Home electricity and heating costs forecast to drop this winter

 

Expect lower electricity and heating costs in New York this winter, government energy experts say.

Electricity prices statewide should be about 20 percent lower this winter compared to last winter, the Public Service Commission says. In a news release October 23, the commission also forecast lower natural gas prices, though it didn’t say by how much. Con Edison says the price of natural gas for heating should be about 10 percent less than last year.

Lower prices are expected despite the fact that the natural gas industry appears to be a long way from solving the shortage of pipelines serving New York and New England. The pipeline shortage combined with frigid weather led to a shocking spike in electricity and natural gas prices across the state last year.

There’s plenty of gas available, notwithstanding New York’s reluctance to approve fracking in the western part of the state. Getting it to customers remains a problem, the US Energy Information Administration says. But the EIA’s forecasters do not believe the shortage will be as much of an issue this year. They do say, however, that supplies remain tight in New York, and are even tighter in the New England states.

Nationally, natural gas prices will drop about 5 percent from last winter, and electricity prices will drop 2 percent, the EIA forecasts. People who heat with oil can cheer too. Their costs should drop about 15 percent, thanks to the global collapse in oil prices.

Whether the Energy Information Administration estimates prove accurate depends on the weather. If temperatures are 10 percent colder than forecast, electricity prices will rise 2 percent, and natural gas prices will rise 6 percent. If temperatures are 10 percent warmer than forecast, electricity prices will drop 5 percent and gas prices will drop 12 percent.

Maybe you’re thinking about switching to an energy service company, or ESCO, to shave your electric or gas bill even further. Think carefully – there’s no evidence these companies have met their promise of lower gas and electricity prices. Also, keep in mind that ESCOs mark up their prices to make a profit. Con Edison and other utilities sell you gas or electricity at cost.

In its October 23 news release, the Public Service Commission suggests consumers worried about price spikes like the one last year could sign up for an ESCO’s flat-rate plan. The commission has successfully encouraged ESCOs to offer more such plans. “In Con Edison’s service territory … only five of the approximately 60 ESCOs offering electricity, offered fixed price products last year,” the release says. “Now, nearly 40 ESCOs in Con Edison’s service territory offer fixed-price electricity products.”

However, the plans may be a bad deal for you. If the state and federal forecasters are right that prices will drop this winter, why would you lock in a high price with one of these plans? Certainty costs money. You should approach these plans skeptically.

If you must go with an ESCO, start by visiting the state’s Ask PSC site. You can compare advertised prices on the state’s Power to Choose site. But I’m going to stay it again – be skeptical. The information on the Power to Choose site won’t tell you what you will really pay if you take an ESCO’s deal, and the state has still not figured out how to give consumers reliable information about ESCO pricing.

Keep in mind: Whether or not you go with an ESCO, you’ll still have to pay utilities like Con Edison to deliver your electricity or gas. There’s no escaping the power company.

Update, October 25: This post has been edited for clarity.

About Bill Sanderson

I'm a New York-based journalist, and a former reporter at the Concord Monitor in New Hampshire, the Bergen Record in New Jersey, and the New York Post. My work has appeared in The Wall Street Journal, MarketWatch.com and Politico New York. Twitter: @wpsanderson.
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