EIA: Higher prices, colder weather to raise 2022-23 winter expenditures

Many U.S. households will spend more on energy this winter compared to last winter, the result of higher fuel prices combined with higher heating demand owing to a slightly colder weather forecast, according to the U.S. Energy Information Administration’s (EIA) Winter Fuels Outlook for 2022-23.

Forecast expenditures, reflecting consumption across all residential energy uses, vary significantly across U.S. regions and fuels for this winter.

Of the four most common U.S. heating fuels, EIA expects only propane household expenditures to fall, by 2 percent, this winter when considering average winter household energy expenditures adjusted for inflation. Propane households would pay 5 percent more in expenditures ($1,668 per household) in nominal terms this winter compared to last winter.

On a regional basis for propane, EIA forecasts an 8 percent increase in the Northeast ($1,970 in total expenditures per household this winter); a 5 percent increase in the Midwest ($1,650 per household); and a 4 percent increase in the South ($1,510 per household). EIA does not forecast expenditures for the West Coast.

Meanwhile, in nominal terms, EIA expects households that use natural gas as their primary space heating fuel to spend about $930 this winter, an increase of 28 percent compared to last winter. Electricity expenditures will rise 10 percent compared to last winter, EIA says, with households spending an average of about $1,360 this winter. Heating oil households will experience a 27 percent increase from a year ago and spend $2,350 on average this winter.

Inventories across a range of heating fuels are low, EIA points out, creating the possibility for high price volatility and price spikes.