Home heating bills on the rise

Price of oil heat this winter forecast to jump 22 percent, or $319. Natural gas users can expect to pay 10 percent more - report.

By Steve Hargreaves, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- No matter how you heat your house, this year will cost you more than last, according to a government report Tuesday.

Americans will spend $977 to heat their homes this year, averaging for all fuels across all sections of the country, according to the Energy Information Administration.

That's nearly 10 percent higher than the $889 spent last year and the highest amount ever, not adjusted for inflation. The previous record was $948 in 2005-2006, according to EIA.

Americans who use oil heat will be hit the hardest. Due mostly to higher crude prices, nationwide-average oil heating bills this winter are expected to be 22 percent higher than they were a year ago, EIA said.

That translates into a $319 seasonal increase in average heating bills, although actual amounts will vary depending on region and home size. About 7 percent of all Americans, mostly in the Northeast, heat their homes with oil.

Natural gas users, accounting for more than half of U.S. households, can expect to pay 10 percent, or $78 more this winter. Propane users can expect to pay 16 percent, or $221 more; electricity users will see a 4 percent, or $32 rise. About 30 percent of U.S. homes are heated with electricity, while about 5 percent use propane.

Electricity and natural gas are not necessarily cheaper than heating oil, but they're used more widely in the south, where it's not as cold.

The rise in home heating costs has not gone unnoticed by consumer groups.

Mark Cooper, research director for the Consumer Federation of America, said he supports a provision in the energy bill in Congress that calls for utilities to get 20 percent of their power from renewable resources by 2020. Such a mandate, he said, would reduce the demand for natural gas used for generating electricity.

"Most of the studies show there would be a significant drop in the price of natural gas," he said.

The proposal faces opposition from Southeastern utilities, which say the renewable resources in their region are more limited.

Cooper also advised people to tune up their furnaces before winter as a way to save money.

EIA said the increase in home heating oil costs is largely due to the rise in oil prices.

Crude oil prices are about 30 percent higher than they were a year ago. Analysts attribute the price jump to a number of factors: the falling value of the dollar, fears over Gulf of Mexico storms, conflict or potential conflict in Iran, Nigeria and Venezuela, speculative investing and surging worldwide demand and limited supply.

In addition to citing higher fuel prices, EIA said this winter is projected to be 4 percent colder than last - although still about 2 percent warmer than the 30-year average. Colder temperatures this winter compared to last account for some of the rise in heating costs. Top of page