(NewsNation) — Millions of Americans could struggle to keep up with their utility bills this winter, as home heating costs are projected to rise roughly three times the overall rate of inflation, a new report shows.
The average household is expected to spend nearly $1,000 heating its home this winter, up 9.2% from last year and adding about $84 to the seasonal bill, the National Energy Assistance Directors Association said in its updated outlook.
Families that rely on electricity for heating are expected to see the steepest increase, with costs rising to $1,223 for the season — up 12.2%, or about $133 more than last year. Those who use natural gas are projected to spend $704, an 8.4% increase, or roughly $54 higher.
“These increases may not sound dramatic to higher-income households, but for families already
struggling, they are devastating,” said Mark Wolfe, executive director of NEADA, which represents state energy assistance agencies.
The organization’s updated forecast attributed the price hike to surging electricity and natural gas prices, along with colder-than-average weather.
NEADA estimates that 1 in 6 U.S. households is already behind on energy bills and as many as four million households could face power shutoffs in 2025 — nearly 500,000 more than last year.
Electricity prices were up 5.1% in September from a year earlier, while the cost of gas piped into homes was up 11.7%, according to the latest Consumer Price Index. Thursday’s inflation report will provide updated insight into how those costs have changed more recently.
Why are energy bills rising?
Rising energy bills have become a major pain point for household budgets in recent years, but the explanation isn’t straightforward.
Since 2021, the average monthly electric bill has climbed almost 30%, NEADA noted. The group said the rise reflects a combination of high interest rates that have driven grid financing costs, increased reliance on natural gas for power generation, surging demand from data centers, and aging infrastructure.
Natural gas prices, meanwhile, have risen nearly 50% over the past year, driven in part by rapidly expanding liquified natural gas exports that are increasingly tying U.S. prices to volatile global markets, NEADA said.
Natural gas is the most widely used residential heating fuel in the U.S., serving as the primary heating source in 46% of homes, according to the Energy Information Administration (EIA). Electricity is also widely used, particularly in the South.
“Energy is not a luxury — it is a necessity,” Wolfe said in the report. “No family should lose power because
they cannot afford rising utility bills.”
NEADA urged Congress to boost funding for a federal program that helps low-income households with their energy bills, noting that low and moderate-income families now spend 6 to 10% of their income on energy.
Separate government forecasts point to smaller increases this winter, though outcomes will hinge heavily on weather conditions.
The EIA recently raised its energy price outlook, citing expectations for a colder season than previously forecast, but its baseline estimates remain more conservative than NEADA’s projections.
Households that primarily rely on electricity for heating are expected to spend about 5% more this winter than last year, according to the federal agency. In a colder-than-expected scenario, however, households in the Midwest and Northeast could see double-digit increases.
Natural gas users are forecast to see a 3% cost increase this winter, but that could rise to 8% if temperatures are colder than expected.