Winter heating costs rising, PUC advises customers to shop for rates

Western Pennsylvanians could be in for sticker shock this winter when they pay their heating bill, state and federal agencies warn.

“There is a big swing in electric prices (this winter). The surge in natural gas usage is driving up wholesale natural gas prices” at a time when more natural gas is being used to generate electricity, said Nils Hagen-Frederiksen, a state Public Utilities Commission spokesman.

The home heating season will be significantly more expensive this winter, with consumption likely to increase because of colder weather combined with a rise in natural gas prices, according to the Energy Association of Pennsylvania, which represents the state’s natural gas and electric power providers.

Home heating costs for Pennsylvania households that use natural gas as their primary source of heating are expected to increase about $170 to an average of $746 — a 30% hike, according to the U.S. Energy Information Administration’s winter forecast.

Slightly more than half of Pennsylvania’s 4.5 million households rely on natural gas as their primary heating source. Nationwide, about 40% of electrical power is generated by burning natural gas, the EIA said. Natural gas usage is more than double that of coal to generate electricity, the EIA said.

“Suddenly, everyone’s buying natural gas,” Hagen-Frederiksen said.

Despite the demand, the Energy Association of Pennsylvania said the state’s gas companies have a sufficient amount to meet natural gas needs through the pipeline system and stored underground.

Unlike last year, when natural gas prices dropped because of the pandemic-restricted economy, “we’re seeing the other side of the coin,” Hagen-Frederiksen said.

Columbia Gas of Pennsylvania is seeking PUC approval to raise rates for residential customers by about $15, bringing the average monthly heating bill from about $100.80 up to $115.37 per month.

Despite the rate hike, Columbia Gas officials said the average residential customer still would pay almost 20% less than 20 years ago, when adjusted for inflation.

Peoples Natural Gas was approved for a 16% increase to recover the additional cost of gas it has purchased, effective Oct. 1. The PUC board approved the rate hike in late August, which pushed the gas purchase recovery cost by $1.25 per mcf (thousand cubic feet), from $7.81 mcf to $9.06, for customers using an annual average of 87 mcf.

Peoples also is seeking PUC approval to raise rates by about 13% for residential customers using about 87 mcf per year, which would increase bills from $71.14 a month to $80.31.

For those relying on electric-generated heat, Duquesne Light Co. of Pittsburgh and West Penn Power Co. of Greensburg are raising the price they charge customers as of Dec. 1.The utilities no longer own the plants that produce electricity.

Duquesne Light, which serves about 600,000 customers in Allegheny and Beaver counties, is increasing its generation rates from 7.4 cents to 7.9 cents per kilowatt hour, a 7.7% increase. West Penn Power, which serves about 725,000 customers in Southwestern and Central Pennsylvania, will raise its generation rates from 5.4 cents to 5.6 cents per kWh, a 4.6% jump, according to the PUC.

That price to compare, or PTC, averages 40% to 60% of the customer’s total utility bill, depending on usage and the particular utility, the state said. PTC is the price per kilowatt hour (kWh) an electric distribution company charges.

Duquesne Light is seeking PUC approval to raise distribution rates beginning in January by about $4.23 per month, or about 4.23% per month, on residential customers using 600 kWh per month. The utility expects the PUC to make a decision in mid-December.

The PUC urges utility customers to shop around and compare prices for electric generation and evaluate competitive suppliers as a way to save money. Unlike local utilities that deliver electricity to homes and businesses, the state does not regulate power generation companies. To help consumers compare prices, the PUC created the website PAPowerSwitch.com, which has details on competitive offers, along with tips for energy conservation and savings.

Those who use heating oil as their primary source for home heating were paying $3.26 per gallon as of mid-November. That was a whopping increase of $1.25 per gallon, or 62%, more than a year ago but only about 40 cents more per gallon than in 2019, according to the EIA.