Upstate New York residents should expect to pay more for heating costs this winter than they have in a decade and a half.
National Grid officials predict average customers will pay $943 for natural gas this winter, which is a roughly 39% hike compared to last year’s heating costs of $680, utility company officials announced during a virtual press event Tuesday. National Grid delivered its heating costs forecast about a month earlier than usual to give customers time to prepare for higher costs, which amount to roughly $52 more per month compared to last year.
The last time customers paid more than $900 for the five-month winter season, from the beginning of November to the end of March, was in 2006, when customers paid $984 for natural gas heat. The lowest-cost winter since then came in 2016, with customers paying less than $470 in natural gas costs for the season, according to National Grid.
Customers who use an average of 713 therms are predicted to pay $263 more than last winter, according to the utility. The fare hike is a result of increased wholesale supply costs, which National Grid says account for $231 of the total estimated increase. The remaining portion of the increase is related to delivery price increases that are part of the company’s multi-year rate agreement and other customer bill surcharges, National Grid says.
Eastern New York customers will also pay $116 – or 22% – more for electricity costs this winter, the utility predicts. The forecast is based on average electricity use of 600 kilowatt-hour per month, and National Grid says higher wholesale electricity prices are contributing to $105 of the increase.
While the utility’s preseason predictions have a track record for accuracy, weather conditions ultimately affect total heating costs. Still, winter weather would have to be extreme for customers to see a significant divergence from the forecast, officials said.
“Usually a few days here and there won’t impact the customer’s bills that greatly. It would have to be a sustained period of time,” said Robert Moore, a manager of gas supply planning at National Grid. Moore noted natural gas storage helps offset costs during times of peak usage, when market rates are likely to be higher.
Natural gas prices, which sat above $8 per million British thermal units Tuesday, have declined from summer peaks that approached $10/MMBtu. But prices remain notably higher than a decade ago, when prices climbed to above $5/MMBtu in February 2014 only to fall and stay beneath that threshold before the current spike that came during the pandemic.
The higher commodity prices are a result of many factors, including natural gas demand increasing as utilities move away from energy sources like coal, said Juan Alvarado, director of Energy Analysis with the American Gas Association. Meanwhile, U.S. natural gas production slowed during the pandemic, and while the number of natural gas-directed rigs has climbed back up to pre-pandemic levels (averaging about 160 rigs in August), according to a Sept. 1 report by the U.S. Energy Information Administration, Russia’s invasion in Ukraine complicates the picture. Russia is the second largest natural gas producer behind the United States.
As part of administering its prediction early, National Grid pointed to resources that can help customers pay their heating costs. National Grid’s resources include payment assistance programs for income-eligible customers, residential and business energy efficiency programs and incentives, low-cost and no-cost bill management solutions and flexible payment programs. For more, visit www.nationalgridus.com/Upstate-NY-Home/Energy-Saving-Programs.
The utility is also pointing customers to energy-saving strategies, such as lowering the thermostat (for every 1 degree a thermostat is set back, customers can save 1% to 3% on their annual heating costs, National Grid says) and opening curtains during the day to let in sunlight and closing them at night to trap heat.
“We recognize that higher energy prices will add to the financial burden for our customers who are struggling with higher costs at the grocery store, gas pump and elsewhere,” said Melanie Littlejohn, National Grid’s New York vice president for Customer and Community Engagement. “We are encouraging our customers to take action now, before the cold weather arrives.”
Andrew Waite can be reached at [email protected] and at 518-417-9338. Follow him on Twitter @UpstateWaite.