Feeling the heat of high utility bills this winter
Global pressures, higher natural gas prices leading REC and other utilities to seek higher rates
On Christmas Eve 2022, temperatures in central Virginia hit a low of 8 degrees, 17 degrees below the record in 2021, according to the National Weather Service.
That and several other arctic blasts this winter came amid global conflicts like war in Ukraine that have strained natural gas supply in the U.S. At the same time, there has been an increase in the use of natural gas to generate energy for the electric grid as more and more coal-fired plants come offline.
As a result, the U.S. Energy Information Administration predicted in October that natural gas bills in the South could increase during the October to March winter season by $761, or 24%, compared to the year before. Some 28% of homes in the South rely on natural gas for heat.
For homes relying on electricity for heat, bills could increase by $1,249, or 12%. About 65% of homes in the South rely on electricity for heat.
Virginia has eight investor-owned natural gas providers, two large electric utilities and 13 electric cooperatives, including Rappahannock Electric Cooperative, that are regulated by the State Corporation Commission. There are also three municipal governments — Richmond, Danville and Charlottesville — that provide natural gas and are regulated by their city councils.
In filings with the State Corporation Commission and interviews with the Mercury, all gas and electric providers have acknowledged that global price pressures on natural gas are affecting customers’ bills.
“Like other businesses and families, REC has faced significant challenges related to inflation and supply chain barriers,” Rappahannock’s electric utility said in a statement. “While your Cooperative works year-round to keep costs down, the expenses related to maintaining a reliable electric grid continue to increase.”
Last October, REC filed an application with the Virginia State Corporation Commission seeking approval to increase the rate charged for distributing electricity by about 4% for residential member-owners. The new rate became effective in January and translates to about $7.78 for an average customer.
All of Virginia’s electric and gas providers have assistance programs for customers to help alleviate the burden of rising bills. Millions of dollars are also available through state assistance and energy efficiency programs.
LENDING A HAND
All of the utilities offer varying levels of energy assistance, from monthly bill payment plans to weatherization programs.
On a larger scale, the state offers several ways to help with utility payments.
Utility customers in crisis or emergency situations can get financial help like bill payment assistance, security deposit coverage and fuel assistance funding to help pay for heating bill costs through the Virginia Department of Social Services.
Typically, $7 million in federal funds are allocated for crisis benefits, which are available to people facing a utility cutoff or broken heating equipment, according to an email from DSS. There were almost 1,000 applications for crisis assistance between the program’s opening in November and late December.
For fuel assistance, Virginia typically gets $45 million through the federal Low Income Housing Energy Assistance Program, or LIHEAP, said the department, but this year it got $50 million. That money is funneled into a state program called Energy Assistance. There were 128,000 applications for fuel assistance this year, with over 107,000 approved by late December.
“The number of applicants for fuel assistance has increased about 5% over last year,” said the department in its email. In recent years, about 10% of Virginia households that use natural gas as a heat source have gotten fuel assistance. Overall, about 65% of funding recipients use natural gas.
On the weatherization side, the Department of Housing and Community Development oversees Virginia’s Weatherization Assistance Program, which provides financial assistance for home improvements such as heating and cooling upgrades and insulation installation or air sealing to ensure heat is generated efficiently and contained within a home.
On the federal level, the recently passed Inflation Reduction Act offers a variety of tax credits to install new, more efficient technologies like heat pumps.
But a decision to electrify a home depends on a family’s economic circumstances.
“It’s something that [low-income] families can’t actually afford to do,” said Dana Wiggins, director of the Center for Economic Justice at the Virginia Poverty Law Center..
In-depth: An expanded version of this story is online at rappnews. link/vvd