Wednesday, October 21, 2009

U.S. EIA Expects Lower Home Heating Costs This Winter

eia-price-summary.jpgIn a recent press release the Energy Information Administration said it expects lower heating costs this winter. "We expect household bills for space-heating fuels will be 8 percent lower than a year ago, with the average household spending $960 in the October through March winter heating season, a decrease of $84 from last winter," said EIA Administrator Richard Newell. "The lower bills primarily reflect lower fuel prices, although slightly milder weather than last winter will also contribute to less fuel use in many areas. We expect the largest decreases in fuel expenses in households using natural gas and propane."

They expect the lower 48 states to be 1 percent warmer than last year. Warmer weather obviously requires less fuel for heating. However temperature variations are regional in that the midwest is expected to be warmer but the west is expected to be colder. I live in California and the rainy season seems to have already started, a harbinger for a "cold" winter.

Another factoid is that larger supplies of natural gas means a lower price for natural gas. Their projected 15-percent decrease in average household expenditures results from an 11-percent decrease in prices and a decline in consumption of 4 percent based on the forecast of warmer weather (in the midwest, where natural gas is the primary heating fuel) than last winter.

The Northeast accounts for 80 percent of heating fuel consumption. In that region, the average household is projected to spend 3 percent less ($60) than last winter as a result of a 2-percent decrease in consumption, with regional prices about 1 percent less than last winter.

Homes heated with propane are expected to spend an average of $280 (14 percent) less this winter but that decrease varies broadly by region.

Households heating primarily with electricity can expect to spend an average of $20 (2 percent) less than last winter. The number of households heating with electricity is growing faster, at an estimated annual rate of 2.5 percent, than all the other major heating fuels.


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