Trends, Reports & Analyses
Mild Winter Good News for Billpayers
The unusually mild start to winter has prompted the Energy Department to slash its expectations of what consumers will pay to stay warm this year.
The mild start to winter has left snowmobilers in upstate New York with no place to go, but it should slash the cost of home heating. (AP Photo/David Duprey)
In an update issued Jan. 10, the department’s Energy Information Administration said it expects the average household that relies on electricity to spend 2 percent less than it did last winter.
Natural gas and propane expenditures are now projected to fall by 7 percent and 1 percent, respectively, EIA said.
“The forecast of average household heating expenditures for all heating fuels has been lowered from the first forecast for the current winter,” EIA said, “primarily as a result of the warm first half of this heating season.”
The numbers represent a U-turn from the agency’s October forecast, when it predicted spending on electric heat would drop by less than 1 percent this winter, while natural gas expenditures would jump by 3 percent, and propane by 7 percent.
The average household that relies on electricity will pay about $934 this winter, compared with the $957 it paid in 2010-11. That masks wide regional variances in the cost of electric heat—EIA puts expenditures for Midwestern households at $1,073 and Southern households at $891. But they all are down from last winter, the agency said.
Overall, the update forecasts average U.S. residential electricity prices will show only a minimal rise through the end of 2013.
An average household that uses natural gas for heating will pay $671 this winter, compared with $724 last season. EIA said falling natural gas prices are also responsible for the decline. Natural gas inventories are at record levels, and the agency expects spot prices for natural gas contracts to decline by about 12 percent in 2012.
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Tags: Department of Energy, Energy Information Administration, Natural Gas, Power Rates, Trends Reports and Analyses