Home-heating costs are expected to be lower this winter than last year’s unusual freeze, the U.S. Energy Information Administration said Tuesday.
Overall, electricity expenditures are projected to drop 2 percent, the EIA said. Natural gas costs will drop 5 percent. Home heating oil, which is used in the Northeast, will decrease 15 percent. Propane prices are projected to fall 27 percent, buoyed by a 17 percent increase in inventories compared with the previous year.
“If the weather cooperates, this is not going to be much of a problem,” EIA Administrator Adam Sieminski said Tuesday at a Washington event hosted by the National Association of State Energy Officials that announced the EIA’s winter fuel forecast.
“We’re better prepared going into this winter,” he said.
The forecast is a welcome one after a brutal winter that saw prices spike across the country, partially a response to temperatures that were 11 percent colder than the previous 10-year national average.
In the Midwest, the price increase was due to a propane shortage — a combination of high demand from a fertile corn-growing season followed by frigid weather. In New England, limited pipeline capacity choked off natural gas supplies. In the Midwest and Appalachia, the polar vortex froze electricity generators and sent power prices skyrocketing.
While Sieminski said “electricity bills are likely to be lower in most regions,” some face more tenuous prospects. New England, for example, would get hit if it’s a cold winter in both that region and Europe, since it imports heating oil from across the Atlantic.
Long-term, New England must increase pipeline capacity to get more natural gas into homes, Sieminski said. Federal regulators have no jurisdiction over those matters, though, as Sieminski suggested states could offer incentives for investment or by “figuring out a way to move the permit process along.”
