Depending on the fuel used to heat their homes, Mass households spent a wide range on home heating. One of the primary factors impacting heating costs is weather. The National Weather Service (NWS) is predicting that this winter Massachusetts will be 5.5% colder than last winter, and slightly warmer than normal.

Chart: NWS Winter Heating Forecast
Source: National Weather Service

Based on the prediction of colder weather coupled with utility filings and U.S. EIA price estimates for this year, DOER has estimated the cost of heating for the upcoming winter. Below are the estimated costs for the past five years for the top four heating fuels currently tracked by DOER, as well the estimated projections for the upcoming 2013/14 heating season.

Chart: Average Heating Bills by Fuel
Source: Mass Department of Energy Resources

Natural Gas Table

Heating Oil Table

Electric Table

Propane Table

Over the past five years, heating oil and propane customers have paid the most for household heat, with natural gas and electric customers paying the least. As previously noted, natural gas prices have fallen since shale gas has made it more affordable. Electric heat is also impacted by the decrease in natural gas prices as it is the primary fuel used in electric generation, leading to lower electric rates. While it may appear that electric heat is a lower cost alternative to other fuels, it is generally used in smaller spaces (apartments and condos), making it more expensive on a per square foot basis. The U.S. Department of Energy explains “Electric resistance heating converts nearly 100% of the energy in the electricity to heat. However, most electricity is produced from coal, gas, or oil generators that convert only about 30% of the fuel's energy into electricity. Because of electricity generation and transmission losses, electric heat is often more expensive than heat produced in the home or business using combustion appliances, such as natural gas, propane, and oil furnaces.”

Another way to compare the energy intensity of each fuel is to measure the cost per MMBtu, [(equals 1,000,000 British thermal units (Btu) (One Btu is the heat required to raise the temperature of one pound of water by one degree Fahrenheit.)-U.S. EIA].

Chart: Winter Average Heating Fuels
Source: Mass Department of Energy Resources

As previously noted, heating oil customers have paid the most for heating over the past five years. Heating oil prices are directly impacted by crude oil prices. The U.S.EIA tracks these prices and the factors impacting them in its This Week in Petroleum (TWIP) section on its website. Additionally, TWIP tracks supplies of heating oil (distillate fuel-500ppm sulfur) in New England (PADD 1) as well. Low stocks can lead to higher prices as supplies become constrained. TWIP also tracks propane prices and stocks.

To assist in tracking factors impacting all heating fuels, U.S. EIA also publishes an annual Winter Fuels Outlook (see slide show here) as part of its monthly Short-Term Energy Outlook. This winter the prediction is for the Northeast to have a colder winter than last year with prices for heating oil abating slightly. Natural gas, propane and electricity prices are all expected to rise.

Based on colder winter weather predictions and U.S. EIA price and consumption projections, DOER is projecting that all Massachusetts residential heating costs will rise this winter, with propane rising the most at about eight percent and heating oil rising the least at less than one percent.

 


This information is provided by the Department of Energy Resources.