Heating and electric bills set to surge this winter: "There is a lot of pain"
Americans are in store for an expensive winter when it comes to paying their heating and electric bills.
The average household will pay about 17% more this winter to heat their property, reaching a 10-year high of about $1,200 per home, according to a forecast from the nonprofit National Energy Assistance Directors Association. Electric bills are also set to rise, with the U.S. residential price of electricity expected to jump about 7.5% from 2021, according to the U.S. Energy Information Administration.
Those forecasts follow a year of already elevated costs for homeowners, and are likely hit low- and middle-income consumers the hardest, Mark Wolfe, executive director of the National Energy Assistance Directors Association, told CBS News. Rising energy costs are linked to Russia's war in Ukraine, which has disrupted natural gas flows to Europe, and a hotter-than-normal summer in the U.S. that caused electric companies to draw down their supplies of natural gas, Wolfe noted.
"There is a lot of pain. This is the second year of high home heating prices," he said. "Across the board, low- and middle-income families are suffering."
Oil is still more expensive than last year
Even though the price of oil has dropped since hovering in the triple digits in June, the commodity remains more expensive than it was a year ago. For instance, motorists have welcomed three months of declining prices at the pump, but they're still paying 15% more than a year earlier, according to AAA data.
"What we are seeing is an increasing rate of home energy prices on top of high gasoline prices, and that's causing more low- and middle-income families to make choices in how they pay their expenses," Wolfe said.
The hottest inflation in 40 years has been remained stubbornly high, despite the Federal Reserve's efforts to put the brakes on demand by raising interest rates. Although headline inflation cooled slightly in July and August, core inflation — which excludes volatile food and fuel prices — actually accelerated last month.
That's causing some consumers to cut back on discretionary spending like eating out, and almost 4 in 10 consumers said they plan to spend less this holiday season than last year, according to a new survey from Mass Mutual.
Homeowners who use heating oil to heat their homes will face the highest costs this winter, according to the forecast. The typical bill will jump almost 13% to $2,115, Wolfe's group projects.
Propane heating bills are projected to rise 15% to $1,828. Homeowners who use electricity to heat their properties will see a 7% increase to $1,328, and those who rely on natural gas will see their bills jump 34% to $952, the group estimates.
How to lower your bills
Wolfe recommends that homeowners take some steps to lower their energy usage, which could offset some of the pain of higher heating prices. The best advice: Tune up your furnace now, when heating and cooling specialists aren't that busy, he said.
"Think of every way to turn down your thermostat," such as turning down your home's temperature at night to save on energy consumption, he said.
Wolfe also recommended caulking windows, doors and other places where cold air may be seeping into your home. Lastly, check with your utility company on whether they offer a home energy audit that can tell you how to save on consumption, he said.