Home Heating Costs on the Rise

A colder and wetter winter forecast from NOAA’s Climate Prediction Center for northeastern Wisconsin, coupled with higher energy prices compared to last winter, are expected to result in increased costs to heat homes this season.

“Natural-gas prices have spiked across the world,” said Matt Cullen, senior communications specialist with WEC Energy Group, the parent company of Wisconsin Public Service (WPS) and We Energies.

“They are at some of the highest levels we’ve seen in a decade.”

A typical residential natural-gas customer can expect to pay between $20 and $30 more per month this heating season compared to last year, Cullen said, in all those places where natural gas is available. In Door County, that includes Sturgeon Bay residents in both the city and town, some Southern Door communities (Forestville, Brussels, Maplewood and Union), and the western portion of Sevastopol. 

In all, 5,188 Door County households heat with natural gas, according to the Wisconsin Public Service Commission’s (PSC) Office of Energy Innovation. Another 5,177 Door County households heat with propane; 1,604 with electricity; and 544 with heating oil.

Though fuel oil is a minority home-heating source for Door County residents, those households are seeing the highest price increases. As of March 2022, residential heating oil had increased 63.08% over the 2021 winter season – October through March – and propane had increased 33.09%, according to the Wisconsin Residential Winter Heating Fuel Prices Summary compiled by the PSC.

Since March, fuel-oil prices have climbed another 52.3% to $4.57 per gallon, while propane has fallen to $2.07 this October from its March 2022 price of $2.35.

The official price per unit of natural gas and electricity in Wisconsin is not yet available for the start of this winter season, but as of March, natural gas had risen to $9.91 per British thermal unit, an increase of 42.16%; and electricity was at $0.1548 per kilowatt hour in March, a 4.95% increase over the previous season. 

Why Are Heating Costs So Expensive This Season?

Many factors spike the cost of petroleum products, which include the crude oil that’s refined into the products used to heat homes. Those include post-COVID-19 supply-chain interruptions, as well as singular events such as the September explosion and fire at the BP refinery in Toledo, Ohio, that killed two workers. The plant processed 160,000 barrels of oil per day and is expected to be shut down for months.

Oil is also a globally traded commodity, which affects prices at home.

“Heating bills in Door County this winter [and everywhere] are very tightly connected to speculation on oil futures,” Gregory Nemet said by phone. He’s an energy-policy expert and professor at the University of Wisconsin-Madison’s La Follette School of Public Affairs.

But the biggest impact on higher home-heating prices is the war in Ukraine, Nemet said.

“Russian gas is not being sold anymore, or oil, so everybody is scrambling to get gas and oil,” he said.

The United States has more than enough oil in the country – during the past two years, the U.S. has exported more than it has imported, according to the U.S. Energy Information Administration – but those resources belong to oil and gas companies.

“Just because the oil comes from the U.S. doesn’t mean we have any special access to it,” Nemet said. “It’s all just a global, interconnected market.”

And during the war-created shortage, it’s more profitable for oil and gas companies to export American oil to other countries.

“That’s the number-one explanation” for the higher prices, Nemet said. “That’s really it.”

He anticipated that prices would continue to be volatile, with boom-and-bust cycles, and said it was a good time for people to be thinking about whether they want to continue to combust fossil fuels inside their homes for cooking and heating. That method, Nemet argued, only locks people and their economies into a dependance that exacts high costs in dollars, human health and climate health.

“The real answer is getting fossil fuels out of our energy systems,” Nemet said. “I’d be thinking very seriously about alternatives to propane.”

Electrifying Heat

If it’s hard to see alternatives for rural places such as Door County that rely heavily upon propane to heat their homes, the Inflation Reduction Act (IRA), passed by Congress in August, may have some answers.

The IRA invests $369 billion in energy-security and climate-change programs over the next 10 years and funds the development of a variety of renewable-energy sources, including solar, wind and hydro. Energy made by these means produces no carbon emissions, so it’s considered “clean.”

Electrification is also considered a clean-energy source, and Nemet said that’s a path anyone could follow.

“Everyone has access to electricity. Start using more electricity. Start cooking with it; start heating houses with it,” he said.

Heat pumps are one way to do that. Most popular in the Southern states, according to the U.S. Energy Information Administration, these electrified heat-and-cooling distributors are becoming popular in cold regions of the world. 

Nemet led a Forward in Energy Forum at the Wisconsin Energy Institute in October on the current and future outlook for energy prices and how the IRA might affect energy affordability, especially for everyday Wisconsinites. He told the Peninsula Pulse that the IRA will make renewables twice as big.

“So it’s going in the right direction,” he said. “But the question is, can we do it fast enough to really get where we need to go?”

How Door County Heats Its Homes

Home Heating Source# of Door County Households
Heating oil544
LP gas (propane)5,177
Natural gas5,280