Colder weather could boost heat­ing bills

Daily Local News (West Chester, PA) - - BUSINESS - By David Koenig

Ex­pect to pay more to heat your home this win­ter than you spent last year.

That’s the mes­sage from govern­ment an­a­lysts who sifted through fore­casts for a colder win­ter and slightly higher en­ergy prices.

The En­ergy De­part­ment said Thurs­day that house­hold bills are likely to be higher for all four main heat­ing fu­els — nat­u­ral gas, elec­tric­ity, heat­ing oil, and propane.

Last win­ter, above-nor­mal tem­per­a­tures re­duced na­tion­wide de­mand for heat­ing fu­els to the low­est level in at least 25 years. For most re­gions out­side the West, this win­ter is ex­pected to be more typ­i­cal — colder than last win­ter al­though still milder than many re­cent ones, ac­cord­ing to fore­cast­ers with the Na­tional Oceanic and At­mo­spheric Ad­min­is­tra­tion.

If win­ter turns out to be colder than ex­pected, how­ever, heat­ing bills could soar.

In Port­land, Maine, Wil­liam Foss had in­su­la­tion wrapped around his heat­ing ducts this sum­mer and set aside money to sur­vive Maine’s fickle win­ter weather and volatile fuel mar­ket. He usu­ally tops off his 275-gal­lon oil tank about three times, some­times with help from fed­eral sub­si­dies, and he was rat­tled by the fore­cast of higher heat­ing bills.

“Right now, I’ve been think­ing I’m go­ing to be OK,” the 69-yearold said. “There’s not much we can do about it if the weather turns cold all of a sud­den.”

Here is the En­ergy De­part­ment fore­cast for av­er­age house­hold heat­ing bill from Oc­to­ber through March:

• Nat­u­ral gas: up 22 per­cent, or $116, to $635 on a na­tional av­er­age. How­ever the av­er­age bill in the North­east is ex­pected to rise 29 per­cent, or $198, to $889. If win­ter is colder than NOAA pre­dicts, the in­creases would be 31 per­cent na­tion­ally and 38 per­cent in the North­east. Nearly half of all Amer­i­can homes are heated with nat­u­ral gas. The price of gas is ex­pected to rise a mod­est 11 per­cent over last win­ter, but still that would be the high­est av­er­age win­ter price in six years.

Pipe­line bot­tle­necks have slowed the de­liv­ery of gas to the North­east in past years. The en­ergy agency said that more gas from Penn­syl­va­nia will be avail­able for New Eng­lan­ders this win­ter due to a new pipe­line ex­pected to open next month.

• Heat­ing oil: up 38 per­cent, or $378, to an av­er­age $1,370.

Only 5 per­cent of U.S. homes use heat­ing oil, but it warms nearly one-fourth of homes in the North­east. The bad news for them: The re­tail price is up by 42 cents per gal­lon, or 20 per­cent, since last win­ter be­cause of higher crude prices. And if the weather fore­cast is right, North­east res­i­dents will burn more oil.

James Bam­bino, man­ag­ing ed­i­tor of S&P Global Platts, which tracks en­ergy prices, said he is telling friends to lock in their heat­ing-oil prices now.

Prices aren’t likely to fall much be­cause in­ven­to­ries are rel­a­tively high, Bam­bino said. But, he added, “if Fe­bru­ary rolls around and there’s a mas­sive cold snap and ev­ery­body needs to buy heat­ing oil from the same dis­trib­u­tor, then the prices go up.”

• Elec­tric­ity: up 5 per­cent, or $49, to $945 due to higher con­sump­tion. Rates are ex­pected to be flat.

Nearly 40 per­cent of U.S. house­holds heat with elec­tric­ity in­clud­ing more than 60 per­cent in the South. In New Eng­land, more power is now gen­er­ated with nat­u­ral gas, mak­ing heat­ing with elec­tric­ity com­pet­i­tive with sim­ply burn­ing the gas to stay warm.

• Propane: Lower than most years, but higher than last win­ter, when tem­per­a­tures were mild and prices low.

In the North­east, the fore­cast calls for an av­er­age in­crease of $346, or 21 per­cent, to $1,991; in the Mid­west, it’s $290 more, or 30 per­cent, to $1,272.

• Wood and wood pel­lets: used to heat about 2.5 mil­lion U.S. homes in­clud­ing one-fifth of ru­ral house­holds in New Eng­land. The en­ergy agency didn’t of­fer a cost fore­cast. It is im­por­tant to re­mem­ber that the fig­ures are av­er­ages. The na­tional es­ti­mates in­clude Michi­gan and Min­nesota but also Texas and Ari­zona, where peo­ple put on parkas if the tem­per­a­ture dips below 60.

And they in­clude all kinds of dwellings — a con­sumer with a 3,500-square-foot house is likely to pay more than the av­er­age, while an apart­ment renter will usu­ally pay less.

For the in­di­vid­ual con­sumer try­ing to bud­get, it is more help­ful to look at the ex­pected in­crease in per­cent­age terms and ap­ply that to his or her bill, said En­ergy De­part­ment spokesman Tim Hess.

In this file photo, Den­ver Walker, of Som­er­set Fu­els, makes a heat­ing oil de­liv­ery to a home in Jen­ner Cross­roads, Pa.

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