![]() Wholesale price changes for heating oil and propane are passed to consumers quickly. These price increases contribute to our forecast that residential natural gas prices this winter will be 22% higher than last winter and that residential electricity prices will be 6% higher than last winter.įor the petroleum-based fuels, the price picture is mixed. The Henry Hub natural gas spot price on September 30 was $6.40 per million British thermal units (MMBtu), which is 36% higher than last winter’s average. Even with this lag, increases in spot commodity prices over the past year are pushing up retail prices this winter. Wholesale price changes affect residential prices for natural gas and, particularly, electricity prices over relatively longer periods because these costs are incorporated into regulated rates. Strong demand growth resulted from growing liquefied natural gas (LNG) exports as well as a new market dynamic driving strong domestic natural gas demand: limited natural gas-to-coal switching in the electric power sector. Natural gas prices rose sharply earlier this year because consumption growth outpaced production growth in the first half of 2022. On average, we expect wholesale commodity natural gas prices to be higher this winter compared with last winter, which leads to higher prices for both natural gas and electricity in the retail market. ![]() Because electricity has the widest range of uses among the fuels, electricity consumption tends to be less sensitive to changes in temperature than other fuels. For example, the expenditures included for households that heat primarily with electricity in this report would also include electricity used for appliances and lighting. We forecast total winter expenditures for all uses for each primary heating fuel, not just the portion attributable to heating. To develop our forecast household expenditures for natural gas, heating oil, electricity, and propane in this report, we group households by primary space heating fuel. We use our Residential Energy Consumption Survey (RECS) as a baseline to estimate average energy consumption during the winter in each region. Each fuel also has its own market structure, physical infrastructure, regulations, and limitations that can affect the connection between wholesale and retail market events. Fuel expenditures for individual households depend on the size and energy efficiency of individual homes and their heating equipment, along with thermostat settings and weather conditions. The average household winter energy expenditures discussed in this supplement are broad measures for comparing recent winters and reflect energy expenditures for all uses, not just heating. ![]() Weather is a key input to our energy consumption forecast and based on the weather forecast from the National Oceanic and Atmospheric Administration (NOAA), we expect increases in winter energy consumption. ![]() For this outlook, we define the winter heating season as October through March. Given that rate of inflation, changes in expenditures and prices adjusted for inflation would be roughly 6%–7% less than the values reported.īackground. Based on forecasts for the Consumer Price Index from the S&P Global macroeconomic model, we assume inflation will average 6%–7% this winter compared with last winter. The price and expenditure values presented in this report are in nominal terms. regions and fuels for this winter ( Winter Fuels Outlook table). Higher forecast energy expenditures are the result of higher fuel prices, combined with higher heating demand because of a forecast of slightly colder weather than last winter.įorecast expenditures also vary significantly across U.S. Many households across the United States are likely to spend more on energy in the winter of 2022–23 compared with recent winters.
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