Winter is coming and energy bills are climbing. 'Everything just keeps going up.'

By Myra P. Saefong and Andrew Keshner

Utilities want to raise your rates even more

Household heating costs are set to pile up this winter.

Carolina Bustos has a nighttime routine. When it's after 9 p.m., it's time to turn on her dishwasher and crank up her air conditioner to cool down the Houston nights.

By running the appliances in off-peak hours, the tactic is supposed to save her money.

Still, in the past two months, she says her electricity bill has doubled, up to at least $400.

"Everything just keeps going up," Bustos told MarketWatch. She's been leaning on her credit cards more to make ends meet. "I'm not too sure there's anything I can do."

Expensive utility bills have become an increasingly sharp thorn for Americans' wallets, but warmer weather this winter and energy assistance programs can help.

Average heating costs for U.S. households are expected to rise by 8.3% this winter compared to last winter, according to a recent report from the National Energy Assistance Directors Association, a policy group for state directors of the federal Low-Income Home Energy Assistance Program.

Those who use heating oil to heat their homes, however, may see their costs rise by 50% this winter, the report said.

Families are facing an "energy affordability crisis," said Mark Wolfe, executive director of NEADA, with electricity prices continuing to rise faster than inflation and households using heating oil for heat facing an "extraordinary price shock."

At the same time, utilities across the country have requested $23 billion in rate increases through September. This includes a record-breaking $4.5 billion in rate increases during the third quarter, according to PowerLines, a consumer-education organization.

For working families and seniors living on Social Security, "there simply isn't enough room in the household budget to absorb increases of this magnitude," said Wolfe.

The forecasts and rate-hike requests come in a midterm-election season where everyday living costs are a major campaign theme.

Utility costs are up there with healthcare, gas prices and food costs when it comes to consumers' affordability worries, a KFF poll showed Tuesday. Half of voters said they were at least somewhat worried about paying for monthly utilities, including 18% who said they were "very worried" about being able to afford the necessary costs.

It could be a while before the latest rounds of rate-hike requests filter into utility bills, said Charles Hua, founder and executive director of PowerLines. It's still not clear how many public-utility commissions will ultimately approve of the requests.

But higher prices are coming in some form.

Electricity costs tied to heating for the winter - from mid-October to mid-March - are expected to climb by 7.2% from last year, according to NEADA.

Out of all the heating sources, however, it estimates that households using heating oil will be the hardest hit, paying about 50% more in heating costs than last winter. It expects the average household to pay $2,627 this winter to heat a home with heating oil, up $878 from last winter as wars in Iran and Ukraine have disrupted petroleum markets and pushed heating-oil prices sharply higher.

The Energy Information Administration, however, forecasts a smaller 19% rise in heating bills, to an average of $1,794 this winter for U.S. households using heating oil to heat their homes, in part citing assumptions for warmer temperatures in the Northeast, where about 82% of U.S. households use heating oil as their primary heating fuel.

Super El Niño's silver lining? It depends.

A potentially historic El Niño weather pattern may take some sting out of winter utility bills. But that's no guarantee and it depends where people live, experts said.

It could be the strongest El Niño since 1950, according to AccuWeather. That could mean above-average temperatures in most of America's northern states, according to its winter forecast.

Parts of Minnesota, Wisconsin and Michigan could see seven- to nine-degree higher average winter temperatures compared to last year, said Paul Pastelok, AccuWeather's lead U.S. long-range forecaster. That's where heating bills could potentially get the most help from milder temperatures, he said.

Yet lower heating demand may not mean paying less, due to energy prices and household energy use, AccuWeather said.

People in Upper Midwest states might pay less, but households in Southern and Gulf Coast states might end up paying more, said Alexis Abramson, dean of the Columbia Climate School. The weather pattern may produce wetter weather, which could be colder.

Many households in the region tend to be heated by electricity, she noted. "Electricity prices are up in most parts of the country. Definitely in that part of the country."

Utilities in Southern states asked for $2.2 billion in rate hikes during the third quarter, according to PowerLines, comprising the steepest requests in the country.

Cost burdens - especially for heating fuel

Still, heating-oil prices near record highs are hard to ignore.

Heating oil costs around $6.19 a gallon, close to double the mid-$3 range it was priced at on Jan. 1, said Ken Williams, president and owner of Scott-Williams, Inc., a heating-fuel delivery and heating and cooling installation, maintenance and repair company based in Quincy, Mass.

Household heating-oil fuel tanks hold about 275 gallons, with a medium-sized home getting around three deliveries of 200 gallons each per year, he said. That means the cost of one delivery has climbed from around $700 to just over $1,200.

Some customers might have paid each delivery cost in full, but in order to help them manage the price increase, Williams said his company has shifted customers to monthly payment plans so the costs are easier to absorb and customers have a better idea of what to expect to pay each month.

Nationwide, there are programs that help households with energy costs to meet winter heating needs.

Energy assistance comes in the form of U.S. dollars, not gallons, so with the higher prices for heating oil, 'those dollars are only going to go half as far as they did a year ago.'Ken Williams, Scott-Williams, Inc.

In Maine, which is among the states most dependent on heating oil, the state's housing authority, aka MaineHousing, administers the federal Low-Income Energy Assistance Program. It helps around 35,000 to 40,000 households a year manage their energy costs, with assistance approval based on income, said Scott Thistle, communications director at MaineHousing. For the state, a household of four earning less than a median annual income of $73,213 would qualify.

Maine's energy assistance program is designed to give each eligible household a "meaningful" dollar benefit amount, said Thistle. But when the price of fuel approaches $7 a gallon, then the "purchasing power of that benefit amount goes way down, and the amount of fuel somebody gets goes way down."

Heating-oil dealer Williams said energy assistance comes in the form of U.S. dollars, not gallons, so with the higher prices, "those dollars are only going to go half as far as they did a year ago."

-Myra P. Saefong -Andrew Keshner

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10-10-26 0900ET