As Temperatures Plummet Again, Demand and Prices Increase

January 27, 2014

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, January 27, 2014, and found the current statewide average cash price for No. 2 heating oil was $3.87 per gallon, up seven cents from last week. The average statewide price for kerosene is also up seven cents, to $4.27 per gallon. This week’s average statewide price for propane (for heating customers) increased by 10 cents, to $3.35 per gallon. Heating fuel prices are higher this week than they were at any time last year.

In the beginning of October, the Energy Information Administration (EIA) released projections for the heating season. They predicted that temperatures would be 3% colder this year than they were last year, and this would contribute to higher heating fuel prices than last year. EIA’s projections for prices, nationwide, included the following: 13% higher for homes that heat primarily with natural gas, 9% higher for homes that heat primarily with propane, and 2% lower for homes that heat primarily with heating oil.

As we have discovered here in Maine, those projections were just that: an educated guess. The variance in actual prices versus projected begins with temperature. Since the heating season began in October, temperatures have been 9% colder rather than the 3% colder forecasted by the EIA. That is a trend that has been maintained throughout the winter as heating oil prices are up 4%, propane prices are up 23%, and kerosene prices have increased 3% from last year.

These price increases have not been specific to Maine, but nevertheless, this heating season has been a tough one on Maine families. Changes in propane transportation routes have affected prices in the Northeast and the Midwest, and heating oil prices have increased nationally, with stocks at a five year low for this week. The upside to this season is that January is nearly behind us, and crude oil prices have started to drop with increased uncertainty in the global economy. Propane stocks are currently the highest they have been all heating season in New England, and current temperature outlooks for the next month are higher that the temperatures experienced in January.

Using this week’s average heating oil price ($3.87) and converting to a common heating unit value (million Btu), the price of fuel oil is $27.90. This compares with an equivalent heating unit value for natural gas of $15.50 (at $1.55/therm); propane, $36.68 (at $3.35/gallon); kerosene $31.63 (at $4.27/gallon); wood pellets, $14.67 (at $242/ton); cord wood, $11.36 (at $250/cord) and electricity, $43.96 (at 15 cents per kwh). These fuel-only prices do not take into account the type of heating system, nor its efficiency. For example, the electricity cost is for traditional baseboard heat. Other electric heating technologies, such as heat pumps and electric thermal storage (ETS), may offer consumers energy savings. Cold climate heat pumps, a recent technological advancement, are much more efficient than baseboard electric heat, so total energy costs are lower than many other types of heating fuels. ETS offers savings by utilizing off-peak electric rates, available in many areas of the state.

The Energy Office has a calculator on its web site that allows consumers to obtain more detailed estimates of home heating costs, and the price impacts of various types of fuel, heating systems and heating appliances. Heating costs vary considerably from home to home. The home heating calculator can assist homeowners in finding the best heating option for their home, location, lifestyle, and budget http://www.maine.gov/energy/index.html

As of January 27, 2014


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.87

3.86

3.86

3.89

3.86

3.94

High

4.15

4.06

4.15

4.04

4.00

4.00

Low

3.63

3.63

3.70

3.70

3.75

3.85

Kerosene

4.27

4.25

4.27

4.28

4.25

4.33

Propane

3.35

3.40

3.43

3.27

3.15

3.56

It is important to note that the price for heating oil is a statewide average, and that prices in a given geographic region of the state may be considerably higher or lower than this average. This week, within the Energy Office sample, the highest heating oil price ($4.15) was found in one region in the state, and the lowest heating oil price ($3.63) was also recorded in one region. Also, the statewide average price for propane is based on a use of at least 900 gallons a year. Households using propane just for cooking or hot water generally pay a higher per gallon price. The table above provides current Maine cash prices in dollars rounded to the nearest penny.

Efficiency Maine Trust links Maine homeowners and businesses with qualified, certified contractors who provide access to energy improvement options. For program details call 866-376-2463 or visit www.efficiencymaine.com

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For Immediate Release

Contact:
Lisa Smith
(207) 624-7445
lisa.j.smith@maine.gov