Published: November 5, 2025
By: Concentric Staff Writer
Key Takeaways:
- U.S. Energy Information Administration forecasts for household spending on heating this winter vary among resources, with electricity higher, natural gas flat with last year, and propane and heating oil expected to drop.
- U.S. inventories of fuels also vary, with natural gas and propane higher and heating oil lower.
- The primary heating fuel for houses in winter in the U.S. is natural gas, followed by electricity, propane, and heating oil at much smaller percentages.
- Residential electricity prices have increased most sharply in the Mountain, Middle Atlantic, and South Atlantic regions due to increases in natural gas prices, and expenses associated with storms and wildfires.
Financial expenditures on heating fuels for the upcoming winter are forecast to be a mixed bag, but only prices for electricity used for heating houses are due to rise, according to a new report from the U.S. Energy Information Administration (EIA).
Average winter household expenditures across the country for natural gas this winter are expected to be about the same as last year, while propane and heating oil are set to drop, according to the EIA’s Winter Fuels Outlook. These fuel types, along with electricity, are the primary heat sources in winter, with natural gas at 46 percent of that demand, electricity at 43 percent, propane at 5 percent, and heating oil at 3 percent. The usage of certain fuel types also varies depending on the region of the country.
“The consumption and expenditure forecasts in the Winter Fuels Outlook apply to a home’s main space heating fuel,” the report says. “For most households, the main space heating fuel is also used for other purposes. Households primarily heating with natural gas equipment, for example, may also use natural gas for water heating, cooking, or clothes drying.”
The report forecasts average residential consumption, price, and household expenditures for various fuels for up to four U.S. Census regions: the Northeast, Midwest, South, and West. The prices will be updated throughout the winter in the Short-Term Fuels Outlook.
Temperatures are always an uncertainty in forecasts, but they are expected to be similar to last winter, which drives a similar pattern of residential energy consumption, according to the report. This means that much of the expected expenditures for energy will be driven by energy prices.
Winter could be slightly milder across much of the country, especially in the Northeast, EIA said, with heating degree days (HDD) used to measure winter weather effects. Five percent fewer HDDs are expected in the Northeast this winter, with three percent fewer HDDs in the South and 1 percent fewer in the Midwest and West.
Fuel inventories are also a factor in winter supply and affect prices, with stocks for natural gas and propane currently at higher levels than the five-year average for 2020-2024, keeping prices generally below last year. Distillate fuel inventories, including heating oil, are slightly below the five-year average, and lower crude oil price forecasts are expected to push down heating oil prices.
The report examines a base case with slight drops in heating expenditures for the country as a whole and drops in every region in the U.S. except the Midwest. EIA also looked at scenarios where winter is 10 percent colder than last year and 10 percent warmer. Energy expenditures in a given household are also dependent on the size and efficiency of individual homes.
The impact of wholesale energy prices on retail prices also varies among fuel types, with the impact of natural gas on electricity prices subject to a lag because of the way utilities are regulated. But natural gas prices correlate more directly with electricity prices over longer periods.
“Some state utility commissions set the rates utilities can charge for natural gas deliveries a year or more in advance of billing to reflect the cost of wholesale natural gas that utilities purchased over many months,” the report says.
State regulators also vary in their timing and frequency of rate change approvals, with retail rates sometimes adjusted several times a year in times of high fuel-price volatility. Charges other than commodity natural gas prices also affect bills, such as utility operating costs and costs to transport natural gas and distribute it to customers.
Increases in electricity costs might pass through to customers more quickly in states with retail choice and energy markets compared to traditionally regulated states. However, wholesale prices for propane and heating oil pass through to retail customers much more quickly, within a period of four to six weeks, because prices for those commodities are not regulated by state public utility commissions.
While 46 percent of U.S. homes use natural gas as a heating fuel, EIA’s base case predicts that slightly milder winter temperatures will reduce natural gas consumption by 2 percent this winter. But that slightly lower natural gas consumption is offset by an average 1-percent increase in natural gas prices, with variations across different regions.
In EIA’s 10 percent colder scenario, a 6-percent, or 6-million cubic-feet (MCF) increase in natural gas consumption is projected compared with last winter. The warmer-weather scenario would push down natural gas consumption by 8 percent compared with last winter and lead to a 4-percent decrease in energy expenditures for households.
Winter household natural gas bills in the Midwest are due to rise about 2 percent to about $610, driven by slightly higher natural gas prices in that region. Midwest natural gas customers are expected to consume about the same amount of the resource as last year: 59 MCF.
Households primarily using electricity for heating are expected to pay an average of 4 percent more this winter nationally due to a projected 5-percent increase in electricity prices. But these effects will be offset by a projected 1-percent drop in consumption due to the milder winter.
Electricity expenditures in the Midwest and South are expected to increase by a similar 4 percent despite slightly lower consumption, while expenditures in the Northeast and South are expected to increase by about 3 percent.
Winter expenditures will logically be higher in colder regions, with the Northeast spending the most at an average of $1,520 over the winter, followed by the Midwest next at about $1,280 over the season.
Residential electricity prices have increased most sharply in the Mountain, Middle Atlantic, and South Atlantic regions due to increases in natural gas prices, expenses associated with storms and wildfires, increasing insurance costs, and infrastructure expansions due to load growth.
Retail electricity prices are set to increase in the Northeast, which includes the Middle Atlantic and New England states, by about 6 percent to an average of 24 cents per kilowatt-hour (kWh). In the Middle-Atlantic division, New York, New Jersey, and Pennsylvania, prices are due to increase more than the Northeast average of 6 percent.
In the West, which includes the Pacific and Mountain regions, residential prices are expected to average 20 cents per kWh, with the smallest jumps in California, Oregon, and Washington, and the lowest expected increase at about 2 percent.
For propane, lower spot prices are driving a trend towards lower household prices, and the slightly milder winter is set to push prices down. Propane inventories are higher than the five-year average.
Working natural gas inventories in the U.S. are currently at about 5 percent above the five-year average and wholesale price increases this summer were eased by “robust” production and lower power sector consumption. Prices are expected to increase going into winter as natural gas exports increase and storage withdrawals begin to exceed storage injections.
While price changes for natural gas are expected to be modest nationally, certain regions will see more extreme changes, such as the Mountain region where prices are expected to rise. Prices in the Pacific and South regions are expected to be much lower than last winter.
The information in the report is for all end uses associated with a certain home’s main heating fuel, which are generally a subset of a household’s total energy costs except for all-electric homes, the report says.
Household consumption and financial expenditures for space heating were based on information from EIA’s Residential Energy Consumption Survey (RECS). In developing forecasts, it converts annual RECS data to monthly values and EIA also uses monthly forecasts available in its Short-Term Energy Outlook.
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All views expressed by the author are solely the author’s current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, related companies, or clients. The author’s views are based upon information the author considers reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.
