Heating costs to rise this winter as cold returns

Associated Press Modified: October 10, 2012 at 3:45 pm •  Published: October 10, 2012
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NEW YORK (AP) — Americans will pay more to heat their homes this winter as they feel something they didn't feel much of last year: cold.

Prices for natural gas, heating oil and other fuels will be relatively stable. But customers will have to use more energy to keep warm than they did a year ago, according to the annual Winter Fuels Outlook from the Energy Department's Energy Information Administration.

Last winter was the warmest on record. This year temperatures are expected to be close to normal.

Heating bills will rise 20 percent for heating oil customers, 15 percent for natural gas customers, 13 percent for propane customers and 5 percent for electricity customers, the EIA announced Wednesday.

Heating oil customers are expected to pay an average of $3.80 per gallon, the highest price ever. That will result in record heating bills, at an average of $2,494. That's nearly $200 more than the previous high, set in the winter of 2010-2011.

Kathleen Ryan of Cohoes, in upstate New York, is on a payment plan in which she is billed for oil November through May to spread out the costs. But with oil prices high and a hint of winter chill in the air, she is concerned.

"You have no idea what Mother Nature is going to bring," she said. "They're already talking about frost this weekend. My costs could double."

She regrets not switching over to natural gas earlier this year when sewer line work in her neighborhood would have made it easier to run a gas line to her home. But she has a plan to keep a lid on her heating bills. "I'm going to buy a portable heater, an electric heater," she said.

That could help. Customers who use natural gas, electricity or propane will see lower bills than in a typical winter because of relatively low prices. For example, natural gas should average $10.32 per thousand cubic feet. That's 0.8 percent higher than last year but 13 percent lower than the five-year average.

"It's two different worlds. For most families this is still going to be an affordable year, except for those who use oil heat," says Mark Wolfe, the Executive Director of the National Energy Assistance Director's Association. "For them, it's going to be very difficult."

Rising heating oil costs come at a time when funding for low-income heating assistance is falling. Over the last two years, federal heating assistance funding has been cut to $3.5 billion from $5.1 billion. The number of households receiving assistance has dropped by 1.1 million over the period, according to Wolfe.