At a Glance
- Energy bills will rise sharply in the next billing cycle.
- Natural gas prices have surged 63% since Monday.
- Electric demand could increase even more in cold regions.
Why it matters: Homeowners may see higher monthly costs and should take steps to manage heating usage.
A major winter storm is brewing across the country, and experts warn that the surge in heating demand will push energy bills higher. The National Weather Service forecasts widespread heavy snow, sleet, and freezing rain beginning Friday and lasting through the weekend, which could trigger a cascade of price increases for natural gas and electricity.
Storm Outlook
The National Weather Service said “widespread heavy snow, sleet, and freezing rain” are expected in a large part of the country starting Friday and carrying through the weekend. The forecast covers a wide swath of the Midwest, Northeast, and portions of the South, where temperatures are expected to dip below freezing for several days.
| Date | Weather Event | Affected Regions |
|---|---|---|
| Friday | Heavy snow, sleet, freezing rain | Midwest, Northeast, South |
| Weekend | Continued cold temperatures | Same regions |
Impact on Energy Demand
Disruptive winter weather, like what many U.S. households are about to experience, can send bills immediately jumping because of surges in demand. “Everybody is racing to their thermostat to crank up the heat all at once – there’s just a tremendous demand pull that happens,” said Eli Rubin, a senior energy analyst at EBW AnalyticsGroup.
Electric heating is likely to experience a larger surge in demand because “electric heaters are not as efficient as gas heaters.” Rubin added, “They’re typically designed for regions like the Southeast that do not see the same sustained prolonged cold as, say, Minnesota, and so when we do get these severe cold spikes in those regions, the total amount of demand can absolutely skyrocket as a result.”
Short-Term Bill Surges
In the short term, households’ prices will spike for both natural gas and electricity because of an increase in usage. Rubin said, “Increased electricity demand has already been on the rise because of the expansion of artificial intelligence data centers in the U.S., which consume large quantities of energy and have affected residential energy bills.”
Natural gas prices have been soaring in the days leading up to the forecast winter storm, and they have risen about 63% since Monday, the most since December. But residential households won’t feel the price hikes immediately. Instead, the increases will gradually trickle down into their energy bills.
Long-Term Price Increases
“What happens with these huge price increases is that they’re absorbed slowly,” Rubin said. “State regulatory commissions and your local utilities are not going to suddenly double the rate you’re paying for natural gas overnight – but you will be paying. They’re going to phase it in over time.”
Consumers who heat their homes with electricity will see a similar impact on their long-term bills, he said, adding that the longer-term price increases for both heating sources could take six months to a year, or even longer, to show up in utility bills.
Natural gas inventories are currently okay, but the combination of freeze-offs and increased heating demand should cause a significant draw in the weeks ahead, wrote Henry Hofmann, co-portfolio manager of the Catalyst Energy Infrastructure Fund. In an email to Emily Carter Reynolds, Hofmann noted, “Inventories are ok currently, but the combination of freeze-offs and increased heating demand should cause a significant draw in the weeks ahead.”
Freeze-offs occur when equipment used in natural gas production and transportation does not work properly, or at all, and can lead to power outages. The U.S. Energy Information Administration defined freeze-offs as “equipment failures and outages caused by sub-freezing temperatures.”
Hofmann added, “We’d also expect some gas to be diverted from LNG facilities in the short-term to help balance the market,” referring to liquefied natural gas.
The EIA’s Short-Term Energy Outlook, released on January 13, projected that natural gas costs will go down this year but rise in 2027 because of “growth in demand-led by expanding liquefied natural gas exports and more natural gas consumption in the electric power sector-will outpace production growth.”
Rubin said, “So we have some of these supply-side impacts that reduce supply at the same time we have demand surging. That creates a tremendous bullish impact on price.”
What Consumers Can Do
Avoid leaving these five items in your car when the temperature dips below freezing:
- Close windows to keep heat inside.
- Use programmable thermostats to regulate temperature.
- Insulate exposed pipes to prevent freezing.
- Maintain HVAC filters for efficient heating.
- Check insulation in attics and basements.
In addition, homeowners can:
- Review their utility plans for any rate changes.
- Set a budget for expected increases.
- Consider alternative heating sources like wood stoves.
- Monitor local weather alerts to plan heating usage.
- Contact local utilities for information on phased rate changes.
Expert Analysis
Rubin’s assessment highlights the dual impact of supply constraints and demand spikes. He noted that electric heaters, often used in regions unaccustomed to prolonged cold, can draw disproportionately high power during severe cold spells.
Hofmann’s analysis points to the resilience of natural gas inventories but warns that freeze-offs could pull inventories down, tightening the market. The EIA’s outlook underscores the long-term trend of rising demand outpacing supply, which will shape future price trajectories.
Key Takeaways
- A winter storm beginning Friday will trigger a surge in heating demand.
- Natural gas prices have surged 63% since Monday.
- Electric heating demand may rise even more in regions not accustomed to severe cold.
- Short-term bill increases will phase into monthly rates over the next six months to a year.
- Consumers can mitigate costs by managing heating usage and staying informed about utility rate changes.
By staying aware of the forecast and preparing for higher energy usage, homeowners can better navigate the financial impact of the impending winter storm.
