Families will pay 17% more for home heating this winter, NEADA says

Home heating costs are continuing to rise, which may leave many lower income families struggling to pay their utility bills or falling behind on payments.

According to the National Energy Assistance Directors Association (NEADA), an organization representing state directors of the Low Income Home Energy Assistance Program (LIHEAP), the average cost of home heating is projected to increase by 17.2 percent over last winter’s prices – from $1,025 to $1,202. The increase marks the second year in a row home heating has seen major price increases. Between 2021-2022, and 2022-2023, the cost of home energy has risen by more than 35 percent, the highest prices in more than 10 years.

According to the U.S. Energy Information Administration (EIA), U.S. residential prices for electricity are forecast to be 14.8 cents per kilowatt hour in 2022, up 7.5 percent from 2021. The higher prices are reflective of increases in wholesale power prices driven by rising natural gas prices.

NEADA’s analysis of utility debt showed that about 20.1 million households were in arrears on their utility bills at the end of February 2022, equaling about $23 billion in debt. At the end of 2019, U.S. utility debt was about $10.5 billion, the organization said.

According to Mark Wolfe, executive director of NEADA, the rise in home energy costs this winter will put millions of lower income families at risk of falling behind on their energy bills. Those families will have to make the difficult decision, he said, between paying for food, medicine and rent, or utilities.

NEADA sent a letter to congressional leaders on Sept. 7 asking for a supplemental increase in LIHEAP of $5 billion to cover the higher cost of home heating and cooling.

“We are very concerned that the current federal funding for LIHEAP is not sufficient to meet the needs of low income families in light of the alarming increase this winter across all sources of home energy fuel – natural gas, electricity, heating oil and propane,” the letter said. “Based on NEADA’s analysis of energy price data, the average cost of home heating has increased by almost 38 percent, from $888 last year to $1,224 this winter. In order to address the concerns raised in this letter, we are requesting an additional $5 billion for LIHEAP for FY 2023: $4.0 billion to address increases in home heating and cooling costs and the continued high rate of arrearages and $1.0 billion to purchase efficient heating and air conditioning appliances to help families reduce their heating and cooling bills. “

NEADA said the total cost of home heating would increase from nearly $128 billion to an estimated nearly $150 billion, and would fall hardest on lower income households. The organization said the requested additional federal funding for LIHEAP would address increases in home heating costs, and assist with paying back arrearages.