- According to the National Association of Energy Assistance Directors (NEADA), American households will pay $1,200, on average, to heat their property and electricity will rise 7.5%
Like every year, when winter approaches in the United States, people must prepare financially so as not to suffer from the cold and heat their home, more so in some states than in others. With high inflation sweeping the country, your wallet will feel colder as heating and electricity costs are expected to be the highest in 10 years.
According to a forecast from the nonprofit National Energy Assistance Directors Association (NEADA), the average American household will pay about 17% more this winter to heat their property, reaching a 10-year high of about $1,200. dollars per household. Likewise, residential electricity bills in the United States will also increase by approximately 7.5% from 2021, according to the US Energy Information Administration.
Mark Wolfe, executive director of the National Association of Energy Assistance Directors, told CBS News that the forecasts are in line with a year marked by inflation, where high energy costs have hit homeowners. Not surprisingly, owning a home is not synonymous with wealth, so low- and middle-income consumers will be hit the hardest.
“There is a lot of pain. This is the second year of high home heating prices,” Wolfe said. “In general, low- and middle-income families are suffering.”
According to the expert, the rise in energy costs is related to Russia’s war in Ukraine, which has disrupted natural gas flows to Europe, and a hotter-than-normal summer in the US that caused power companies cut their supplies of natural gas, Wolfe said.
Homeowners who use heating oil to heat their homes will face the highest costs this winter, according to the forecast. The typical bill will rise nearly 13% to $2,115, Wolfe’s group projects.
Propane heating bills are projected to rise 15% to $1,828. Homeowners who use electricity to heat their properties will see a 7% increase to $1,328, and those who rely on natural gas will see their bills jump 34% to $952, the group estimates.
Although the price of oil has fallen since hovering around triple digits in June, the raw material is still more expensive than it was a year ago. For example, motorists have welcomed three months of falling prices at gas stations, but are still paying 15% more than the previous year, according to data from the American Automobile Association (AAA).
The Bureau of Labor Statistics (BLS) has reported a slight decline in inflation over the past two months, from its year-on-year high of 9.1% in June. In July and August it fell to 8.5% and 8.3%, respectively. However, core inflation, which excludes volatile food and fuel prices, actually accelerated from 5.9% in July to 6.3% in August.
This is transcendental, because the winter season usually has the characteristic of strong discretionary spending. Nearly 4 in 10 consumers said they plan to spend less this holiday season than they did last year, according to a new survey from Mass Mutual.
But if discretionary spending declines in an effort to save a few dollars, that money could easily slip away to pay utility bills to heat homes. Unless you want to endure the cold to save so your wallet doesn’t freeze to zero dollars.
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.