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    Monday, May 13, 2024

    EIA says home heating expenditures are lower than expected

    Following up on predictions it made last fall, the United States Energy Information Administration says the average homeowner should save more on heating costs than previously anticipated.

    The EIA, which provides official federal statistics on energy matters, said in October that homeowners would likely save on their heating bills due to lower energy costs and a warmer winter. This forecast, outlined in EIA's "Winter Fuels Outlook," is based on the National Oceanic and Atmospheric Administration's prediction for heating days between October and March as well as EIA's predictions on fuel costs.

    Temperatures in the states west of the Rocky Mountains have been colder than last year and slightly below the NOAA forecast. EIA says the winter of 2015-2016 is now expected to be 15 percent warmer than the previous winter when considered on a national level.

    In October, NOAA predicted that heating days would decline by 13 percent in the Northeast, 11 percent in the Midwest, and 8 percent in the South. NOAA also predicted that the winter in the West would be about 12 percent colder than the previous year's relatively warm temperatures.

    Based on this forecast, EIA predicted that homeowners would save money on each of the four most common heating sources in the United States. Compared to the previous year, it expected an average savings of 25 percent for those using heating oil, 18 percent for those using propane, 10 percent for those using natural gas, and 3 percent for those using electricity.

    The Winter Fuels Outlook in October noted that heating oil is most prevalent in the Northeast, used by 23 percent of the homes in the region. It predicted that the typical homeowner would save $459 compared to the previous winter.

    In its mid-January update, EIA says it originally based this forecast on the expectation that retail prices for heating oil would be 15 percent lower than the previous year. The agency says the decline in crude oil prices has led to retail prices that average 29 percent less than the previous year, meaning the average home using heating oil will save $760—or 41 percent—compared to the previous winter.

    Natural gas is the most common source of heating in the United States, used in nearly half of the nation's homes. The October report suggested that the typical homeowner using natural gas would save $64 compared to the previous winter.

    This prediction suggested that the cost of natural gas would be 4 percent lower than the 2014-2015 season. EIA's Short-Term Energy Outlook for January found that costs are actually 6 percent lower. The agency says the average homeowner using natural gas is now expected to save $110, or 17 percent.

    Propane users were expected to save $322 on average. EIA originally predicted that expenditures for this fuel would drop by 15 percent in the Northeast and 21 percent in the Midwest. Based on the latest Short-Term Energy Outlook, it now suggests that expenditures will be 24 percent lower in the Northeast and 31 percent lower in the Midwest.

    EIA says savings for electric heat are harder to anticipate, since prices change more slowly than those for other heating fuels. As a result, changes in expenditures are governed more by the number of heating days.

    Households with electric heat in the Northeast, Midwest, and South are expected to save 9 percent on their heating costs compared to last winter. The original prediction suggested that expenditures in these regions would be 5 percent lower.

    Due to the colder than expected temperatures in the West, EIA now expects electric heat expenditures in the West to increase by 9 percent over the previous winter. The agency originally predicted a 4 percent increase in these costs.

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