The government on Tuesday forecast that most households will pay more for heat this winter. Heating oil users could catch a slight break but still pay near-record prices to keep warm.
Staff and news services
Prices for natural gas, electricity and propane should be higher, the primary reason that more than 90 percent of U.S. homes will incur higher heating expenses.
Natural gas users will see the biggest percentage increase after two years of historically low prices. Their heating bills should rise to an average of $679, the Energy Department said in its annual outlook for heating costs. That is about 13 percent higher than a year ago but still 4 percent below the average for the previous five winters.
In the Kansas City area, the main gas utilities Missouri Gas Energy, Kansas Gas Service and Atmos usually dont offer estimates comparable to the Energy Departments. But last month they did say that customers probably would see minimal increases in their heating costs, so area household bills might not rise as much as the national forecast.
In fact, Atmos spokesman Jim Bartling said Tuesday that his utilitys cost-of-gas charge for October was $4.23 for a thousand cubic feet, down from $4.86 in September and less than costs last winter. Couple that with adequate supplies and he said Atmos customers had a chance to not have to pay more this winter than last.
Nationally, just over half of U.S. households use natural gas for heating. Many of the 38 percent of U.S. households that use electric heat live in warm regions where heating demand is not high. Only 6 percent use heating oil, but those homes tend to be in New England and New York, where winter heating needs are high.
Homes relying on electricity for heat, about 38 percent of the U.S., are likely to pay about 2 percent more compared with last year, the Energy Department said.
For heating oil customers, there is good news and bad. Their average bill should drop 2 percent. But they will still pay an average of $2.046, the second highest on record, behind last years $2,092.
Some analysts are concerned about a spike in heating oil prices. Thats because the fuels that refiners make alongside heating oil, including diesel and jet fuel, are in high demand around the world and inventories are low.
If theres one type of product that could catch fire and go higher, its heating oil, said Tom Kloza, chief oil analyst at the Oil Price Information Service and GasBuddy.com.
The Energy Department expects temperatures in the Northeast to be about 3 percent colder than a year ago, resulting in a 3 percent increase in consumption of heating oil. Bills will be lower, however, because the average price for heating oil will drop to $3.68 a gallon from $3.87. About 25 percent of homeowners in the Northeast use oil for heat.
Mark Wolfe, executive director of the National Energy Assistance Directors Association, which advocates for heating assistance for low income families, worries that high heating oil prices, colder weather and cuts in federal heating assistance will leave more families vulnerable.
In 2010, Congress set aside $5.1 billion for heating assistance. This year, Wolfe is expecting $3 billion.
Two years ago we could help close to 2 million more families than we can now, Wolfe said.
The Energy Department predicts that heating demand will fall 0.3 percent nationwide. The Northeast is expected to experience the biggest increase, up 3.4 percent, while the West is expected to see demand drop 3.1 percent.