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As temperatures dip, get ready for a spike in energy prices this winter

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Posted at 7:10 PM, Oct 14, 2021
and last updated 2021-10-14 21:10:29-04

DENVER — Before turning up the thermostat this winter, be warned: Heating your home could cost a lot more.

A report released this week by the U.S. Energy Information administration predicts a big bump in heating prices.

“We’re expecting an increase in the retail price of natural gas, and also we’re expecting a slight increase in consumption as well this year,” said Corrina Ricker, the lead modeler on the natural gas markets team for EIA.

The report projects households that use natural gas for heat will see a 30% increase in their rates on average. However, if the winter is colder than expected, those rates could see as much as a 50% increase.

“Really what's leading to the higher expenditures is the increase in the wholesale price of natural gas,” Ricker said.

Roughly 60.7 million homes across the U.S. rely on natural gas for heating, including the majority of Colorado homes. The report predicts that homeowners will spend about $746 this winter on heating with the increase.

For homes that rely on electricity for their heating, the report predicts an increase of 6% in their costs on average.

Meanwhile, for homes that rely on propane for warmth, the report predicts an increase in their costs of 54%.

For natural gas in particular, the pandemic played a big role in energy prices. As more people stayed home, there was less of a demand. As a result, production slowed significantly over the past year.

“There’s been a recovery in demand compared with last year, and also we’ve seen a record natural gas exports this year,” Ricker said. “At the same time, we’re only seeing mild growth in natural gas production.”

Dan Haley, the president and CEO of the Colorado Oil and Gas Association, also blames new federal and state regulations for the slowdown in production.

“This winter might be very difficult, and the problem is it hits the most vulnerable among us the most,” Haley said.

He believes the increase in natural gas prices will not only affect homeowners but also the entire supply chain, from fertilizer to grow crops to the trucking costs to ship products.

Haley says Colorado could play an important role in the energy solution since the state is sitting on the second largest reserves of natural gas in the country.

“We have enough energy in this country to supply our needs and to export that to other countries. We need the political will to do it. You shouldn’t freeze to death in this country,” he said.

Along with higher commodity costs, people could see a second bump in their energy bills this winter from their utility providers.

Across the state, providers are looking to temporarily raise rates between $2 and $10 to recover costs from a cold snap around Valentine’s Day this year that sent energy rates skyrocketing.

Hearing with the state’s Public Utilities Commission are set for November and December, and a final decision could be reached on them by February. If the rate increase requests are successful, people will be paying even more for their energy.

Even before the projected increase, Energy Outreach Colorado says it’s already seen a dramatic increase in the number of Coloradans asking for help paying their utility bills.

The statewide nonprofit has already seen a 100% increase in calls over the course of the pandemic. Executive director Jennifer Gremmert says the need for energy assistance has dramatically increased as people lost their jobs or were not able to work full-time.

The group works to help people pay their energy bills, make their homes more energy efficient so there is less waste and advocate for affordable rates on behalf of customers.

“We receive just under $10 million an emergency assistance through both the CARES Act and an additional state funding,” Gremmert said. “We ran out of that money. It was spent as soon as we got it, essentially.”

It’s now working to use some of the emergency rental assistance money from the state to help cover utility costs.

During the past legislative session, lawmakers also passed HB21-1105, which will add a 50 cents per month optional charge onto all investor and utility bills to help support families with energy assistance and efficiency programs.

“There’s just a tremendous amount of need. We’re seeing a lot of need with older adults who are home,” Gremmert said.

As energy prices rise, Gremmert advises families to start taking a closer look at energy use in their homes and considering steps to conserve energy. She also advises customers to take a closer look at their bills and, if they need help, to first call their utility providers to see if some sort of a payment arrangement can be made or if you can be put on an average bill.

For those who need help affording their bills, Energy Outreach Colorado can be reached at 1-866-heat-help or 1-866-432-8435.

Starting on Nov. 1, customers will be able to apply for the federal LEAP program to help with energy assistance. If customers do not qualify for that type of aid, Energy Outreach Colorado also has funding set aside to help.