to rise, but to a lesser extent. In the event of a 10 percent warmer winter, costs are expected to rise by 8 percent. Costs increase by double-digit percentages in both the base and 10 percent colder cases, rising by 10 percent and 20 percent respectively.
Homes heated using traditional heating oil, as with all other fuel sources, should expect to spend more as well, as the year-over-year cost increases in each case fall slightly below natural gas. For the base case, 10 percent colder, and 10 percent warmer scenarios, consumers should expect a 27 percent, 40 percent or 15 percent increase, respectively.
These increases are linked to increasing fuel prices at the market, global inflationary pressures, and a colder-than-normal winter weather forecast.
Pennsylvania’s Public Utility Commission (PUC) has urged those in the Commonwealth to prepare for higher prices by contacting their service providers to discuss more economical options, as well as providing tips for reducing energy usage this winter. In its press release, the PUC also notes the coming adjustments to the “price to compare”, or PTC, which is the cost of energy generation for electric or natural gas and makes up 40 to 60 percent of a customer’s total utility bill.
Most electric and gas suppliers have or will see substantial increases, and consumers need to be aware of the higher bills headed their way.