EIA Expects Heating at Comparatively Lower Costs This Winter

October 8, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, October 5, 2015, and found the current statewide average cash price for No. 2 heating oil was $2.01 per gallon, up two cents over the last two weeks. Average kerosene and propane prices were similar; the average statewide kerosene price this week was $2.58 per gallon (two cents higher), and the average statewide propane price for heating customers was $2.15, up just a cent in the last two weeks. Lower fuel prices all around dominated the discussion at the Energy Information Administration’s (EIA) annual Winter Fuels Outlook Conference, held yesterday in Washington, DC. The chart below gives a national forecast of heating fuel expenditures for the upcoming heating season, October through March.

The EIA projects lower costs even if the heating season is colder than average. Nationwide, current inventories are high for heating oil (highest since 2011), propane (45% above the five-year average), and natural gas (15% above levels a year ago) going into the heating season, and prices for all three fuels are the lowest seen in years. Inventories of these fuels across global markets tell the same story. High refinery runs, coupled with a slowdown in manufacturing growth have left global demand flat and inventories high. High inventories coupled with flat demand indicate that prices should remain lower through the heating season, which is great news for Maine consumers.

Using this week’s average heating oil price ($2.01), and converting to a common heating unit value (million Btu), the price of fuel oil is $14.49. This compares with an equivalent heating unit value for natural gas of $11.60 (at $1.16/therm); propane, $23.54 (at $2.15/gallon); kerosene $19.11 (at $2.58/gallon); wood pellets, $15.39 (at $254/ton); cord wood, $11.36 (at $250/cord) and electricity (electric baseboard), $38.10 to $55.69 (at 13-19 cents per kwh).

However, fuel-only prices are only part of the calculation when determining which fuel will save you more this heating season. The type of heating system, as well as its efficiency, needs to be considered. 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 . Efficiency Maine also has a calculator on its website that can help consumers evaluate their heating options http://www.efficiencymaine.com/at-home/home-energy-savings-program/heating-cost-comparison/

As of October 5, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.01

1.97

2.07

2.03

1.91

2.16

High

2.46

2.30

2.20

2.46

2.28

2.20

Low

1.70

1.70

1.90

1.75

1.70

2.10

Kerosene

2.58

2.72

2.53

2.50

2.51

2.56

Propane

2.15

2.21

2.04

2.13

2.13

2.27

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 ($2.46) was found in one region in the state, and the lowest heating oil price ($1.70 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