A year after adding the term “polar vortex” to their vocabulary – and feeling its biting financial impact – Americans can look forward to spending less money to keep their homes warm this winter, whether they heat with natural gas, fuel oil, propane, or electricity, government energy-watchers said on Tuesday.

The key driver behind the sunny spending outlook is a relatively mild forecast for winter 2014-15, the U.S. Energy Information Administration said. Combined with better-than-expected replenishment of fuel stocks in the past several months, that means households can expect to spend from 2 percent to 27 percent less during the “home heating season,” defined as running from October through March. (Take the quiz: What You Don’t Know About Home Heating)

About half of U.S. households rely on natural gas for space heating and more than a third use electricity, the primary heat source in the South. Natural gas prices are actually expected to be higher this winter compared to last year, but the EIA said record storage injections and increased production throughout winter will limit the price rise to just 6 percent, which should be more than offset by decreased demand. A similar story is expected to unfold with electricity.

The biggest winners this winter could be those who heat with propane—people who were particularly hard hit last winter, especially in the Midwest, home to more propane users than any other region in the country. A variety of factors contributed to propane shortages and high prices last season, from the cold weather to increased demand for the fuel by farmers who used it to dry corn after a late and wet harvest season. (See related, “Propane Shortages Leave Many U.S. Homeowners in the Cold.”)

This winter, it should be a different story: Temperatures in the Midwest are forecast to be 16 percent warmer than in 2013-14, and the EIA said that as of late September, propane stocks were 17 percent higher than at the same time last year “and are at the highest level for any week since at least 1993.” As a result, the average price of propane is expected to fall by 24 percent, with total heating expenditures down 34 percent.

Fuel oil isn’t nearly as common a heat source as it once was, but about a quarter of Northeast households still rely on it, and these folks too will get a price break this winter, with prices down 6 percent and total fuel bills for the season expected to fall 15 percent.

If there’s a cautionary note in the EIA outlook, it’s aimed at New England, where the winter of 2013-14 was especially rough.

Record cold spells this past winter drove up demand for natural gas in the region. The fuel is also used increasingly to generate electricity, but pipeline infrastructure has failed to keep up with the growth. That led to what the EIA called “extreme price spikes in spot natural gas and electricity prices in New England during January and February 2014.” The agency said constraints this winter could “produce periods of localized higher wholesale pricing.” (See related, “U.S. Electricity Rates Spike After Years of Slow Growth.”)

Of course, the biggest wild card in the outlook anywhere and everywhere is the weather forecast. For those who put stock in such things, the Old Farmer’s Almanac is predicting a colder-than-normal winter in the Midwest and East. The EIA said that if the weather does turn out to be 10 percent colder than government forecasters expect, households that use electricity and natural gas for heating will see their total bills rise, though in single digits, while heating oil and propane users will still end up paying less overall than they did last winter thanks to lower fuel costs.

Comments

  1. justalongfortheride
    northern Ozarks
    October 27, 2014, 2:18 pm

    Had propane locked in at $2.02 a gallon last winter and had to threaten supplier to keep at least 30 percent in tank and really had to get nasty with them on Dec. 23 when were were nearly out with a storm on the way and a 12-old-request for a fill ignored. We ended up burning 3 cords of wood because we thought the supplier would eventually refuse to bring gas entirely. Changed suppliers and got locked in at $1.89 and they have a monitor on the tank so will know when we need gas.

  2. Gary J. Palys
    New Hampshire
    October 25, 2014, 7:37 am

    I truly do not believe it is going to be a mild winter, but time will tell…

  3. Marv Smeltfisch
    Cobbtown, Wi
    October 20, 2014, 1:05 pm

    Fracking left our water flammable, and greenish-yellow in color. They said “don’t worry about it”.

  4. Karl Quick
    October 9, 2014, 4:42 pm

    Fuel prices will be down due to fracking producing record amounts of natural gas, plus movement to CCGT power generation plants producing cheaper/cleaner electricity.
    Fuel consumption will be up due to a colder than average winter; I think the new models linking temps to total solar energy flux coupled with the 60+ year ocean heat cycle will prove to fit reality better than the CO2 based models of global warming. This new model predicted the nearly 2 decade warming hiatus, and now predicts a decade of cooling…. we will see. If it is correct, by 2020 no one will be worried about CO2 being a problem…. but we sure do enjoy the reduction in pollution (particulate and chemical) achieved by the new CCGT power plants!

  5. Originalweathernut
    Near Santa
    October 8, 2014, 9:55 pm

    This is bull. Polar Vortex was heard a lot in the last cold phase end of 1970s. No matter if it is milder or not & most forecasts call for it to be COLDER than last winter, it is still a negative PDO next 20 years so mild means harsh for warm phase years e.g. last 30. That means this winter will be one of the colder ones of last 30 even if it is mild compared to average for cold phase so they need to get their science up to date.

    For example; last winter Atlanta got the cold but missed out on the snows. This winter, they will get bigger snows than last 30 years and nearly as cold as last winter but later in the season so it is a really more milder autumn through Nov 19th then it turns colder with ups and downs then the coldest late Jan & Feb instead of early Jan like last winter. Atlanta can expect heavy snows for them & TN line can expect a billiard or two and huge snows that point to Great Lakes. The PNW will be mild and dryer than average. ENSO conditions work different in cold phases, arctic ice levels are building back up fast so get ready for the heaters.