Couple higher home heating bills with the increased cost of gasoline, and many families will feel considerable budget strain this winter.
Last week, the Energy Information Administration said in the coming season.
On average, homes using natural gas should expect to spend $350 more, a 48 percent increase; oil-heated homes will spend $378 more, a 32 percent rise; and homes heating with propane should expect to pay an additional $325, or 30 percent more. Households heating with electricity should see the smallest jump: only $38 more, or a 5 percent increase.
But, notes Money magazine Managing Editor Eric Schurenberg on The Early Show, those estimates are based on price alone. If consumption also climbs, as a result of colder weather, your energy costs could be even higher.
For instance, the Midwest had a mild winter last year. If colder conditions return this year, the average Midwest home could spend 61 percent more on natural gas, the predominant fuel for the region.
Schurenberg tells co-anchor Harry Smith, "It's gonna hurt. It's gonna hurt."
While energy costs have been rising as a result of growing demand globally, a drop in production and refining capacity after Hurricanes Katrina and Rita will keep home heating prices especially volatile through the winter, Schurenberg says.
As of Friday, 10.5 percent of annual oil production in the Gulf was shut down, as well as 7.9 percent of annual natural gas production, according to the Minerals Management Service. And some of that production will probably be out of the picture at least through the end of the year.
But, Schurenberg points out, there are several steps you can take to make sure your winter fuel bills are as low as possible. Among his suggestions:
Check your furnace
Perform a maintenance check. Clean the filters once a month, or as often as the manufacturer recommends, and schedule annual maintenance. If your furnace is old, consider upgrading: Furnaces more than 15-years-old will convert only 70 percent of fuel to heat, while a new model could get you 80 percent to 97 percent efficiency.
Lower thermostat settings overnight
It's a myth that it costs as much to reheat a home in the morning after the heat's been turned down overnight as it does to keep settings the same overnight as during the day. Keeping the heat low at night will indeed save you money. Set the thermostat as low as you comfortably can this winter. Consider wearing warm pajamas to bed and using extra blankets so you can lower the temperature as much as possible. Lowering the temperature 10 percent for eight hours can cut your heating tab about 10 percent. You might even want to install a programmable thermostat that automatically lowers and raises the heat at night and during the day. These thermostats cost about $40 to $100.
Insulation is extremely important
Insulation helps control airflow into and out of your home, keeping it warmer in the winter and cooler in summer. The easiest and most cost-effective place to add insulation is in the attic, where it should be at least six inches thick. And take note: If your house was built before 1980 and hasn't had insulation added, odds are it is under-insulated.
Look for the Energy Star label when shopping for appliances
Make an effort to buy energy-efficient appliances. Look for the Energy Star label on appliances. These products meet efficiency guidelines set by the Energy Department and the Environmental Protection Agency. For instance, replacing a dishwasher manufactured before 1994 with an Energy Star model could save you more than $25 a year in electric or natural gas costs.