If you heat your home with natural gas, then you’ve likely heard from your utility company that costs will be increasing for the winter of 22/23. Nearly half of all households in the U.S. heat primarily with gas, and people are expected to be paying roughly 30% more on gas for this winter than the previous one. There are many reasons why this may be.
Natural gas prices have been increasing, which will drive up the amount you pay per gallon. In addition, while some areas of the country will be seeing a more mild winter this year, other parts of the north will be seeing temperatures that are below average, which will increase heating bills for people in that part of the country simply from additional use. For some people, there may be other reasons as to why their gas bill is so high which they might not have even realized. This could be due to the state of their HVAC system.
While you may not be able to do anything about some of these factors, understanding why your bill is increasing can help you make different decisions for your home this winter to help offset these rising costs. In this article we take a closer look at the cost increases in natural gas, and share 7 potential reasons as to why your gas bill is higher this winter season.
U.S. Homeowners Will Pay Nearly 30% More in Gas Bills This Winter
According to data obtained from the EIA, households that use natural gas will see a big increase in costs this winter in comparison to the last seven years. From last winter to this one, gas prices will be rising an average of 23%, with some areas seeing even higher increases. This will make the average cost of natural gas for the winter $931 per household, or roughly $155 a month. For households in the Northeast, where natural gas is very prevalent, costs are expected to rise to an average of $1,094 for the winter, or $182 a month. In the Midwest, which also has a high percentage of households heating with gas, costs will be increasing even more, to around 33% higher than last year, with most households expected to spend an average of $169 a month this winter on gas.
The exact amount that you’ll pay for natural gas depends on both the higher retail price of natural gas, as well as your personal consumption. Natural gas is expected to average around $16 per thousand cubic feet (mcf), which is a 22% increase in costs from last winter. The exact price that you will pay can vary by region, as the further the gas has to go to reach your neighborhood, the higher its price. In addition, the EIA is predicting that households will also be consuming roughly 5% more natural gas this winter due to predicted colder temperatures in parts of the country.
7 Reasons Why Your Gas Bill Is Higher This Winter
The exact amount of your gas bill this year will be determined by both the cost of natural gas in your area, and the amount that you consume. Both of these aspects will be influenced and impacted by different factors, resulting in 7 potential reasons why you may see a higher gas bill this winter.
1. Supply of gas has decreased
The global supply of natural gas has decreased, and a smaller supply of this commodity has pushed prices up for what remains. The biggest decrease in current supply is linked to the war in Ukraine. Europe had previously been relying on Russia for natural gas, and now has turned to other markets, which has in turn caused prices to rise worldwide. As a big part of the available natural gas is being exported to Europe, record gas exports have been recorded. Natural gas inventories in the U.S. have also dropped in general, possibly causing a further hike in prices.
2. Demand for gas has increased
While the amount of available natural gas has decreased, the demand for it will be high, driven in part by the predicted higher heating demands that a cold winter will bring. However, at the same time, the previous practice of switching from natural gas to coal to produce electricity in the U.S. when natural gas prices spike is becoming less available as well. Coal-fired plants are being retired as many people push for cleaner burning gas to be used in its place, and maintaining the aging plants becomes more cumbersome. Coal was also burned through at a high rate during the pandemic, leaving a shortage that makes it more difficult for electric companies to get the amount that they need. Natural gas has therefore been filling the void left by coal, with a predicted increase in renewable energies not being ready at this time.
3. Inflation
Inflation is currently causing costs of goods and services to rise across the country, and this includes the cost of natural gas. According to the EIA, it’s being predicted that inflation will make up 6% to 7% of the current cost increases. If inflation continues to increase, this will in turn lead to a further increase in the costs of natural gas over the same period. While this makes up less of the total increase than other factors, inflation's impact on the economy as a whole may mean that some households don’t have additional funds to offset the rising cost of gas by improving energy efficiency in their homes.
4. You are facing a colder winter
Depending on the part of the country you’re in, you may be facing a colder winter this year than previous. In turn, in order to stay warm, you’ll be consuming more natural gas as the winter goes on. Many people that use natural gas for heat also use it for heating water, cooking, and to dry their clothes - all things that can also increase during the winter as the demand for these things goes up. The EIA is predicting slightly colder temperatures than the average of the last 10 winters, which may mean that you will be increasing the number of days you’ll be heating your home this year, by approximately 6%.
5. Your heating appliances are not installed or maintained properly
In addition to the previous factors outside of your control, there may be other things going on that could be increasing your bill as well that you can take action on. For example, your HVAC system not being correctly installed or maintained.
There are approximately 58 million homes in the U.S. that use natural gas for heat and heating is the biggest source of energy consuption in U.S. homes. This accounts for more than 40% of all households. If your HVAC system is not sized properly for that space, if it’s been installed incorrectly, it’s older, or if it’s not being maintained properly, these factors could increase your gas consumption. Systems that are too large or too small for the space will work harder than they have to in order to keep your home warm, which means they’ll use more gas than a properly sized system would. Filters that aren’t being changed properly, dirty and poorly maintained ducts, and other system areas can all cause your system to lose efficiency as well. This loss in efficiency will translate into additional gas consumption. Very old systems may not be as efficient as newer systems, so an older system that has not been well maintained could be driving your bills higher as time goes on. In addition, if you are setting your thermostat or boiler temperatures too high, this will also lead to more gas consumption and an unnecessarily higher bill.
If your system is older, consider having a professional come out and assess it. A tune up costs $125, and can help keep your system running at peak efficiency. They can also let you know if it’s sized properly, or if it’s time to upgrade. You should also keep in mind that Energy.gov recommends setting your thermostat to 68F when you’re home and awake, and lowering it when you sleep or are away from the home to help save energy as well.
6. Your house is not well insulated
Even if your system is operating at peak efficiency, it could still be working too hard if your home is losing the energy it produces. Many homes may be underinsulated, allowing thermal transfer to happen through the walls and roof. Other homes may have air gaps or spaces where heat could be leaving your home at doors, windows, and areas like outlets. If you lose too much heat, your system will have to work harder to keep your home at a comfortable temperature. If you are unsure of where your home could be losing heat from, an energy audit can help you find those areas, so you can help prevent further thermal transfer from occurring. The average energy audit costs $145 to $420, and if your home does need additional insulation, this has an average cost of $4,500.
7. You only rely on gas as a fuel source
If you don’t have a secondary heat source in your home, then relying only on natural gas to provide your heat could also cause higher heating bills in general. There are many secondary and supplementary heating systems that can help you lower your bills. These can include adding a heat pump - either air or geothermal depending on where you live - adding a pellet or wood stove, or investing in things like solar panels that will let you switch from gas to electricity to heat your home with clean energy. Solar panels can also help you save on your electric bills as well, and with many electric plants in the U.S. also relying on natural gas, switching to solar can help you save on those increasing costs too.
Solar panels have an average cost to install of around $18,000. According to SolarReviews, the average household can save nearly $1,500 a year in electric bills once the panels are installed.
What Else Can You Do to Combat Gas Expenditures?
Gas bills will be higher than average this winter due to both the higher retail price of natural gas and the higher projected consumption by homeowners. With the cost of both gas and electricity in the U.S., combined with the current rate of inflation, this can put a significant burden on many households to stay warm and safe this year. Many utility companies do have programs available to help low-income households make energy efficient improvements to help manage these bills. However, many programs are underutilized, with only 13% of money spent going to low-income households.
Stay informed this year, and make sure you take advantage of the solutions available, whether through your utility company or through upgrades to your home and system. The cost of gas may be rising, but staying warm this winter is still a priority for all households.
About the Author:
Hannah is a home improvement specialist at Fixr.com. She researches current topics regarding homes and the industry in general in order to give the most effective advice to homeowners. With a Bachelor’s degree in Business, she analyses industry data and provides visual representations that help homeowners stay informed and make the best decisions for their homes.