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    Monday, May 06, 2024

    Energy agency expects lower heating costs this winter

    Homeowners in the United States should get a welcome break on their heating bills this winter, according to the U.S. Energy Information Administration. The EIA says it is basing this prediction on the anticipation of both lower fuel costs and warmer temperatures during the season.

    The expected savings range from $30 to several hundred dollars. The EIA defines the heating season as between October and March, and says the cost to keep a home warm should be cheaper than the past two seasons.

    The EIA cautioned that individual heating bills are largely dependent on the size of the home as well as its energy efficiency. Other factors affecting local energy costs include the size of the market, weather conditions, and thermostat settings.

    Part of the prediction derives from the National Oceanic and Atmospheric Administration's forecasts for winter weather. NOAA suggests that temperatures in the Northeast will be 13 percent warmer than last year, 11 percent warmer in the Midwest, and 8 percent warmer in the South. After an unusually balmy winter last year, temperatures in the West are expected to be 12 percent cooler.

    The EIA says that these forecasts are based on current indicators that temperatures in the United States will be warmer than the 10-year average. Since winter weather can be unpredictable, the organization's Winter Fuels Outlook includes scenarios where temperatures are 10 percent higher than predicted as well as 10 percent lower.

    Natural gas is the most common form of heating fuel in the United States, used as a primary fuel in nearly half of American homes. It is also the most common fuel in all regions except the South.

    The EIA predicts that homes using natural gas will pay an average of $578 during the season, a savings of $64—10 percent—compared to last year. The prediction is based on an anticipated 6 percent reduction in fuel consumption, 4 percent reduction in fuel costs, and a record level of natural gas supplies.

    Should temperatures be 10 degrees colder than the forecasted average, the EIA predicts an increase in consumption of 1 percent. However, it believes that average expenditures would still be 4 percent lower than last winter in this scenario. If temperatures are 10 degrees warmer than the forecasted average, the EIA expects a 14 percent reduction in natural gas consumption and a 17 percent decrease in expenditures.

    Electricity is the most common primary heating method in the Southern region, present in 63 percent of the homes in these states. This heating method is used in 39 percent of homes nationwide.

    Electricity also has the most modest savings, with the EIA predicting a 3 percent reduction in costs from last year. This reduction would bring the average heating costs for homes using electricity to $930, a savings of $30. The forecast assumes a 2 percent reduction in energy consumption and 1 percent reduction in costs.

    If temperatures are 10 degrees colder on average, the EIA expects energy consumption to increase 1 percent and costs to remain flat. However, it also predicts that electricity rates would increase in 2016 as a result of colder temperatures.

    Heating oil users are expected to see the largest savings, according to the EIA predictions. The administration suggests that these homeowners will spend an average of $1,392 to heat their home, a 25 percent savings—or $459—from last winter. The anticipated savings result from a 15 percent decrease in prices and projected 11 percent reduction in fuel consumption.

    The EIA says heating oil is relatively uncommon in the United States, used in only 5 percent of homes. It is more prevalent in the Northeast, present in 23 percent of the homes in this region.

    Homeowners who use heating oil will still see significant savings even if temperatures are 10 degrees cooler than the average predicted by NOAA. In this scenario, the EIA says a typical homeowner would save $288 due to lower fuel prices.

    The forecasts also show significant savings for propane, which is used as the primary heating fuel in 4 percent of U.S. residences. The EIA says homes using propane will spend an average of $1,437 during the winter, a $322 reduction from the previous year.

    In the Midwest, the EIA predicts that homeowners will spend 21 percent less than last year, a savings of $320, due to a 13 percent reduction in prices and a 9 percent reduction in consumption. Northeast homeowners are expected to save an average of 15 percent, or $342, due to a 5 percent reduction in fuel prices and 11 percent drop in consumption.

    The EIA says wood is a rarer method of heating, present in only 2 percent of U.S. homes—about 2.6 million residences—in 2014. However, this was a 33 percent increase from 2005.

    Wood is used as a secondary heating source in 8 percent of American homes, making it second only to electricity. In New England, about 20 percent of homes used wood for space heating, cooking, or heating water in 2009. While only 12 percent of suburban homes in this region used wood as a heating source, the share increased to nearly 50 percent for rural homes.

    The EIA says that there is no readily available data to estimate the consumption or price of wood pellets and cords for heating. It says additional information on this topic will be collected for its 2015 Residential Energy Consumption Survey.

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