Unless we have another balmy winter, expect to pay a little bit more to heat your home as the temperatures start dropping.
But not too much more, thanks to falling prices for natural gas. Heating costs likely will be the second-lowest for any year in the last decade and about $260 less than the average over the last 10 winters.
National Fuel Gas Co. said Wednesday that it expects the average heating bill in the Buffalo Niagara region will rise by a little less than 7 percent – or about $42 – from last winter.
Yet all of that increase is because the Amherst-based energy company is assuming that temperatures will return to normal this winter after averaging about 21 percent warmer than normal last winter. Record warmth last winter meant that consumers used less natural gas to heat their homes.
In short, natural gas prices are down this year, but consumers will use more gas if we have a more normal winter.
If temperatures return to normal, National Fuel forecasts that an average customer will pay about $657 to heat a home from November to March, as the increased consumption stemming from the more typical winter weather offsets a nearly 12 percent drop in the company’s expected gas costs. While heating bills for winter are expected to be more than last year, they’re still a far cry from heating costs that routinely topped $1,000 from 2005 to 2009.
“They may experience a price increase from a year ago, but it still is near the lowest heating costs in the past decade,” said Karen L. Merkel, a National Fuel spokeswoman.
If those projections hold true – heating costs could rise if the winter is unusually cold or drop further if temperatures are mild – it would be the fourth straight winter of relatively low heating bills in the Buffalo Niagara region. Heating costs during each of the last three winters have been almost 40 percent lower than they were during the winter of 2005-06, when heat bills averaged a record $1,124.
The reason is the continued decline in the price of natural gas, thanks to robust supplies bolstered by the boom in production from the Marcellus Shale and elsewhere in the country.
“National Fuel’s cost for natural gas is the lowest it has been in more than 10 years, and this is largely attributable to the abundant supply of domestic natural gas, namely the Marcellus Shale,” Merkel said.
The commodity price of natural gas stood at $3.47 per 1,000 cubic feet Wednesday, down by 2 percent from a year ago and 42 percent less than in January 2010. National Fuel’s gas costs differ because the utility buys some of its gas in advance and stores it underground until it’s needed, and some of it through advance-purchase contracts or purchases on the spot market, Merkel said.
The commodity price is important because it accounts for a little less than half of the total price that National Fuel’s residential customers pay. Operating costs associated with delivering the gas to customers, taxes, the company’s profits and interest make up the other half.
National Fuel, like all utilities in the state, does not make a profit on the natural gas that it sells its customers. The utility makes its money on the rates, negotiated through the State Public Service Commission, that it charges to deliver that gas to homes and businesses.
It also helps that Western New Yorkers have steadily reduced the amount of natural gas they use to heat their homes, through more efficient furnaces and water heaters, and programmable thermostats. National Fuel’s average residential customer now uses about 45 percent less gas per year than in 1973.
About 86 percent of the households in Buffalo Niagara heat with natural gas, the U.S. Census Bureau says, while 7 percent heat with electricity and 3 percent with fuel oil.
The federal Energy Information Administration forecasts that heating oil customers will pay the highest prices ever this winter – an average of $2,494, nearly $200 more than the record set in 2010-11.
The Associated Press contributed to this report. email: firstname.lastname@example.org