Energy Prices in New England the Focus of National Winter Energy Outlook Conference

October 16, 2014

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, October 14, 2014, and found the current statewide average cash price for No. 2 heating oil was $3.27 per gallon, a decline of 5 cents since the end of September. This statewide average price now matches the lowest price recorded by the Energy Office since June of 2012. The average statewide price for kerosene, $3.83 per gallon, is also five cents a gallon less than it was a couple of weeks ago. The average statewide price for propane, however, increased a few cents, and now stands at $2.86 per gallon (for heating customers). A year ago, in late September, heating oil averaged $3.54 per gallon; kerosene, $3.95, and propane, $2.65.

Although heating oil costs have declined recently, higher prices over the last several years have motivated many Mainers to switch to alternative heating fuels, or supplement their oil system in order to reduce costs. According to the most recent data published by the US Census, Maine households are continuing to transition from heating oil – more are now using propane, wood, natural gas, and electricity. In 2013, 64% of Maine households used heating oil or kerosene as their primary heating fuel, which is down from a high of 80% less than a decade ago.

New England’s energy costs were the focus of the Energy Information Administration’s Winter Energy Outlook conference held last week in Washington, DC. Electricity and natural gas prices are projected to be much higher in New England than the rest of the country, due to constrained pipeline capacity. Demand for natural gas has increased for heating, commercial & industrial use, and especially for generating electricity, yet pipelines to transport it from the Marcellus region (where we have abundant supplies) have not kept up with demand. Electricity rates, in particular, will be higher this year because of limited access to natural gas. Until more pipeline capacity into New England is constructed, Maine residents and businesses alike are urged to seek out ways to use electricity and natural gas more efficiently. Efficiency Maine has financial incentive programs for both businesses and residents to install energy efficient measures.

However, there was some positive news regarding energy costs for Maine households. Heating oil prices, which have declined significantly in recent weeks, are projected to decline even further. Both increased domestic oil production (WTI crude) and weaker global demand for oil (Brent crude) have resulted in the lowest oil prices we’ve seen in quite a few years – on Monday, WTI crude futures sold for $84.84 a barrel, which is over $20 less than it cost a year ago. So, despite varying weather forecasts for the upcoming winter, Mainers are likely to pay less for heating oil than they did last year.

Using this week’s average heating oil price ($3.27), and converting to a common heating unit value (million Btu), the price of fuel oil is $23.72. This compares with an equivalent heating unit value for natural gas of $15.23 (at $1.52/therm); propane, $31.31 (at $2.86/gallon); kerosene $28.37 (at $3.83/gallon); wood pellets, $15.21(at $251/ton); cord wood, $11.36 (at $250/cord) and electricity, $46.89 (at 16 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 October 14, 2014


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.32

3.22

3.33

3.27

3.21

3.40

High

3.60

3.60

3.50

3.50

3.40

3.50

Low

2.88

2.88

3.10

2.90

2.88

3.30

Kerosene

3.83

3.86

3.83

3.81

3.80

3.80

Propane

2.86

2.89

2.80

2.81

3.00

2.71

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 ($3.60) was found in one region in the state, and the lowest heating oil price ($2.88) was recorded in two regions. 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.

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For Immediate Release

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