Syracuse, N.Y. – If you thought your heating bill was bad last winter, prepare for a shock. National Grid today predicted the average household will pay $943 for natural gas heating this winter -- an increase of $263, or 39%.
That’s the highest that heating bills have been in 16 years. And this year’s increase follows a similar hike a year ago, when heating costs rose from $496 in 2020 to about $680 last year.
Utility officials, who normally provide a winter forecast in October, said they are spreading the word early this year to give customers a little more time to get ready.
“These prices are significantly higher than they were last year,’’ said Melanie Littlejohn, vice president for customer and community engagement.
“We wanted to offer as much time as possible, so that they might be able to better prepare homes and certainly assess budgets for the winter heating season,’’ Littlejohn said Tuesday.
Some 88% of the higher heating costs can be attributed to soaring wholesale natural gas prices, Littlejohn said. National Grid passes on the cost of gas to customers without markup, making its profit on the delivery charge. About 12% of the customer’s cost increase stems from higher delivery charges that took effect in July.
The utility’s forecast is based on a typical residential customer using 713 therms of gas for the five-month heating season, from Nov. 1 through March 31. Actual costs could be different, especially if winter weather varies from normal. Extremely cold weather would likely add more to the cost.
The problem is not unique to National Grid. Utilities in many parts of the United States are forecasting significant bill increases this winter.
Electricity prices also are expected to rise, but not as harshly. The average Central New York household is expected to pay $22 more for electric power over the five-month season, an increase of just 5%. (In Eastern New York, electricity prices will rise more steeply, by 22%, the utility predicts.)
Wholesale natural gas prices are at a 15-year high nationally, said Juan Alvarado, a market analyst from the American Gas Association. In part, that’s because of rising demand for natural gas at power plants, which are burning the fuel to make electricity during summer at higher rates than before, he said.
In New York and the rest of the Northeast, there is another challenge that pushes prices extra high. The limited number of gas pipelines serving the region adds to the transportation cost and creates the potential for price spikes when demand increases due to cold winter weather or other factors, Alvarado said.
Wholesale gas this winter is forecasted to cost more than twice as much by the time it reaches downstate New York as it will at a major hub in Texas, Alvarado said.
This year’s heating costs will be the highest in Upstate New York since the gas industry stepped up the use of fracking to reach deep deposits and vastly increased the supply. The last time National Grid bills were this high was 2006, when the average bill hit $984, said Kellie Smith, director of New York pricing.
The harsh outlook arrives as National Grid and other New York utilities are still recovering from a deluge of unpaid bills triggered by the Covid-19 pandemic.
State utility regulators over the summer implemented a plan to pay off $587 million of unpaid bills racked up by low-income customers since the pandemic arrived in 2020. The state Public Service Commission is still studying what to do about another $1.7 billion in overdue bills owed by non-low-income households and businesses.
Littlejohn urged customers to look at whether their incomes qualify for the utility’s Energy Affordability Program, which provides discounts to low-income customers, or for the federal Home Energy Assistance Program. Customers who do not qualify might want to consider budget billing, which allows payments to be spread evenly over the year, Littlejohn said.
Information on the utility’s programs is available on its website for by calling a customer advocate at 1-800-642-4272.
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