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A forecast of what this winter's heating bills will look like

ARI SHAPIRO, HOST:

Much of the country is enjoying above-average temperatures heading into the New Year's weekend, and 2024 could bring some relief when it comes to winter heating bills. People who use natural gas to stay warm are likely to enjoy lower costs for heat this winter than last. Those who rely on electricity or oil to heat their homes might not be so lucky. NPR's Scott Horsley is here with the economic weather forecast. Hey, Scott.

SCOTT HORSLEY, BYLINE: Hi, Ari.

SHAPIRO: Winter heating bills were up last year. What's in store this winter?

HORSLEY: It is a mixed bag. It depends on where you live and how you heat your home. Natural gas prices, as you mentioned, are a lot lower this year than last, so the Energy Department estimates that, on average, natural gas customers will spend about $160 less to heat their homes this winter than they did last year. That's a big deal because natural gas is the most popular heating fuel. It's used by almost half the homes in the country. And it's already the cheapest form of heating, and now it's getting cheaper. Electric heat, on the other hand, which is the second most popular, is expected to cost about the same as it did a year ago. And oil heat, unfortunately, is likely to cost more this winter - about $130 more for the typical household. Oil heat was already the most expensive form of heating, and it's not very common except in the Northeast. But people in the Northeast may have to burn more oil this winter because they're expecting somewhat colder temperatures than last year.

SHAPIRO: So potential savings for a lot of people this winter. Others may end up paying more. On balance, how are people coping with these energy bills?

HORSLEY: Even where heating bills are falling, they're generally not going back to where they were before the pandemic, and there are growing signs that a lot of families are feeling squeezed. Last year a record 8 million households received energy assistance from the federal government. That money is distributed through state energy offices, and applications suggest the need may be even greater this year. Mark Wolfe, who represents energy assistance directors around the country, says about 1 in 6 households have now fallen behind on paying their utility bills. Ordinarily, people who fall behind in the wintertime might be able to catch up in the summer. But, you know, the last two summers have been really hot in much of the country, so Wolfe says people had to run their air conditioners more, and that cost more money.

MARK WOLFE: The result is that families are further behind on their utility bills than they were at the beginning of the year.

HORSLEY: Right now Wolfe says overdue utility bills total around $20 billion. That's up from about 12 billion before the pandemic. Now, most utilities won't cut off your heat during the winter, even if you do fall behind on your bills. But unless people work out a payment plan, they could be in danger of shutoffs come spring.

SHAPIRO: Is there any other help in the pipeline?

HORSLEY: Not yet. You know, in recent years, the federal government did offer a lot of financial aid to families that wasn't directly tied to heating bills but did help to provide a cushion. That's all gone now, whether we're talking about pandemic relief payments or the expanded child tax credit. And what's more, federal spending on that energy assistance itself is set to drop by about $2 billion this year unless Congress comes through with some supplemental funding. Now, the Biden administration has asked lawmakers to set aside an extra $1.6 billion for energy assistance. But like so many other spending requests, that is stuck in legislative limbo, and Wolfe says there's no guarantee.

WOLFE: So if we don't get additional funds, it's an issue of math. We will have to cut back about 1.5 million households from the program and have a deep impact on low-income families who have to pay these bills.

HORSLEY: Without that additional funding, a lot of states will also face the prospect of cutting energy assistance during the hot summer months. So people who do get a break on their gas bills this winter might want to set some of that money aside. And those who are stuck paying more for heating oil may want to pray for an early spring.

SHAPIRO: NPR's Scott Horsley. Thank you.

HORSLEY: You're welcome.

(SOUNDBITE OF KENDRICK LAMAR SONG, "B****, DON'T KILL MY VIBE") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.