Lower Heating Bills Expected This Winter

After the unusually cold winter of 2013-14, U.S. households can expect lower heating expenditures this winter (October through March) compared with last winter.

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After the unusually cold winter of 2013-14, U.S. households can expect lower heating expenditures this winter (October through March) compared with last winter. According to EIA's Short-Term Energy and Winter Fuels Outlook, average household expenditures for homes heating primarily with natural gas will total $649 this winter, a $31 decline from last winter's average. Homes heating primarily with electric heat are expected to spend $938 ($17 less). Homes using propane or heating oil have higher expenditures on average ($1,724 and $1,992, respectively) than homes using natural gas and electricity, but still lower ($652 less and $362 less, respectively) compared to last year.

According to the latest forecast from the National Oceanic and Atmospheric Administration (NOAA), temperaturesare expected to be warmer than last winter. The extreme weather patterns last winter elevated demand for all heating fuels, led to a drawdown of inventories, and put upward pressure on prices. Because weather patterns present great uncertainty to winter energy forecasts, EIA's Winter Fuels Outlook includes projections for 10% colder and 10% warmer scenarios. Assuming 10% colder weather, heating expenditures would be expected to average 6% higher than last year for households heating with natural gas and 2% higher for those using electricity. Expenditures for propane and heating oil are still expected to be lower than last winter, even in the 10% colder scenario, as propane and heating oil prices are lower than last winter. In the colder scenario, propane-heated households spend 15% less and heating oil households spend 5% less than last winter.

Differences in average expenditures across fuels are attributable to both differences in prices across fuels and the fact that some fuels are predominantly used in the coldest areas of the country.

 

Details of the weather outlook for individual fuels can be found here.

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