No matter how a home or business owner sees the upcoming cold fall and winter months, the chill will be felt in the bones and the wallet.
Prices from the major heating suppliers — oil, natural gas and electricity — are either rising or showing the potential to increase. In an already increasing demand from higher prices and price hikes, this must-having heating for the home or business is now taking its share of leftover cash.
“I have doubled my budget for the coming year as my expenses are lower than most, only I occupy my house,” said local resident Ed Guertin about his planning for the upcoming season. Some are getting hit twice as hard because they have both spiking oil heat and electricity costs.
Donna De Souza Huber said, “I always keep my thermostat at 68 and I’m expecting it to go up at least $200-300 more a month and I may have to get a second job! Oh and let’s not forget that my electric bill will be going up an extra $50 plus a month, too.”
And towns, like businesses with large floor space and employees to keep warm, also see budget trouble looming.
“Town’s current energy contract expires this December. Current prices are double what we are paying now,” Ralph Mollis, North Kingstown’s town manager recently warned town council members.
“We budgeted for a 25% increase, so current pricing is well above what we projected,” he said. “The state mandates that we purchase a portion of our electricity from renewable sources. This tends to be more expensive than traditional energy.”
Overall, local residents and business owners say they are getting ready to lose more money — just about the time they are saving cash as gas pump prices decline — because turning up the indoor thermostat is going to increase already elevated costs well above their levels last year.
Increases Are Here
In Rhode Island, about 54% of homes are heated by natural gas and 32% by heating oil and about 10% use electricity.
The state’s only natural gas supplier, Rhode Island Energy, recently requested from state regulators a rate hike that would produce on average about a 15% increase for the residential customer. Small businesses would see about the same.
In addition, heating oil prices — while topping out in late spring and early summer at about $6 a gallon — are coming down, but still double and triple what they were in previous years.
One customer in South Kingstown on a budget plan with a local oil company went from $70 in 2020 per month, to $164 in 2021 and to $248 in 2022 for a 980-square-foot seasonal home that is often used only during the winter one day a week and on weekends. The thermostat is kept to about 58 degrees.
According to the Energy Marketers Association of Rhode Island, budget plans in general are up on an average of 25% to 30% over last year.
Nearly all homes in the state use electricity. Rhode Island Energy sought in July from state officials an increase that has put most monthly electric on track to go up by about 50% this fall.
At 17.8 cents per kilowatt hour, the residential rate would be the highest on record going back at least 22 years. It’s more than double the rate currently in effect. It has also been reported that the commercial rate will be 18.3 cents per kilowatt hour.
The causes are several, but many officials cite the current war between Ukraine and Russia affecting that gas distribution in Europe and elsewhere to companies providing it for power generation in electric grids, such as the one serving New England.
As Europe seeks other sources than Russian natural gas, fossil fuel — used for home heating oil and at the pump gas for cars and trucks — is much more in demand and that is driving up costs.
Stephen Smith is owner of SmithCo Oil in Wakefield and provides home heating oil and service to customers throughout South County. He said he’s never seen price increases, as well as costs, this high in his nearly 40 years in the oil business.
“If we have a really cold winter, and with people using oil to heat their homes, or even electricity and natural gas, it could get very dicey. It could get scarce,” he said, noting that major suppliers are already making no promises of oil to small companies with one and two trucks.
He noted that his supplier recently sent him a letter seeking various financial data to examine the stability of his company before providing oil or even setting aside imports for him.
Energy conservation experts recommend the following for helping to keep costs down this winter:
Put thermostat at 55 or 58 for unattended homes
Consider whether time-activated thermostats may be useful for your house or business to raise and lower temperature at different times during the day.
Seal cracks and leaks in your doors and windows
Make sure your heating system is well serviced
Utilize ceiling fans to circulate warm air.
Check for local and state heating assistance based on income guidelines
Talk with your energy suppliers about monthly budget options to spread out the high costs over the year rather than having spikes during certain months.
That same budget examination and review Smith is doing is also happening with home and business owners, too, as Ed Guertin pointed out.
One parent said that heating and electric costs as increasing her budget by about 40% or $350 a month and she will defer home maintenance on an old home, stop eating in restaurants, drive less and not buy instruments and braces for a school-aged daughter.
In a North Kingstown social media post, L. Michelle Smith said, “We are upgrading the baseboard heaters, which are VERY old, with new and, hopefully more energy efficient, models. We will adjust the temps in each room based upon usage vs. keeping a consistent temp throughout the house.”
Shirley Jenison, added, she is “closing off rooms (that) don’t use and using heat only when necessary as I have a wood stove and 4 cords of wood.”
Another homeowner Rochelle Giunta Larghi in a Narragansett social media post said, “Our thermostat does not go higher than 65. Put socks on or extra layers.”