CLEVELAND, Ohio - Heating bills are likely to rise this winter, especially for natural gas users, because of a combination of supply and weather.
The U.S. Energy Information Administration (EIA) is predicting higher heating bills for homes regardless of how they’re heated, both because this winter is supposed to colder, and rising fuel costs. But the bigger hit likely will be on natural gas homes.
Natural gas prices are expected to rise by 30% compared to last year, and electricity by 6%. Less commonly used propane and heating oil are expected to see even steeper rises. According to U.S. Census Data, about 65% of Ohio’s home are heated using natural gas, and 25% use electric.
Dave Jankowski, chief marketing and communications officer for the Northeast Ohio Public Energy Council (NOPEC), said the expected increase is largely a supply and demand problem.
“This tight inventory issue is really what’s driving the price up in the uncertainty of weather,” Jankowski said.
Natural gas prices have hit historic lows over the past seven years as new ways to drill became available. But this incentivized natural gas producers to drill less, and over the past 12 to 18 months producers have pulled back on drilling, Jankowski said. Meanwhile, power plants have moved away from coal and towards natural gas to make power.
Jankowski said the hurricane season also disrupted drilling in the Gulf Coast, where a lot natural gas comes from.
The end product is that there’s about 8% less natural gas in storage than normal at this time of year. With cold on its way, demand is too, causing a rise in price, Jankowski said.
Forecasts from the National Oceanic and Atmospheric Administration are calling for slightly colder temperatures across the country for the winter, though slightly warmer in Ohio.
While Ohioans won’t use as much fuel if the temperatures are warmer here, colder weather elsewhere could play a role in supply and demand for natural gas.
This is part of why the EIA’s acting administrator Steve Nalley said the prediction is higher bills, but much of it is supply.
“As we have moved beyond what we expect to be the deepest part of the pandemic-related economic downturn, growth in energy demand has generally outpaced growth in supply,” said Nalley in a news release. “These dynamics are raising energy prices around the world.”
The EIA predicts that natural gas prices in the East North Central region, which includes Ohio, will be higher than next year and continue to rise in 2022.
Jankowski said the 30% increase from last year to this one is a good “guesstimate,” but it can really only be a guess. The winter locally could be slightly warmer or colder, and that’ll effect usage and supply, he said.
According to energychoice.ohio.gov, the Standard Choice Offer (SCO) went up 24% for Columbia Gas customers from September to October, and went up 33% for Dominion Energy customers.
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