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Consumers may be forced to collectively shell out more than $14 billion more in electricity and heating costs this winter compared to a year ago, according to a new report from the Consumer Energy Alliance (CEA).
It comes at a difficult time for the country as consumers grapple with painfully high inflation, which accelerated in September, jumping 8.2% from a year earlier. That marked their fastest pace in four decades.
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Rising heating costs this winter will only exacerbate the pressure on households, according to the CEA. To bolster its point, the advocacy group cited recent data from the Energy Information Administration (EIA) estimating how energy prices will rise across the board.
The increase in heating costs this winter will only exacerbate the economic pressure on households, according to the Consumer Energy Alliance. (Yui Mok/PA Images via Getty Images/Getty Images)
“Forecasting climate and energy trends for months is not an exact science, but it is very likely that global dynamics affecting energy products will lead to higher heating prices in the US this winter,” said the administrator of the EIA, Joe DeCarolis, in a recent statement.
Households that rely on natural gas as their primary heating source are estimated to spend about $930 this winter, due to expected higher prices and usage, which is a 28% increase from last year, according to the EIA.
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Meanwhile, consumers are estimated to spend $2,354 on heating oil, 27% more than in 2021, according to the EIA. Additionally, electricity is estimated to increase 10% this winter, costing consumers approximately $1,359. The EIA also estimated that consumers will spend $1,668 on propane, a 5% increase from last year.
Companies like Consolidated Edison Inc., which provides power to an estimated 10 million people living in New York City and Westchester County, have already begun “urging customers to take action now that they can help.” manage costs this winter as market prices for electricity and natural gas are expected to be substantially higher.”
Households that rely on natural gas as their primary heating source are estimated to spend about $930 this winter, due to expected higher prices and consumption, which is a 28% increase from last year, according to Energy Information Administration. (Gado/Getty Images/Getty Images)
The CEA said the administration’s “poor political decisions” were driving the price increases, although other experts, including the EIA, argued there are a number of Global factors affecting the prices of energy raw materials.
“By enacting a moratorium on oil and gas development on federal lands, canceling future federal lease sales, blocking pipelines, and restricting energy infrastructure development, the strategic advantage the United States enjoyed after becoming the world’s largest oil and natural gas in the world two years ago has all but vanished,” the CEA said.
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Nick Loris, vice president of public policy at C3 Solutions, told FOX Business that the Biden administration only deserves some blame because of “its anti-supply policies, like canceling lease sales and [the] Keystone XL Pipeline and impose new regulations that restrict investment.”
He noted that if the administration had not canceled the permit for the northern half of the Keystone XL pipeline, it could have been operational and “make up about half of The production cuts recently announced by OPEC +”.
Still, Loris said it’s “false” to blame solely the Biden administration because it “paints an incomplete picture.”
Utilities have already begun “urging customers to take action now that can help them manage costs this winter, as market prices for electricity and natural gas are expected to be substantially higher.” (iStock / iStock)
“The reality is that there are many reasons why prices are where they are,” he said, adding that the industry “is suffering from some of the same problems that other industries are suffering from: supply chain problems and worker shortages.”
“You can’t ignore Putin’s war in Ukraine either,” Loris said.
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In fact, the EIA told FOX Business that russia stocks “It created significant uncertainty in the market, as much of Europe has reduced energy imports from Russia.”
In addition, the EIA also noted that the upcoming European Union bans on imports of crude oil from Russia in December and petroleum products in February also have an impact.
The production cuts announced by OPEC+ also raised “the potential for global oil production to fall short of our forecast, which could push up prices for crude oil and other energy commodities,” the EIA added.
Aside from this, the agency said global supplies of natural gas and coal “remain relatively low, contributing to above-average prices for those products and for electricity.”