The Energy Information Administration (EIA) in its Short-Term Energy and Winter Fuels Outlook (STEWFO) for the 2010-2011 winter heating season projects that American consumers should expect to see heating expenditures rise by 2.5% on average compared to last winter. Average expenditures for those heating with natural gas are projected to see an increase of 3.6%, while those heating with electricity are projected to see a decline in expenditures of 1.9%. These two fuels account for the heating for approximately 88% of all U.S. households. Propane and home heating oil consumers are projected to see cost increases of 7.5% and 11.5%, respectively.
Within the U.S. average projections, differences exist with respect to region of the country and type of fuel.
Economic conditions of slow growth and high unemployment suggest that lower consumption of all fuels is likely, especially in the context of milder winter weather conditions that have been forecast by the National Oceanic and Atmospheric Administration (NOAA). The price of oil has been increasing in the months leading up to the 2010-2011 winter heating season. If the price of oil continues to increase beyond the projected level of $85 per barrel, heating costs might be expected to rise above projected levels for all consumers.
Uncertainty exists with respect to the status of funding for the Low Income Energy Assistance Program (LIHEAP), the key federal program assisting low-income households with heating expenditures. Funding levels for the program have not been determined because Congress has not passed the FY2011 appropriations for the Departments of Labor, Health and Human Services, and Education (S. 3686). A continuing resolution is currently funding the program at the FY2010 level (H.R. 3081, P.L. 111-242).
It has not been announced whether the CITGO/PDVSA program that assists some U.S. heating oil consumers will be continued.
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