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EIA Expects Modest Rise in Home Heating Costs This Winter

The October 2010 Short-Term Energy Outlook , released today by the U.S. Energy Information Administration (EIA), forecasts a modest rise in heating bills for many U.S. consumers.

"EIA expects household bills for space-heating fuels will be about 3 percent higher than a year ago, with the average household spending $986 in the October through March winter heating season, an increase of $24 from last winter," said EIA Administrator Richard Newell.

The higher bills primarily reflect higher fuel prices, although expected colder weather than last winter in the Northeast will also contribute to more fuel use. EIA expects the largest increases in fuel expenses to be in households using propane and heating oil.  Households using electricity for space heating, particularly in the South, should see lower average fuel bills, in part due to expected warmer weather.

These average forecasts provide a broad guide to changes from last winter, but fuel expenditures for individual households are highly dependent on local weather conditions, the size and efficiency of individual homes, their heating equipment, and thermostat settings.

Key points:

  • EIA expects the lower-48 States to be 3 percent warmer during the October through March winter heating season compared with last winter and 1 percent warmer than the 30-year average (1971-2000), according to the National Oceanic and Atmospheric Administration's most recent projections of heating degree-days. Regional heating degree-day projections vary widely.
  • EIA expects households heating primarily with natural gas to spend an average of $27 (4 percent) more this winter than last winter. The 4-percent increase in natural gas expenditures reflects a 6-percent increase in prices and a 2-percent decrease in consumption. About 52 percent of all U.S. households depend on natural gas as their primary heating fuel.
  • EIA expects households heating primarily with heating oil to spend an average of about $220 (12 percent) more this winter. The Northeast accounts for 80 percent of U.S. heating oil consumption. EIA forecasts the average Northeast household will spend 13 percent more ($259) than last winter as a result of a 5-percent increase in consumption and 8 percent higher regional prices than last winter.
  • Households heating primarily with electricity can expect to spend an average of $18 (2 percent) less this winter. The 2-percent decline in electricity expenditures reflects a 2-percent increase in prices and a 4-percent decline in consumption. About 37 percent of all U.S. households rely on electricity as their primary heating fuel, ranging from 13 percent in the Northeast to 61 percent in the South.
  • EIA expects households heating primarily with propane to spend an average of $136 (8 percent) more this winter, but that increase varies across regions. About 6 percent of all U.S. households heat with propane.
  • Energy prices remain volatile, reflecting uncertainty, or risk, in the market. To measure this uncertainty, the Outlook reports confidence intervals around the New York Mercantile Exchange (NYMEX) crude oil and natural gas futures prices using a measure of implied volatility derived from the NYMEX options markets (see Energy Price Volatility and Forecast Uncertainty ).
Short-Term Energy Outlook can be found at:
http://www.eia.gov/emeu/steo/pub/contents.html

The product described in this press release was prepared by the U.S. Energy Information Administration (EIA), the statistical and analytical agency within the U.S. Department of Energy. By law, EIA's data, analysis, and forecasts are independent of approval by any other officer or employee of the United States Government. The views in the product and press release therefore should not be construed as representing those of the Department of Energy or other Federal agencies.

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