Mixed Outlook for Winter Heating Costs, EIA Says

How you heat your home and where you live will be big factors in how much you pay this winter for fuel, as the cost of certain energy sources is falling while others are rising.

The U.S. Energy Information Administration recently released its Short-Term Energy Outlook and Winter Fuels Outlook, both of which found that homes using heating oil will see a big jump and those with electric heat also will see an increase, while those using natural gas and propane will see decreased costs.

The reports also noted that the amount of the increase or decrease will vary depending on the region of the country in which you live. The EIA expects national average temperatures to be similar to last winter, but it assumes warmer temperatures in Northeast, which suffered through a very cold winter last year, and colder temperatures in the West, which saw warmer temperatures last year. However, it notes that an expected El Niño weather pattern could cause could change those assumptions.

The good news is that households that heat with natural gas or propane, about half of those in the U.S., should see a decrease in energy costs this winter, the EIA projects. The bad news is that energy expenditures are expected to increase by about 21% for homes using heating oil. This takes in about 3% of U.S. households located mostly in the Northeast.

Approximately 40% of homes heated with electricity will also see an increase of about 4%.

Households using natural gas are expected to spend about $640 for the winter, a 9% decrease compared to last winter due to lower fuel prices. Those using propane will spend about $1,246, a 3% decrease nationally.

However, those using heating oil will see bills of about $2,115, a 21% jump. This is being driven by higher crude oil prices, tight supplies, and reduced refining activity due to the conflict in Iran and other geopolitical energy shocks.

Households heating with electricity will spend about $1,196, a 4% increase nationally, but with significant regional differences. In Pennsylvania and other Mid-Atlantic states in the PJM regional grid, electric prices have been increasing significantly due to rapidly increasing demand from data centers at the same time that some fossil-fuel fired power plants have retired and new generation is not coming online quickly. Homes in many states within the PJM grid are likely to see higher electric bills during the winter months.