How to Save on Rising Gas And Electric Bills This Winter

How to Save on Rising Gas And Electric Bills This Winter
How to Save on Rising Gas And Electric Bills This Winter

Find out how much you can expect your bill to go up this winter and hear from experts on how you can keep it as low as possible.

Winter’s right around the corner, and energy bills are expected to increase more than usual for U.S. households. But why are they going up, and how much can you expect to pay? Further, how can you keep your bill as low as possible?

Here’s what you need to know.

How Much Are Energy Bills Expected to Increase This Winter?

The U.S. Energy Information Administration estimates that, from October to March, each U.S household will pay an average of $931 for natural gas – up 28% from 2021. That breaks down to about $155 per month, per household. As for electricity, the estimated average cost per household is $1,359, or $226.50 per month – a 10% increase year over year.

While the average costs are on a national level, they aren’t evenly dispersed throughout the U.S. Some areas are predicted to incur higher costs and some lower. Additionally, if the winter is colder than the National Oceanic and Atmospheric Administration predicts, price volatility and spikes are possible.

Why Are Energy Bills Going to Be So High This Year?

In the first half of 2022, the U.S. became the largest liquefied natural gas exporter in the world, with 64% of exports going to the EU and the UK. When comparing the last six months of 2021 to the first six months of 2022, U.S. LNG exports increased by 12%. The main underlying driver of demand was the EU’s commitment to reduce gas imports from Russia, its largest supplier, in response to Russia’s invasion of Ukraine.

According to EIA, natural gas inventories are expected to be 6% less than the previous five-year average heading into the 2022-23 winter. As a result, wholesale commodity natural gas prices are expected to be higher, leading to higher prices for both natural gas and electricity in the retail market.

About half of all U.S. households heat their homes primarily with natural gas, while about 40% rely primarily on electric resistance heaters or heat pumps. However, natural gas is responsible for 36% of U.S. electricity generation, so the increases in natural gas prices will affect electricity costs as well.

With energy costs expected to increase as the temperatures drop, what can you do to prepare?

Greg Dunavant, vice president of customer operations for Gas South, says, “One of the easiest ways to lower your energy costs in the winter is to run your heat at a lower temperature. You can save about 3% on heating costs for every degree you lower your heat. Most agree that 68 degrees is the sweet spot.”

Along with lowering your thermostat, another easy step is adjusting your fans.

“If you have ceiling fans, run them on the low setting in the winter with the blades spinning clockwise – you can change the spin direction on most models with a switch on the bottom of the fan motor,” Dunavant says. “The fan blades will pull cool air up and redistribute the warm air that collects on your ceiling back down into your room along the edges of the walls.”

“There are lots of brands out on the market, but the Nest Learning Thermostat is one of the best. It learns the temperatures you like, then programs itself based on your preferences and schedule to save you up to 12% on your heating expenses,” said Dunavant.

Simon Bernath, the chief executive officer and founder of Furnace Prices, says “To keep the costs down during the winter, I recommend testing the efficiency of your HVAC/furnace equipment. Older models won’t use energy as efficiently, particularly due to wear and tear and the buildup of dirt and dust. You’ll want to get them serviced before the winter settles in.”

If your appliances are old and worn out, consider upgrading them – and taking advantage of new energy efficiency tax credits created by the Inflation Reduction Act.

“Many energy companies offer energy audits and can help you determine the best ways to save on energy in your home,” says Samantha Hawrylack, a personal finance expert and the owner of How to FIRE. “You can also look into alternative energy sources such as solar power to help offset the cost of gas and electricity.”

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