Think you paid too much to heat your home last year? Wait until this winter

New York
CNN Business

Jason Bell saw his electricity bills rise earlier this year and decided to switch to a budget plan to spread the costs over 12 months. As she and her husband, Shane, heat their home in Lake Harmony, Pennsylvania with electricity, she thought it would help them get through the coming winter.

This did not happen. The couple now pays $472 a month on the budget plan, up from about $290 a month last winter. This led Bell to pursue a part-time job as a police officer in addition to his full-time position as a state dog warden. The increase, along with rising costs for food and other necessities, led Bell to debate whether to take another part-time gig.

“The prices of everything have gone up to the point where part-time work may not be enough to cover the increase in bills that we’re budgeting for,” said Bell, 41, who works as a certified nursing assistant while her husband studies for a nursing degree.

Like Bell, many Americans are bracing for the chilly reality that they’ll have to shell out more to keep their homes warm this winter.

According to the National Association of Energy Assistance Directors, households are expected to pay an average of 17.2% more for home heating this coming season than last winter. This comes on top of a huge price increase last winter and represents a two-year increase of more than 35%.

Those with natural gas heat are facing the biggest increase, and their costs are expected to increase by 34.3% to $952 during the winter heating season, the association said.

The mark for heating oil is expected to increase by 12.8% to $2,115. Those with electric heating can expect a nearly 7% increase to $1,328.

Some people may not realize that it will cost more to heat their homes this winter, especially since gasoline prices have been falling for months.

“In many people’s minds, gasoline and home energy are the same,” said Mark Wolfe, executive director of the association. “The surprise here is that the prices of heating fuels will go up.”

Energy prices are rising in part because of recurring heat waves that have scorched much of the United States this summer. This has forced utilities to draw down supplies of natural gas, which is used to generate electricity, adding to the strain on inventory levels that are already below historical averages.

Oil prices, which rose last winter after Russia invaded Ukraine in February, are easing but still higher than last year.

Dan Pfoltzer paid his landlord $150 a month to cover the cost of the oil in the small house he rented in Nassau, New York. However, Pfoltzer, knowing that oil prices rise in the summer, increased it to $310 a month in order not to have a large bill in the winter.

“Until this tank runs out, the money will be for the next tank,” said Pfoltzer, 71, who lives alone and drives a school bus.

Still, the mounting cost means he won’t be able to cover all of his other bills, including those stemming from cancer treatment a few years ago. To keep oil usage as low as possible, plans to turn the thermostat down a few degrees to 67 and dial it in when it’s cold.

In coastal Maine, Dale Christensen, Sr. and his family plan to use electric blankets in their living room and bedrooms during the winter to minimize heating costs. The 53-year-old is also considering buying space heaters.

Christensen, a rural mail carrier, is already reimbursing his landlord for the $900 he spent on filling the oil tank when they moved into their rental house earlier this year. He expects to get a $1,300 bill late this fall to fill it up for the start of winter, and possibly two more later in the season.

Dale Christensen, Sr.  expects to have to use electric blankets to keep warm this winter in Maine.

Heat wasn’t a problem for the Christensens last winter because they lived in an apartment with heat included, although the couple had to make sure their elderly parents, who were on fixed incomes, stayed warm in their home.

“Every year we worry our parents about heating costs,” he said. “There’s more stress and tension this year because of course we have to pay for our heat now.”

The family applied for some of the oil costs from the Low Income Home Energy Assistance Program, known as LIHEAP. But Christensen doesn’t believe it until he hears whether they’ve been confirmed.

To make matters worse, LIHEAP has very little money in its coffers this year, even though nearly 20 million American households, or 1 in 6 households, are behind on their utility bills.

The American Rescue Plan Act, which Congress approved in March 2021, provided $4.5 billion in support to the program for this fiscal year, on top of $3.8 billion in regular appropriations. The stimulus money was mainly used to reduce the spike in debt caused by the pandemic.

Both the House and Senate are considering appropriating $4 billion for LIHEAP for fiscal year 2023, although lawmakers have yet to approve a federal government funding bill for next year. The Biden administration has asked for an additional $500 million for LIHEAP on top of what lawmakers are considering, while the Energy Directors Association has asked for $5 billion more.

State energy directors say requests for help came in even before the cold weather hit.

At this time last year, the customer service center of Energy Services Inc. in Wisconsin was getting more than 300 calls a day. Now, non-profit The group, which is the primary LIHEAP administrator in the state, fields more than 1,000 calls a day. A family of three earning about $52,000 a year eligible as long as funding is available.

“The need has not disappeared. It’s accelerating at such a rapid pace,” Timothy Bruer, Energy Services CEO, who noted that his group will run out of LIHEAP crisis aid money in fiscal year 2022 for the first time in three decades. “Keeping heat and power on, a basic necessity, has become an unaffordable luxury for tens of thousands of Wisconsin’s most vulnerable, at-risk households.”

The Worcester Community Action Council in Massachusetts usually doesn’t start accepting LIHEAP applications until the temperature starts to drop, said Mary Knittle, director of energy resources for the nonprofit organization. group. But This year, they’ve come “fast and furious,” he said, noting that first-time applications for the upcoming winter are up 60% compared to this time last year.

Residents are bracing for higher fees. An energy provider in the state sent an email to its customers saying that their electricity bills will be about $114 more for average usage each month than last winter – a 64% increase. He cited high electricity supply prices as the main reason.

Even those who do not heat with electricity will be affected, as electricity is usually required to run home heating systems.

Martin Silva, Sr. expects to pay about 30% more to heat his home this winter.

Meanwhile, Knittle will have very little money to hand out this winter, although an appropriation has yet to be determined. Last fiscal year, his agency received $24.6 million from LIHEAP and $13.9 million from the since-defunct America’s Rescue Plan.

“The concern is very, very high,” Knittle said, noting that in Massachusetts a family of three earning about $68,500 qualifies for assistance.

Martin Silva, Sr., is hundreds of dollars behind on both the water and electric bills for the home he shares with his wife in Bethlehem, Pennsylvania. He expects natural gas to cost about $130 a month to heat his older, older home, up from about $100 last year.

Silva, a dump truck driver, hopes to pay back his debts by further cutting expenses, including trips twice a month to see his ailing, elderly parents in New York. But rising costs left him feeling “crushed”.

“No matter how hard you try, you can’t get ahead,” Silva, 51, said.

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