If your heating bills jumped this winter, you’re not alone. They’re expected to rise in every region for every kind of fuel and nearly double for some homes in the Midwest.
Despite a boom in U.S. energy production, average costs for heating a home with propane will likely be 54 percent higher for this winter than a year ago, the U.S. Energy Information Administration reported last week.
In the Midwest, the average projected tab for heating homes with propane is $2,212 this winter, compared with $1,333 for the 2012-2013 season. In the Northwest, it’s even higher, $2,412, but that’s less of an increase from the $1,940 of the prior year.
Price hikes went beyond propane. The average U.S. tab for heating homes with natural gas is projected to jump 10 percent to $663 while the cost for using oil will rise 7 percent to $2,243 and for electricity, 5 percent to $934.
“Persistently cold weather east of the Rocky Mountains drove up demand for all heating fuels, depleted inventories and put upward pressure on prices,” EIA said in announcing its 2013-2014 winter forecast. “Propane prices experienced an especially high spike during several weeks in January and February.”
These heating costs were significantly higher than EIA expected in its prewinter forecast, issued last October – before the Big Chill. Between the beginning of October and the end of February, the average number of days that U.S. homes turned on the heat was 13 percent higher than the prior winter and 10 percent above the 10-year average.
This Midwest and the South suffered the most. They were 19 percent colder than the prior winter, while the Northeast was 13 percent colder but the West was 5 percent warmer, according to EIA data.
The polar vortex – a mass of very cold air that usually hangs out above the Arctic Circle – disrupted pipeline and rail deliveries of propane, says Roy Willis, CEO of the Propane Education & Research Council, an industry advocacy group.
“It came at the wrong time,” he said, adding he doesn’t expect a repeat performance next winter. Aside from the cold blast and low inventories, he said surging U.S. exports were another factor behind this winter’s price spike.
The export of U.S. propane or liquid petroleum gas, produced from both natural gas processing and crude oil refining, has hit record levels, raising global supplies and driving down prices at the international level. Yet it’s contributed to higher prices at home.
The American Gas Association, an industry group, predicted in October that customer bills would be 5 percent higher but – if colder weather kicks in — “maybe 10 percent” higher.
“This winter we have seen extreme temperatures and record-setting natural gas consumption throughout the country,” said Jake Rubin, AGA spokesman.
Natural gas, the U.S. production of which hit record highs last year, heats nearly half of all U.S. homes and almost three-fourths of those in the Midwest. Electricity, especially popular in the South, is the second most popular heating fuel. Propane, only 4.5 percent of the nation’s total, is used mostly in the Midwest.
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