Home Heating Crisis Imminent – Winter 2008

Homes located in areas with very cold climate are never without a good heating system.   The system is a source of heat during the winter season to keep families warm and comfortable. As winter approaches, a home’s heating system will prove its worth once more amidst the reality of an energy crisis caused by the high oil prices around the world and a weak U.S. economy.

Homeowners, however, are experiencing a lot of anxiety this early worrying as to how they’re going to cope with the increasing prices of home heating oil. Compared to 2007, they will have to spend more this year in order to have their usual supply of fuel. This is in addition to the high heating bills they will have to deal with as a result of the increased electricity rates. Heating bills are expected to increase by an average of 20 percent making it probably the worst winter for low-income people.

Even with a decline in the price of crude oil, home heating oil prices normally go up during the winter months. And although prices of heating oil have actually fallen from their peak levels but they are still above the 2007 levels.

The ones to suffer most here are families with low income and the elderly. A survey of utility arrearages and shutoffs done by the National Energy Directors Association (NEADA) found that 15 million households including those occupied by the elderly are having difficulty paying arrearages from their heating bills last year. The figure is up by almost 10 percent compared to the same period last year. It also revealed that at least 1.2 million homes suffered disconnection from electric and natural gas service three months after getting shutoff notices.

The U.S. Department of Energy is expecting prices per gallon to go up by 25 percent resulting in an average cost for heating oil at more than $4 a gallon across the country. This translates to higher household expense of $720 this 2008 winter.

 On the other hand, the Energy Information Administration projects home electricity prices to hike up by three percent this year. People living in states undergoing market restructuring are seen to experience faster price hikes by as much as 50 percent due to the expiration of rate caps and as electric firms passing on to the consumers the high fuel costs.

With this looming energy crisis, more people are cutting on their expenditures. Another NEADA survey showed that 70 percent of low-income families have lowered their spending on food due to high gas and energy costs. Additionally, 31 percent have reduced their medicine purchases while 19 percent lessened their education expenses.

 It’s a good thing that some senators are exerting extra effort to help provide relief to the affected sectors. A new legislation known as the “Warm in Winter and Cool in Summer Act” has been introduced with a goal of providing $2.53 billion more emergency funding this winter for the Low Income Home Energy Assistance Program (LIHEAP). The program gives direct help to families with low income, senior citizens and the disabled who are having a hard time paying their heating bills.