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Lower Heating Costs Predicted for This Winter

South Burlington, Vermont -- October 13, 2009

    It's that time of year -- time to turn on the heat. While the cold may be biting, it is expected to take less of a bite out of household budgets. Vermont Gas says its rates are dropping for the fifth quarter in a row.
     "Basically the rates will be about 17 percent lower than they were a year ago at the same time," Vermont Gas spokesman Jim Condos said. "That's good news. That translates for the average residential customer to about $300 in annualized savings."
     Just 14 percent of the state heats with natural gas. About 58 percent heats with oil. After a price spike last year, heating oil customers are expected to get a break this year because of strong supplies.
     "The Energy Information Administration just released a study that shows supplies are at their highest point since 1983," said Matt Cota, director of the Vermont Fuel Dealers Association. "Especially here in the Northeast, supplies are 17 percent higher than they were last year and the highest they've been over the past five years. That's good news for the consumers and retailers who deliver the fuel because it means lower prices."
     The Vermont Fuel Price Report published monthly by the state's Public Service Dept. indicated in September that fuel oil is priced at $2.40 a gallon -- that's down 42 percent from the $4.13 a gallon people were paying in September of 2008. Propane is down 26 percent -- $2.43 a gallon now, compared to $3.27 a year ago.
     Cota says consumers have the recession to thank for those lower prices -- a simple lesson in supply and demand.
     "Heating oil is a distillate, like diesel fuel," he said. "If there's less diesel fuel used in manufacturing, less diesel fuel used to ship goods across the country because of the downturn in the economy, the good news is there's less demand and that reduces the price."

Kate Duffy - WCAX News