Yahoo Finance Heating Costs Are Expected to Jump This Winter — Here's What You Should Know to Stay Warm
Getty A person keeping warm in the winter
Winter is coming — and unfortunately, for many this year, that also means a rise in heating costs.
The United States Energy Information Administration recently announced in an October 2021 outlook report that most households will spend more on energy this winter due to the global rise in prices for heating oil, natural gas and other fuels.
Government officials estimated that households could see their bills rise as high as 54% in an attempt to keep their homes warm during a winter that is expected to be "slightly colder than last year in much of the United States."
Nearly half of U.S. households that primarily heat with natural gas are predicted to spend, on average, 30% more than they did last year, the report stated. If the winter is 10% colder than average, that number is expected to rise to 50%. However, if the winter ends up being 10% warmer than average, experts say the bill will rise by 22%.
With those statistics in mind, homeowners may spend approximately $746 this winter on heat, the report stated. The change could mark the highest heating bills for natural gas users since the winter of 2008-2009, according to Time.
Getty A winter snowstorm
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Similar findings were made in the report for homes that heat primarily with electricity, propane and heating oil.
For the 41% of U.S. homes that use electricity to heat, it is estimated that their bill will only rise by 6%. In the event it's a colder winter, the number will rise to 15% and drop to 4% if it's a warmer winter, according to the report.
Households are also expected to spend an average of $1,268 this winter on electricity bills, which is 6% more than last winter, the report stated.
In the 5% of U.S. households that rely on propane as their source of heat, people will spend 54% more ($631 total), with that number rising to a whopping 94% in the event of a colder winter and 29% more in a warmer winter, the report said.
Lastly, the 4% of homes that use heating oil are predicted to spend 43% more on their bills, with the number rising to 59% in a colder winter and 30% in a warmer winter, per the report.
Getty A person staying warm with a hot drink
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Given higher crude oil prices and higher refining margins than last winter, government officials said they expect homeowners to spend an average of $1,734 on warming their homes with heating oil.
"Retail prices for energy are at or near multiyear highs in the United States," officials wrote, noting that the jump in price was due to the changes in energy supply and the demand patterns from the COVID-19 pandemic.
"Even when we vary weather expectations, we expect the increase in energy prices as the United States returns to economic growth to mean higher residential energy bills this winter," they added in the outlook report.
As the anticipated colder winter nears, experts are also concerned about how the rise in bills will impact low-income households.
Carol Hardison, the CEO of Crisis Assistance Ministry, a Charlotte, North Carolina-based financial hardship assistance center, told Time that some households have come in with unpaid bills that were approximately twice as much as they were before the pandemic.
"After the beating that people have taken in the pandemic, it's like: What's next?" Hardison said, noting that this population has also been slammed by an increase in housing costs, medical bills and a reduction in work hours.
"It's what we know about this pandemic: It's hit the same people that were already struggling with wages not keeping up with the cost of living," she added.
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In a September survey by the U.S. Census Bureau, researchers found that nearly 22% of Americans were forced to reduce or forego expenses for necessities like medicine or food in order to pay an energy bill in at least one of the last 12 months, the Associated Press reported.
"This is going to create significant hardship for people in the bottom third of the country," Mark Wolfe, the executive director of the National Energy Assistance Directors' Association, told the AP. "You can tell them to cut back and try to turn down the heat at night, but many low-income families already do that. Energy was already unaffordable to them."
SMO Energy, one of the leading providers of heating and cooling services on the East Coast, suggested that people who are concerned about their heating bills save money by bundling up, using solar power, getting an energy audit, installing a smart thermostat and adding insulation to their homes.
