Midwesterners Can Expect Higher Heating Costs This Winter

As temperatures in the Midwest are expected to be normal this winter compared to a record-setting mild winter last year, heating fuel costs are expected to rise between 2% and 11%, depending on the energy source, according to the Energy Information Administration (EIA). If temperatures are 10% colder than normal, energy prices in the Midwest could be as much as 17% higher. Colder weather requires more energy to keep a home at a specific temperature and can also disrupt supply through increased demand and freezing pipelines and fuel inventories. Low fuel inventories can also affect price increases.

Winter household natural gas bills in the Midwest are forecast to average $590–11% more than last winter. Midwestern residential consumers primarily heating with natural gas are expected to consume 60 thousand cubic feet of natural gas this winter—11% higher than the estimated 54 thousand cubic feet of natural gas used last winter. Over the past two years, U.S. natural gas stockpiles have typically exceeded the five-year average; however, they are now nearing typical levels. This year, natural gas consumption in the United States has increased, particularly in the electricity sector, where demand is rising and natural gas is the dominant source of generation. Additionally, natural gas production has decreased due to voluntary cutbacks by several companies in response to low market prices.

Midwestern residential propane users are expected to see expenditures increase by 2% from last winter due to an 11% increase in consumption. That increase in consumption is partly offset by EIA’s forecast of 8% lower retail propane prices in the Midwest this winter. If it turns out to be 10% colder than normal this winter, however, EIA expects a 19% increase in Midwest household expenditures for propane. In the case of electricity, EIA expects Midwesterners’ residential electricity expenditures to increase by 6% under normal weather conditions.

EIA’s Forecast for National Heating Expenditures 

On average, nationwide, EIA expects little change in heating costs this winter as colder than expected weather on average balances out lower expected energy prices. Nationwide, EIA expects residential heating costs to be 1% higher for natural gas and 2% higher for electricity—the two primary heating fuels—under normal weather conditions.  In the case of temperatures 10% colder, residential natural gas expenditures for heating would be 7% higher, and for electricity, 6% higher. Under normal temperatures, propane heating expenditures are expected to be about the same as last year, and oil heating expenditures are expected to be 5% lower. If temperatures are 10% colder, however, residential propane expenditures for heating are expected to be 13% higher, and for oil, 5% higher. Propane is used as a heating fuel in 5% of U.S. households, mostly in rural areas, and heating oil is the primary space heating fuel for 4% of U.S. households, principally in the Northeast.

Not All Forecasters Agree with EIA

According to the National Energy Assistance Directors Association, residential home heating costs will be higher this winter nationwide. The National Energy Assistance Directors Association represents the state directors of the Low Income Home Energy Assistance Program (LIHEAP). It estimates that home heating costs, on average, for this winter to increase by 10.5% from last year primarily due to a colder winter in the Northeast and Midwest, with expenditures increasing from $889 to $982.

For households using electricity to heat their homes, expenditures are expected to increase from $1,063 to $1,208—a 13.6% increase. Electric prices have increased 24% under the Biden-Harris administration and are expected to continue increasing due to increased consumption from AI demand centers and the Biden-Harris administration’s plan to electrify everything from autos to gas stoves to heating devices and its regulatory assault on the roughly 60% of electric generation represented by coal and natural gas. Electricity is one of the fastest-growing indexes in the September 2024 Consumer Price Index.

The association also expects higher prices for natural gas, with average residential heating expenditures increasing from $601 to $644. Households that use heating oil are projected to see a 6.1% rise in expenses, moving from $1,851 to $1,963, largely due to higher consumption linked to colder weather in the Northeast. Meanwhile, families relying on propane can expect a 7.3% increase in their costs, rising from $1,343 last winter to $1,442 this year for comparable reasons.

All Energy Prices Have Increased Under the Biden-Harris Administration

The Biden-Harris administration has instituted onerous regulations on the fossil fuel industry, pushing its politically correct technologies under the guise that they will eventually be cheaper and even providing them with lucrative subsidies paid by American taxpayers. However, after almost four years of the Biden-Harris administration, the opposite has been the case. As mentioned above, residential electricity prices have increased by 24% since Biden took office, residential natural gas prices have increased by 32%, and gasoline prices by over 50%.

IER has documented 250 ways that the Biden-Harris administration, along with Democrat friends in Congress, has made it harder to produce oil and gas in the United States, from removing acreage from leasing to increasing royalties and other fees on oil and gas producers. The Biden-Harris power plant rule has been designed to force coal plants to retire prematurely since carbon capture technology is not yet commercially available to keep the plants within the 90% reduction of carbon dioxide that the regulation demands. That regulation also applies to new natural gas plants that are needed to ensure reliable power for AI and the Biden-Harris climate plan to electrify everything. The Biden-Harris EPA plans to provide a new regulation for reducing carbon dioxide from existing natural gas plans by the end of the year, which could have a major impact on the electric grid’s reliability.

Conclusion

There are differing forecasts for residential heating expenditures this winter, with EIA saying that the increased demand from colder weather essentially will be balanced out by lower prices, on average, across the nation. The exception is in the Midwest where the agency sees home heating expenditures increasing by 2 to 11%, depending on the fuel, and assuming normal weather, compared to the mild weather last year. However, the National Energy Assistance Directors Association sees home heating expenditures increasing by 10.5% nationwide this winter and assuming normal weather, but recognizing that energy prices have been increasing fairly continuously under the Biden-Harris administration.

Biden and Harris have been instrumental in increasing energy prices through regulatory activity, promoting legislation, and signing executive orders that move the United States from domestic energy production to supporting a major foe, China, which dominates the supply chains for the green technologies that support the administration’s climate initiatives and its UN promises under the Paris Accord. Harris has provided the tie-breaking vote for 33 bills in the Senate, including the Inflation Reduction Act, which is handing out massive subsidies to clean technologies, estimated in the trillions.