Energy rates are very localized, but right now natural gas prices are trending in the same direction across the globe – they’re going up. The growing demand for natural gas is actually something that’s creating a connection between communities around the world. Unfortunately, that common bond has created a supply vs demand issue that is causing concerns everywhere as we head into winter.
Natural gas is used all over the world for many purposes, most notably for heating and generating electricity. Last year a relatively mild winter paired with the pandemic shutdowns caused demand for natural gas to drop. That caused natural gas prices to plummet, and drilling for natural gas all but stopped.
Now that the world is emerging from the pandemic and winter is here demand for natural gas is far outpacing the supply. Oil and gas companies are back to drilling, but they haven’t produced enough to overcome the natural gas shortage.
Unfortunately, the issue is likely to get worse before it gets better, and that’s something end consumers need to keep an eye on this winter.
The Colder It Is, the Higher Natural Gas Prices Will Go
There’s no getting around it. Natural gas is going to be more expensive this winter. The biggest variable at the moment is the temperature. Meteorologists are predicting that this winter will be a cold one, definitely colder than last year, and that’s not good from a price perspective. The colder the temperature is, the higher the demand will be for natural gas heating, which increases the price for natural gas.
Here’s a quick look at the Energy Information Administration’s latest price estimations for natural gas based on the predicted winter temperatures:
- As forecasted – natural gas will be 30% higher year-over-year.
- 10 degrees warmer than forecasted – natural gas will be 22% higher year-over-year.
- 10 degrees colder than forecasted – natural gas will be 50% higher year-over-year.
As you can see, natural gas is definitely going to cost more, it’s just a matter of how much. Based on these estimates, it’s clear customers in some areas of the country will feel the price hikes more than others.
Getting Help in Your Community
Communities in the U.S. can consider themselves lucky compared to Europe and China. There the prices for natural gas are even higher and aren’t expected to go down anytime soon.
One discussion that has been sparked by the sharp increase in natural gas prices is how communities will cope with higher energy costs. From making sure all residents have safe living conditions in the winter to managing the operational costs of city offices, local governments across the country are dealing with the issue directly.
The conversation will continue in the coming months, but if you find yourself trying to manage rising energy costs right now there are a few things you can do.
Look into state assistance for energy expenses. The Low Income Home Energy Assistance Program (LIHEAP) is a federal program that’s managed at the state level. There are three portions of the program that can be particularly helpful at this time:
- The Home Energy Assistance Program (HEAP) -Those who qualify can get a one-time payment to pay down their utility bill.
- The Energy Crisis Intervention Program (ECIP) – This program is designed to provide fast assistance when it’s needed immediately, such as the power being disconnected within 48 hours.
- LIHEAP Weatherization Program – Low income households can get assistance lowering utility costs through free energy efficiency upgrades.
Check to see if the local government is offering help through home heating assistance programs. The local city or county government may have similar programs that provide additional or more immediate assistance for people living in the service area.
See if your energy provider can work with you. Some suppliers have payment programs for low income customers and customers that fall behind on their payments. It won’t reduce the cost, but it can make energy expenses more manageable this winter and help you avoid concerns about a shutoff.
Another option is being able to renew your existing fixed rate energy plan if it’s set to expire soon and the renewal rate you pay is lower than the market average. This can help you minimize the effect of price swings in the near future because your rate will stay the same no matter what happens. However, customers need to keep in mind not every supplier offers plan renewals and there could be limitations. At Major Energy we offer customers the ability to renew as long as the energy plan is renewed at least 30 days before it expires.
If you’d like to discuss your options for renewing your Major Energy plan you can contact our customer service team by phone or email. A team member can help you review features to determine which energy plan will be the best for your needs and budget this winter.