What You Can Do to Lower Energy Bills as Fuel Costs Rise This Winter
Just about half of Americans primarily rely on natural gas to heat their homes in the winter, according to the U.S. Energy Information Administration (EIA). While natural gas continues to be an affordable energy source for heat, the EIA estimated that homeowners will spend 28% more on gas bills in the 2022-2023 winter than they did last year, as reported on the Winter Fuels Outlook released in December 2022.
Natural gas wasn’t the only fuel type predicted to rise in price this winter. Following closely behind, heating oil was expected to increase by 27%, electricity by 10%, and propane by 5%.
Now that we are officially in the thick of heating season, what does this mean exactly? What are the main drivers of these expected — and now recent — price hikes? How can consumers combat rising energy bills?
Understanding Rising Fuel Costs
It’s important to first understand the relationship that residential customers share with utilities to understand what drives changes in your monthly bill. As part of its Winter Fuels Outlook, the EIA explained that some state utility commissions establish rates (a year or so in advance) that take into account the price of fuel, allowing for regular price fluctuations.
In the case of natural gas used as a heating source, utilities pass through their fuel costs to customers. The pre-determined rates also reflect costs for the pipeline delivery of gas to homes.
So far in 2023, utilities nationwide have made news headlines for the substantial increases that homeowners have been seeing in their home energy bills. The EIA also described that the frequency and timing of rate changes often vary from state to state.
If we consider the Northeast, for example, more than 11 million homeowners depend on fossil fuels to sustain the cold season. Given this demand, supply issues and fluctuating costs for natural gas have given rise to recent price hikes.
On the West Coast, some utilities even warned homeowners in advance about higher-than-average bills for January. Although, particularly in Southern California, volatile gas prices across the state are also believed to be the result of supply limitations amid unusually low winter temperatures.
Adopting More Efficient Solutions
Regardless of where you reside, the EIA predicted the same theme across the board: higher spending on residential energy usage due to rising fuel prices and the forecast for a colder winter than last year.
Facing the expectation that your bill will likely increase, what can you, as a consumer, do?
Ensuring that your heating system is running properly and at maximum efficiency is a great start. Regardless of fuel type, the U.S. Department of Energy reports that combining proper equipment maintenance with necessary upgrades can save you as much as 30% on your energy bill.
At the National Energy Improvement Fund (NEIF), we partner with a network of approved contractors who commit to helping their customers “Go Greener, Affordably.” Working with an NEIF-Approved Contractor means that you have access to NEIF’s energy efficiency financing, making it much more cost-effective to upgrade your home’s heating system.
Whether you’re interested in learning more about electrification or wanting to optimize the efficiency of your current system, NEIF-Approved Contractors are highly qualified and ready to come up with a solution that works for you.