Higher prices to fuel rise in 2021-22 winter heating bills

Households across the U.S. will spend more on energy this winter compared with the past several winters because of higher prices and slightly colder temperatures expected for much of the country, according to the U.S. Energy Information Administration’s (EIA) Winter Fuels Outlook.

The 5 percent of U.S. households that heat primarily with propane will see the largest increase among winter heating fuels compared to last winter. EIA says those propane-heated households will spend 54 percent, or $631, more on average this winter – 94 percent more in a colder winter and 29 percent more in a warmer winter.

EIA’s Winter Fuels Outlook includes propane forecasts for the South, for the first time, in addition to the Northeast and Midwest.

EIA says households heating with propane in the Northeast will spend an average of $2,012, which would be 47 percent more than last winter – a result of its forecast of 42 percent higher propane prices and 3 percent more household consumption on average, compared with last winter. EIA expects households in the Midwest to spend an average of $1,805, which would be 69 percent more this winter, reflecting propane prices that are 65 percent higher than last winter and 2 percent more consumption. In the South, EIA expects households to spend an average of $1,643, which would be 43 percent more this winter, reflecting average propane prices that are 42 percent higher than last winter and a similar level of consumption.

Propane markets are experiencing low inventory levels and high prices heading into the winter heating season. Given relatively low inventory levels heading into winter, EIA says, weather will be a key determinant of propane market outcomes and consumer expenditures this winter.

For more on propane market dynamics, read the weekly Trader’s Corner.

Other winter heating fuels

EIA says the nearly half of U.S. households that heat primarily with natural gas will spend 30 percent more than they spent last winter on average – 50 percent more if the winter is 10 percent colder than average and 22 percent more if the winter is 10 percent warmer than average.

EIA expects the 41 percent of U.S. households that heat primarily with electricity will spend 6 percent more – 15 percent more in a colder winter and 4 percent more in a warmer winter.

The 4 percent of U.S. households that heat primarily with heating oil will spend 43 percent more – 59 percent more in a colder winter and 30 percent more in a warmer winter.