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Consumers could be forced to spend a total of over $14 billion more on electricity and heating bills this winter than they did a year ago, according to a new report from the Consumer Energy Alliance (CEA).
It comes at a difficult time for the country as consumers grapple with painfully high inflation, which just accelerated in September, rising 8.2% year-on-year. That was the fastest pace in four decades.
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The rise in heating bills this winter will only add to the pressure on households, according to the CEA. To support its point, the advocacy group cited recent data from the Energy Information Administration (EIA) estimating how energy prices will rise across the board.
The rise in heating bills this winter will only add to the economic pressure on households, according to the Consumer Energy Alliance. (Yui Mok/PA Images via Getty Images/Getty Images)
“Predicting month-long weather and energy trends is not an exact science, but it is highly likely that global dynamics affecting energy commodities will result in higher U.S. heat prices this winter,” EIA Administrator Joe DeCarolis said in one recently released statement.
Households that rely on natural gas as their primary heating source will spend an estimated $930 this winter due to expected higher prices and consumption, a 28% increase from last year, according to the EIA.
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Meanwhile, consumers are spending an estimated $2,354 on heating oil, according to the EIA, up 27% from 2021. Additionally, power consumption is estimated to increase by 10% this winter, costing consumers approximately $1,359. The EIA also estimated consumers will spend $1,668 on propane, a 5% increase from last year.
Companies like Consolidated Edison Inc., which powers about 10 million people in New York City and Westchester County, have already begun “urging customers to take actions now that can help them lower costs than market prices this winter.” for power and energy to manage natural gas is expected to be significantly higher.”
According to Energy Information Administrati (Gado/Getty Images / Getty Images)
The CEA said “poor policy decisions” by the government had fueled price hikes, although other experts, including the EIA, have argued that there are a number of global factors affecting energy commodity prices.
“By enacting a moratorium on oil and gas development on federal land, rescinding future federal lease sales, blocking pipelines, and restricting energy infrastructure development, the strategic advantage enjoyed by the United States after becoming the world’s largest oil producer two years ago has – and natural gas producers, all but faded,” said the CEA.
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Nick Loris, vice president of public policy at C3 Solutions, told FOX Business that the Biden administration, because of “its anti-sale policies like canceling lease sales and [the] Keystone XL Pipeline and the introduction of new regulations that limit investment.”
He noted that if the administration had not revoked approval for the northern half of the Keystone XL pipeline, it would have been operational and “could have accounted for about half of the recently announced OPEC+ production cuts.”
Still, Loris said it was “disingenuous” to pin the blame solely on the Biden administration because “it paints an incomplete picture.”
Energy companies have already begun “urging customers to take steps now that can help them control costs this winter as market prices for electricity and natural gas are expected to be significantly higher.” (istock / iStock)
“The reality is that there are many reasons why prices are where they are,” he said, adding that the industry is “suffering from some of the same issues that other industries are suffering: supply chain issues and labor shortages.”
“You can’t ignore Putin’s war in Ukraine either,” Loris said.
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In fact, the EIA told FOX Business that Russia’s actions have “created significant market uncertainty as much of Europe has reduced energy imports from Russia.”
In addition, the EIA noted that the upcoming European Union import bans on crude oil from Russia in December and petroleum products in February are also having an impact.
The announced OPEC+ production cuts also increased “the potential for global oil production to be below our forecast, which could push up prices for crude and other energy commodities,” the EIA added.
That said, the agency said global natural gas and coal stocks “remain relatively low, contributing to above-average prices for these commodities and for power.”