The company's executive vice president and chief financial officer, Philip J Lembo, said in a third-quarter 2021 earnings call that the rise in prices following the pandemic, combined with supply issues and the forecasts of a cold winter, are behind the expected rise.
Lembo said that although he understands it is a noticeable increase, alternative heating sources are seeing even greater price hikes. He stated: “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.”
He said that the bitterly cold temperatures that are expected in December and January could lead to a rise in the cost of natural gas, which could put customers in a difficult position. He said that Eversource has already suggested to regulators that they spread out the “recovery of certain charges in our distribution portion of our bill to moderate the potential bill impacts where possible.”
He added that they were working with regulators to help customers understand the price situation and the factors that impact natural gas bills and take actions to address it. For example, he said the company is urging customers to take advantage of energy efficiency programs and various payment options being offered.
Eversource is not the only company that is anticipating a price hike; Avangrid has also been advising the customers of its natural gas companies, Southern Connecticut Gas and Connecticut Natural Gas, that supply prices of natural gas energy are expected to rise and has offered to help customers manage their natural gas costs and usage.
Natural gas prices are climbing around the world as the global supply chain crisis continues and demand surges. It is a stark contrast from 2020, when the cost natural gas hit historic lows. The prices of natural gas had been declining with a rising supply before the pandemic got underway. Prices then dropped even more steeply during the pandemic but are now rising as the economy recovers and global demand rises.
The Biden administration has said that it is “concerned” about the high gas prices. White House Press Secretary Jen Psaki said that they have asked the Federal Trade Commission to investigate.
She 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. We’ve asked the FTC to look into that.”
The U.S. Energy Information Administration is forecasting that average household spending on all major home heating fuels will rise significantly this winter due to higher energy use and fuel costs. The average increases will vary by region, type of fuel and weather forecasts. Compared to last winter, they expect heating oil spending to climb by 43 percent, electricity to increase by 6 percent, propane to rise by 54 percent, and natural gas to increase by 30 percent.
Some people are already relying on smart thermostats to help control energy prices, while others plan to bundle up indoors this winter. The U.S. Energy Department has suggested that people replace the filters on their furnaces to save money on heating bills.
Sources for this article include: