Cost of staying warm soars, as fuel demand hits a peak
By Christine Gillette cgillette@seacoastonline.com
PORTSMOUTH - Prolonged cold weather and uncertainty in oil-producing nations are pushing up heating costs for consumers this winter.
"Demand is up considerably," said Joe Broyles, an energy program manager for the Governor’s Office on Energy and Community Service.
Driving demand for oil and other energy sources for heating is the number of days on which homes and businesses are likely to need to turn the heat on, up 23 percent this winter from last year, Broyles said.
"That, I think, caught a lot of people by surprise, so suppliers may not have contracted for as much oil as they need, and the same for consumers," he said. "That’s driven the price up a lot on the wholesale market and (suppliers) don’t have a lot of choice but to pass that on to consumers."
While demand is up, supply is down for some energy sources like oil because of a large-scale strike in the oil industry in Venezuela and worries about war with Iraq, Broyles said.
At Buxton Oil in Epping, oil prices per gallon have gone from $1 to $1.10 last winter to $1.69, said owner Donna Buxton.
"It’s been a very long, very cold winter. People’s consumption is up this year, and with an impending war with Iraq and the Venezuela situation, it’s challenging and it’s made prices go up," she said.
Buxton allowed customers to lock in oil last summer at 99 cents to $1.19 a gallon. But because of cold temperatures, many customers have exceeded the amount of oil they locked in at the lower amount, and that’s forced Buxton Oil to buy more on the open market now at the higher price.
When that runs out, or for customers who didn’t lock in, there’s often frustration with having to pay the market rate, said Buxton.
Buxton Oil works with fuel assistance providers, such as Rockingham County Community Action, which distributes funds to eligible families.
"We’re definitely seeing more demand," said Steve Geller, executive director of the agency. "Things normally start slowing down, or would have started slowing down by this time in the winter, but with the cold weather, that’s not happening."
Already this winter, fuel assistance has been provided to more than 2,600 Rockingham County households - up 200 from last year - with nearly 70 scheduled to come in to apply in the next two weeks, even as the calendar nears the official start of spring.
"A combination of the colder weather requiring more people to use more oil and demand raising prices is really wiping people’s budgets out," Geller said.
Even people who are getting fuel assistance - anywhere from $150 to $1,000 for the winter, depending on income - are using their allowance quickly.
Geller said had President Bush not agreed in January to release additional federal funds for fuel assistance, Rockingham County would have run out by the end of that month.
Applications for fuel assistance are up this year, despite a lowering of the eligibility standards from 225 percent of the federal poverty level to 175 percent.
Reducing the eligibility, Geller said, has meant turning away 411 applicants since the start of 2003, including senior citizens on fixed incomes and working poor families, the largest growing segment of the agency’s clients.
Geller said even with the increase in federal funds, all but about $40,000 of the total $1.64 million allotted for the season is already committed to current clients, and with people still seeking help, could be exhausted.
Prices for sources of heat besides oil, like natural gas, are also higher than last year, but less dramatically because supply is plentiful, according to a local provider.
Rates for this winter are up 7.6 percent from last winter, and were approved last year by the Public Utilities Commission, said Don DiNunno, manager of communications for Northern Utilities, a supplier of natural gas on the Seacoast.
On average, he said, the typical residential customer uses 932 therms of natural gas to heat their house from November to April. Last year, that cost $975, and this year, $1,049 for a difference of $74.
DiNunno said he expected natural gas usage is up this year because of the cold weather, but could not say how much.
"You can assume people are consuming 20 percent or more natural gas," Broyles said, based on this winter’s weather.
About 14 percent of New Hampshire homes heat with natural gas, according to the energy office, compared with 53 percent with oil, 5 percent with electricity and .3 percent with coal. Ten percent of households use wood to supply some of their heat.
Propane, the energy source for about 10 percent of New Hampshire’s heating customers, is not regulated by PUC, so its prices can have bigger fluctuations than natural gas, according to Broyles.
Right now, propane costs about 7 cents more per therm, or 88 cents total, than last year, he said. Electricity is about 12 cents a kilowatt hour, compared with an average of 9.21 last winter.
The best way to cut heating costs, Broyles said, is to cut energy consumption.
"Ultimately, the least expensive energy is the energy you don’t consume," he said, adding that it’s a myth that leaving heat turned up all day, even when you’re not home, is cheaper than turning the heat up later. "It’s cheaper not to spend the energy in the first place."