Mild forecast for Pa. winter heating bills in peril as natural gas prices surge

What initially appeared to be a small decrease or relatively minor increase in winter heating bills this season for those using natural gas or electricity may be taking a turn for the worse.

The natural gas winter heating cost in the Northeast was expected to decrease 1% and electricity was expected to increase 3% in the U.S. Energy Information Administration Winter Fuels Outlook report published in mid-October.

Since then, however, the price of natural gas has surged beyond the level anticipated in the report, due in no small part to brisk exports. As many electricity generation plants are powered by natural gas, both heating energy sources share cost trends.

The Winter Fuels Outlook is based on a natural gas average of almost $3.90 per million British thermal units. However, last week, natural gas futures for December delivery hit $4.64  per million British thermal units and January hit $4.84, according to the Wall Street Journal.

About 80,980, or 37.2%, of Lancaster County homes were heated by electricity in 2024, according to the U.S. Census Bureau American Community Survey, while about 73,989, or 34%, use natural gas.

READ: Pa. program that helps low-income families pay for heat remains on pause. Here’s what to do now

When will we find out more here?

Dec. 1 is the next time for the electricity and natural gas utilities that serve most of Lancaster County – PPL, Met-Ed and UGI  – to change the portion of their bill that represents the price of energy. By law, these costs are passed on to consumers at no markup.

PPL will increase its residential rate Dec. 1 by about 3.7%, costing about $4.63 per month more for 1,000 kWh of electricity, the company reported when contacted by LNP | LancasterOnline this week. Met-Ed’s residential rate will go up about 8.9 %, costing about $7.97 more a month for the same amount of electricity.

Back in May, UGI announced that it would keep its natural gas price flat but anticipated a 1.1% increase Dec. 1. Contacted this week and asked if that prediction stands, the company said details would be released on or shortly before Dec. 1.

Supply rate changes Dec. 1 are different from changes in the utilities’ base rates. Base rates represent the cost of maintaining and operating the systems needed to get energy to customers, not the energy itself.

In late October, a PPL base rate hike request that would have increased residential bills by close to 7% a month starting Dec. 1 has been suspended for up to seven months while state regulators investigate. A base rate increase request by UGI Utilities, totaling $110.4 million a yea,r was scaled back by the state Public Utility Commission to $69.5 million and approved this year. 

Why are prices going up?

The major factor pushing prices higher is liquified natural gas exports, according to the EIA and the Wall Street Journal.

Average daily export volume is expected to increase 24% compared to last year and new liquified natural gas export facilities are coming online faster than initially anticipated, according to the EIA.

The groundwork for this trend was set when the U.S. pushed to ship natural gas to Europe and Ukraine after Russia’s invasion led to sanctions and interruptions in Russian fuel. The push for expanding exports is expected to continue into next year, with average daily export volume expected to increase 10% above this year’s levels, the EIA said.

READ: Here’s how much PPL Electric Utilities’ bills are set to rise next month

What about heating oil?

Heating oil users’ total winter bill is expected to decline 8%, according to the Winter Fuels Outlook, which provides a number only for the Northeast as the fuel is little used outside of that section of the country.

The decrease is largely attributed to declines in the cost of crude oil, which is used to make heating oil, the EIA said.

Heating oil is the third most common source of household heating with 29,994 households, or 13.8%, using fuel oil or kerosene, according to 2024 U.S. Census Bureau American Community Survey numbers.

Winter heating cost predictions

This annual U.S. Energy Information Administration Winter Fuels Outlook issued in mid-October predicts winter heating costs across the country. Its base, or expected, case is the average spending it anticipates based on weather predictions. This year, the report indicates winter weather is forecast to be similar to last year. The report also presents a range based on temperature variations from the base. The numbers presented here are for the Northeast only.

Natural gas

“Base” or expected case: -1%, $868

10% colder: +6%, $931

10% warmer: -6%, $828

Electricity

“Base” or expected case: +3%, $1,519

10% colder: +8%, $1,589

10% warmer: 0%, $1,468

Heating oil

“Base” or expected case: -8%, $1,390

10% colder: +2%, $1,539

10% warmer:  -15%, $1,293