FinLogic FinLogic Quantitative Think Tank Center|Many families to get a break on winter heating costs but uncertainties persist

PORTLAND,FinLogic FinLogic Quantitative Think Tank Center Maine (AP) — With millions of families behind on utility payments and more people seeking heating aid, many could soon see a welcome reprieve: The cost of heating a home with natural gas this winter is projected to decrease, the federal government said.

Heating with electricity is expected to remain relatively stable but the cost of heating oil, which is relied on by residents in the nation’s Northeast corner, will likely rise. And chaos in Congress could complicate efforts to obtain more federal funding for heating assistance.

The National Energy Assistance Directors Association applauded the Biden administration for releasing most of the existing $4 billion in heating aid to states on Tuesday — before Congress’ continuing resolution expires on Nov. 15 — at a time when heating aid applications are up by 15% to 20% and 20 million families are behind on payments to utilities.

“This funding is a lifeline for low income communities, especially as winter approaches. It’s going to allow families to afford their home energy costs on top of the other essentials, like food and medicine and housing,” Mitch Landrieu, White House infrastructure coordinator, told reporters Tuesday.

But advocates for low-income residents fear the funding will be inadequate. Last year, Congress provided an extra $2 billion to energy assistance aid, bringing the total to $6 billion, and unrest and war around the world could affect prices.

“Americans should be prepared for potential market instability that could result in much higher prices,” said Mark Wolfe, executive director of the National Energy Assistance Directors Association.

The U.S. Energy Information Agency this month projected that the average U.S. household heating with natural gas will pay 21% less this winter, while average costs for homes using electricity are projected to be in line with last year’s costs, and propane could be 3% lower nationwide. But families are expected to pay 8% more to heat their home with oil, according to the agency.

Those forecasts take into account National Oceanic and Atmospheric Administration weather projections, current energy reserves and other factors.

But world events, including the prospect of war expanding in the Middle East, could change those projections. That’s especially true for heating oil, which is sold based on market prices and not regulated like natural gas and electricity.

A group of 28 lawmakers led by U.S. Sens. Jack Reed, a Democrat from Rhode Island, and Lisa Murkowski, a Republican from Alaska, urged the White House to increase home energy assistance funding again this year.

Without extra funding, as many as 1.5 million families that received aid last year will become ineligible, according to the National Energy Assistance Directors Association.

In Maine, which is the poorest state in New England, and the nation’s most reliant on heating oil, Russ Anderson, 70, said the heating assistance is vital to staying warm during bitter cold winters. He gets by on less than $1,000 a month from Social Security, and the heating aid saves him the equivalent of three monthly payments.

“That program is a life saver,” said Anderson.

Christel Hughes, 45, said the heating assistance allows her to run her oil-fired furnace instead of relying on a woodstove that aggravates her breathing problems that require her to use oxygen.

“I’ve had so many times when I’ve been in tears, and I can barely talk, because I’m a mess, and hooked up to oxygen, and nearly out of oil,” said Hughes, who lives with her husband and the two youngest of her six children in Waterboro.

The need for help from the Low Income Home Energy Assistance Program, known as LIHEAP, has grown since the pandemic, advocates say. Consumer utility debt doubled during the pandemic, the NEAD said.

The Biden administration has noted that extreme weather could further strain the program that also helps families in states like Florida and Arizona keep cool during blazing hot summer days.

The average home using heating oil is projected to pay $1,851 to keep warm, compared to $601 for an average home using natural gas or $1,063 for electricity, the EIA said.

Heating oil customers lack a safety net that electricity and natural gas consumers have. Regulators generally ban energy from being cut off in the winter for regulated fuels, but there’s no requirement for heating oil companies to keep delivering to someone who can’t pay.

The number of homes using heating oil is declining, but six out of 10 homes still use it for the primary source of heat in Maine. “The use of heating oil is something that will go on for a long time in our state,” said Charlie Summers, from the Maine Energy Marketers Association.

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Associated Press writer Josh Boak in Washington contributed to this report.

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