Americans will pay more to heat their homes this winter

Americans are on the cusp of seeing the biggest increase in their home heating bills in over 10 years, and it’s not just because of inflation.

A new report from the National Energy Assistance Administrators Association (NEADA), which represents state administrators for the Low Income Home Energy Assistance Program (LIHEAP), projects a 17.2% jump in average home heating costs this winter compared to last year, and a 42% jump in The cost of household electricity compared to the winter preceding the outbreak.

The latest increase came as a result of higher summer temperatures, driving up natural gas prices as some customers raised air conditioners to cool their homes, according to NEADA CEO Mark Wolff. This surge in demand drove prices up, exacerbated by the retirement of coal and nuclear plants, in favor of generators.

Meanwhile, natural gas production has been slow to return to the internet after waves of shutdowns during the Covid-19 pandemic.

Today, the price of natural gas has reached levels not seen in over a decade. NEADA estimates that 91% of US heating and cooling costs are linked to the price of natural gas, either directly or as a primary source of energy used to generate electricity.

Some facilities are able to mitigate the impact of huge price fluctuations, or increase the cost over time, thus protecting their customers from price increases. In addition, utilities are prohibited from taking advantage of higher commodity prices.

However, many countries are now facing depleted natural gas stocks. As more natural gas starts buying at current prices to make up for the shortfall, customers are likely to face higher bills in the coming months.

In fact, some utilities are already notifying customers to prepare for higher costs. On September 9, New York utility giant Con Edison forecast that the average customer’s electric bill will rise 22% to $116 per month this winter, while the average residential natural gas heating customer will see a 32% rise to $460 per month.

The company said the increases are directly related to the rise in natural gas prices.

The United States is also finding itself shipping more natural gas out of the country thanks to rising demand from Europe, which is facing supply shortages due to the conflict between Russia and Ukraine, said Gary Cunningham, director of market research at energy consultancy Tradition Energy.

“There is now an imbalance between our supply and demand,” Cunningham said. “All summer when we should have been storing gas, we weren’t storing it away. So, we had cold winters, we didn’t have strong production growth, strong exports – that’s what we got.”

Last week, NEADA sent a letter to Congress requesting a supplemental $5 billion increase to LIHEAP to help consumers with the rising cost of home heating and cooling. The group said it faces a “funding slope” without it, as the $4.5 billion earmarked in supplemental funds for LIHEAP in the 2021 US bailout will be fully talked about by the end of September.

“For many struggling families, higher prices can mean being forced to choose between heating, food or medicine,” the association said.

“About 29% of Americans surveyed have had to reduce or forgo expenses for basic household necessities to pay their energy bill in the past year, according to the US Census Bureau’s Pulse survey. And that was before fuel prices started rising.”

Tami Stover, director of energy assistance for the Hennepin County Community Action Partnership in Minneapolis, told NBC affiliate KARE-TV that it already expects grant sizes for its energy assistance to be smaller than last winter, and that previously expanded eligibility for assistance will no longer progress.

Last year, the branch said, the organization submitted 7,000 more applications than the previous season, an increase of 38%.

“The extra money we got last season definitely helped us be able to help more people and give them bigger grants,” Stover said. “I am a little concerned that the funding will not be able to meet the demand.

Any additional funding will allow LIHEAP to reach more families, said Mark Wolf, CEO of NEADA.

“With these high prices, we expect more people to come forward for help,” he said. “In particular, low-income families are also struggling with higher food prices and higher rent. We pay a bill, so if we pay that bill, they will be better able to afford food and petrol.”

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