Lower Heating Costs Continue for Maine Households

January 7, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, January 5, 2015, and found the current statewide average cash price for No. 2 heating oil was $2.71 per gallon, another four cents lower than last week. The average statewide price for kerosene, $3.31 per gallon, was also four cents lower. Propane prices remained the same, at $2.74 per gallon (for heating customers). A year ago at this time, heating oil averaged $3.81 per gallon; kerosene, $4.20, and propane, $3.17. Retail heating oil prices, statewide, are almost 30% lower than a year ago.

World crude oil prices have continued their downward spiral, dipping below $50 (WTI) and $52 (Brent) a barrel, http://www.bloomberg.com/news/2015-01-06/crude-holds-slump-to-50-as-global-supply-glut-seen-persisting.html the lowest prices in 5 ½ years. Energy analysts are now speculating on where the ‘bottom’ is, i.e., how low prices will go. Despite a supply glut and weak worldwide demand, Russia is producing at record output; OPEC has exceeded its production target for the seventh straight month; Iraq plans to increase production by 300,000 barrels a day; and production in the U.S. is expected to climb over the next several months http://www.bloomberg.com/news/2015-01-05/brent-oil-falls-below-55-a-barrel-for-first-time-in-5-1-2-years.html . All this additional production will put additional downward pressure on prices. These low prices, coupled with warmer temperatures over the first few months of the heating season, translate into very good news for Maine households. Heating degree days (hdd), an indicator of heating demand, were 11-17% lower in October, November, and December than last year (see table below).

Using this week’s average heating oil price ($2.71), and converting to a common heating unit value (million Btu), the price of fuel oil is $19.54 This compares with an equivalent heating unit value for natural gas of $19.50 (at $1.95/therm); propane, $30.00 (at $2.74/gallon); kerosene $24.52 (at $3.31/gallon); wood pellets, $15.33 (at $253/ton); cord wood, $12.95 (at $285/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 January 5, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.71

2.62

2.82

2.67

2.66

2.88

High

3.19

3.19

3.00

3.00

3.00

2.95

Low

2.25

2.25

2.60

2.30

2.25

2.80

Kerosene

3.31

3.37

3.36

3.21

3.28

3.30

Propane

2.74

2.77

2.78

2.63

2.77

2.73

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 ($3.19) was found in one region in the state, and the lowest heating oil price ($2.30) 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.

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For Immediate Release

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