Winter energy update: You could see a 33% spike in heating costs!

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Winter energy update: You could see a 33% spike in heating costs!
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Ready or not, winter is ready to make its grand entrance into your life over the next few weeks — if it’s not here already for you.

But if the thought of six months of jacked-up energy bills sends you hurtling into a polar vortex of depression, stop and take a deep breath…

We’ve got several ways you can fight back against rising prices!

RELATED: Georgia natural gas guide

Natural gas prices could spike by 16%, heating oil by 33%

The U.S. Energy Information Administration (EIA) is out with its latest Short Term Energy Outlook.

The news isn’t rosy for the nearly half of American households that use natural gas, and it’s even worse for those who use oil to heat their homes.

According to The Wall Street Journal, the price of natural gas is trading at a four-year high at the same time that we’re seeing natural-gas reserves hit their lowest level since 2005. That classic supply-and-demand crunch has the potential to really put the hurt on your wallet.

In fact, the EIA projects that if temperatures are just 10% colder than expected, people who rely on natural gas to heat their homes could pay 16% more than they did last year.

energy rates
EIA

But that’s nothing compared to what could happen with heating oil, the price of which may take an outsize 33% hike if temps are just 10% colder than anticipated!

Of course, the good news here is that if winter weather is warmer than anticipated, you could be paying less than last year.

In fact, natural gas customers on a variable-rate plan could pay 4% less than during the winter of 2017-2018.

However, you won’t realize any savings if you use heating oil — even if the weather is on the nicer side; sadly, you’re still likely to wind up paying a 7% premium vs. last year.

So the EIA’s projections show the amount of pain your wallet will feel — or not — as we move through the winter heating season, which typically runs from October through March.

But no matter what the weather does, there are a few ways you can lower your winter energy bill.

Shop your energy rate in a deregulated state 

Residents of more than two dozen states are free to shop around for the best natural gas or electricity rates because their energy markets have been deregulated.

If you see your state on the map below, contact your state’s Public Service Commission. They’ll have published monthly energy prices from all the providers.

You can use these quotes as a one-stop shop to do all your comparison shopping for energy.

Lock in a fixed rate as soon as possible

When you’re shopping rates in a deregulated state, you’ll notice that you have the option to lock in a rate on fixed plan or to stay floating on a variable plan and pay whatever the rate happens to be that month.

Money expert Clark Howard has always recommended that people lock into a fixed rates — and this year is no different. You can typically lock in a fixed rate for 6 to 24 months, though 12 months is the most common term.

“My advice is to lock in with a low-cost natural gas provider as soon as possible,” Clark says. “Any number of factors like a cold winter, low supply of natural gas and high demand for natural gas exports overseas could cause prices here to rise even more as we move through the winter.”

Remember, there is no difference between a therm or a kilowatt from one company vs. another. The only difference is the price! So shopping the market is the key to saving money on a bill that comes every month like clockwork.

Get a programmable thermostat

Want to reduce heating and cooling costs in your home by 25% or 30% during both the winter and the summer months? Try a programmable thermostat. The Nest smart thermostat is one of the most popular of these devices.

Your local utility may subsidize the cost of a Nest for your home. Sometimes you can even get one entirely for free!

Finding out about potential subsidies is simple; it only takes a one-second web search by zip code on the Nest site.

Right now, there are special discounts for Liberty Mutual customers and Airbnb hosts across multiple zip codes in multiple states.

Get tax credits for energy-efficient upgrades

You can qualify for hundreds of dollars in federal tax credits for installing energy-efficient appliances and upgrades.

For example, you can get a tax credit of 30% (with no upper limits) to cover the cost of a solar energy system through 2019.

Additional quick tips to save money on energy:

  1. Seal drafts around doors and windows using weather-stripping or caulking.
  2. Make sure your attic is well insulated.
  3. Get a water heater blanket if your unit is over five years old.
  4. Use natural sunlight for heating when available.
  5. Make sure your vents are not blocked by furniture.
  6. Try zoned heating and cooling. Close off rooms and vents in rooms that are not in use.
  7. Close off your fireplace and the flue on your chimney.
  8. Consider warming your bed with an electric blanket on chilly nights instead of bumping up the thermostat.
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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the New York Times #1 bestseller Living Large in Lean Times. As a single widowed parent of two young children, he strives to bring unique savings tips to men and women like him who must face life without their spouses. He can be reached at [email protected]
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