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Home heating bills could jump 25% on tight natural gas market, utilities warn

Warding off the chill could be an expensive proposition this winter, utilities warn, citing spiking natural gas and oil prices as the economy emerges from the coronavirus pandemic.

Municipal utility Westfield Gas + Electric said consumers can expect to pay 25% more on their heating bills this winter compared with 2020-21 and its depressed commodities markets. The factors driving the hike are global, not local, so Westfield’s warning goes for all utilities.

“Just be prepared,” said Westfield Gas + Electric general manager Tom Flaherty Sr. “Don’t be complacent going into this winter’s heating season.”

WG+E, like other utilities, is urging its customers to take steps now including insulating doors and windows, purchasing energy-efficient appliances, and installing automatic set-back thermostats so heat can be turned down during the day when no one is home and at night when people are asleep.

The U.S. Department of Energy says homeowners can save as much as 10% a year on heating and cooling by simply turning their thermostat down 7 to 10 degrees from its normal setting for eight hours a day. The percentage of savings is greater for buildings in milder climates than for those in more severe climates.

“You can easily save energy in the winter by setting the thermostat to 68°F while you’re awake and setting it lower while you’re asleep or away from home,” the Energy Department said.

Customers have not seen much of an increase in their bills so far, Flaherty said. Increases will likely start in November if it’s a cold month and people put on their heat.

“We are decently hedged for the winter,” Flaherty said.

An insurance policy the utility uses to guard against high peak rates at times of great need was $500,000 last year and this year is $3.5 million to $4 million. Natural gas prices peak when there are cold snaps, days when the high temperature is about 10 degrees.

“The cost of gas is going to be phenomenal,” Flaherty said. “If winter shows up.”

Also this week, Eversource asked state regulators to allow an increase in the gas supply rate for winter. If approved, the average customer using 132 therms of gas a month will see about a 21% rate increase, going from paying $197 a month to $238 a month, Eversource said in a news release.

After hitting 10-year lows during the pandemic, natural gas prices are up 20%, Eversource said.

Competitor National Grid anticipates it will increase bills for electric and gas customers by approximately 10% compared to November 2020.

In addition, National Grid is raising its delivery charge, a change previously approved by state regulators. National Grid said it expects to increase gas bills by approximately 5% to 8%.

Natural gas prices threaten to reverberate through all energy markets. As of Friday afternoon, 69% of New England’s electricity was generated by natural gas, according to ISO New England in Holyoke.

Westfield Gas + Electric said natural gas rates are up globally because of a number of factors.

Abnormally cold winters in Europe and Asia, and the deep freeze in Texas in February, caused extreme demand for natural gas and liquified natural gas for heating. Global heat waves over the summer increased the need for cooling, and for electricity, above the levels we usually see. The elevated demand for natural gas all year meant that gas stores were not replenished over the summer months as they usually are.

Heating oil is also up this year, averaging, according to state statistics, $3.08 a gallon. That’s $1 more than the average all of last winter. But prices last year fluctuated widely, according to state statistics. Retail propane is also up to $3.59 a gallon from an average of $2.90 a gallon last year.

Related content:

Springfield City Council, Eversource expand dispute over unpaid utility taxes

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