Expect to pay more for heat this winter, Energy Department says

Americans should expect to pay "significantly" more to heat their homes this winter, the U.S. Department of Energy says. The warning comes at the start of what's known as "heating season."

Fuel costs, which plunged last year, have increased for most types of fuel — and just when the country is entering what's expected to be a colder-than-average winter, the department said.

"As we head into the winter of 2021–22, retail prices for energy are at or near multiyear highs in the United States," the Energy Information Administration said in a briefing released this week. "We expect that households across the United States will spend more on energy this winter compared with the past several winters because of these higher energy prices and because we assume a slightly colder winter than last year in much of the United States."

How much more residents can expect to pay for heat varies depending on the part of the country they live in and how their homes are heated. However, across the board, lower supplies and expectations of higher demand are driving the predicted cost increases.

Households that rely on natural gas for heating — about half of all Americans — can expect to pay 30% more this winter, for an average payment of $746, the EIA said. That's up 30% from last year's household average of $573, which coincided with historically low natural-gas prices.

Natural-gas production fell last year during the coronavirus crisis and rebounded slower than heating demand, the EIA said. The resulting crunch is leading prices to rise. Moreover, the U.S. is exporting record amounts of liquefied natural gas, further reducing the U.S.'s reserves.

Households that use heating oil can expect to spend 43% more this winter, while those that use propane should see costs increase 54%. Only about 4% of all U.S. households rely on heating oil for heat, mostly in New England and the Northeast. About 5% of households use propane, much of them concentrated in the the upper Midwest. 

There will be a relatively smaller cost increase for electric heat, which is predicted to see a roughly 6% jump in prices, the EIA said. About 4 in 10 households in the U.S. use electricity for heat.

Consumers facing higher heating costs should check to see if there are local financial assistance programs, according to the Wall Street Journal. Many programs designed to help pandemic-affected tenants with rent also cover utility costs, including energy. 

Homeowners can also lower costs by better insulating their homes, such as by putting plastic sheeting over windows to reduce drafts or using "door pillows" to plug up space under doors, the Journal suggested.