Eversource Energy on Wednesday warned that customers could see natural gas heating prices rise 15 percent, costing an average of $30 a month more compared with last year.
In the company’s third-quarter 2021 earnings call on Wednesday, Philip J. Lembo, executive vice president and chief financial officer, cited rising prices post the COVID-19 pandemic, forecasts of a cold winter, and supply issues as reasons for the price increase.
Eversource serves 4.3 million electricity and natural gas customers in Connecticut, Massachusetts and New Hampshire, where it also has headquarters.
“Overall, including the distribution charge, we expect natural gas heating bills will be up about 15 percent on average. That’s about $30 a month to the average for a typical heating customer compared to last winter. And that’s an average across our three natural gas distribution companies,” Lembo said.
“While a 15 percent increase is significant it is far less than the more than 30 percent increase that propane heating customers are facing and really a 60 percent increase that’s out there for home heating oil as the alternatives for customers,” Lembo added.
Lembo said the impact of high natural gas prices would be even more evident in electric bills.
Residential customers typically see an increase to their supply charge of 1.5 to 2 cents per kilowatt hour [$10.50 to $14 a month for the average customer, or about 15 percent] in January, Lembo noted, which usually goes back down as we move into the summer.
“This January customers in Massachusetts and Connecticut elected to experience an additional $0.02 to $0.03 increase due to higher gas prices driving power production. This would be an additional $20, $25 per month for a typical residential customer compared with last winter,” Lembo said.
The executive vice president noted that “a bitterly cold month of December or January could cause natural gas cost to increase,” and that this could place customers in a stressful situation, adding that Eversource has suggested to its regulators that it spreads out the “recovery of certain charges in our distribution portion of our bill to moderate the potential bill impacts where possible.”
Lembo added that Eversource is working closely with regulators so that “customers understand the current price environment” as well as the “macro factors affecting natural gas bills” and “take actions to address it,” adding that it is urging its customers to take advantage of its energy efficiency programs and leverage payment options.
The warning comes as the cost of natural gas prices are soaring worldwide amid a global supply chain crisis and surging demand, despite reaching historically low prices in 2020.
In the United States, the U.S. Energy Information Administration has forecast that average household spending for all major home heating fuels will increase significantly this winter primarily because of higher expected fuel costs and increased energy use in what’s expected to be a colder winter.
Average increases vary by fuel, region, and weather assumptions, the agency said. Compared with last winter, the agency forecasts that propane spending will rise by 54 percent, heating oil by 43 percent, natural gas by 30 percent, and electricity by 6 percent.”
Press secretary Jen Psaki told reports at a press briefing in October that President Joe Biden is “mindful” of the increased prices consumers are facing when it comes to their energy bills and that he “reserves a range of options,” to combat the situation.
The administration is “concerned” over the high gas prices and has asked the Federal Trade Commission (FTC) to investigate the matter, Psaki said.
“I will also note that as it relates to gas prices, we remain concerned about trends we have seen where even as supply has increased at times over the last several months, we’ve still seen heightened prices,” Psaki said. “We’ve asked the FTC to look into that.”