1. Residential Energy 2017: Fuel Prices, Heating, and Cooling
For
National Energy Assistance Directors Association
February 28, 2017| Washington, D.C.
Presented by Tom Leckey
Assistant Administrator for Energy Statistics, U.S. Energy Information Administration

2. Overview Macroeconomic observations Price trends for residential fuels
Petroleum
Natural gas
Electricity
Features of residential energy demand
Heating fuels, natural gas, electricity
Forecast trends for cooling energy
Links to EIA web site
Tom Leckey, NAEDA
Washington, DC February 28, 2017

3. Key Takeaways
Residential retail prices for most fuels are slightly higher than last year, rebounding from very low prices last winter
Natural gas is up 12 percent
Electricity is up 1 percent
Fuel oil is up 19 percent
Propane is up 13 percent (Northeast), and 20 percent (Midwest)
Fuel prices are projected to increase slightly next winter;
Electricity is becoming more important as a heating fuel;
Air conditioning use continues to grow; summer electricity prices are projected to be slightly lower in 2017.
Tom Leckey, NAEDA
Washington, DC February 28, 2017

4. Expenditures on energy as a percentage of GDP are near a 25-year low
U.S. annual energy expenditures
Share of gross domestic product
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

5. Energy’s share of household expenditures has declined dramatically in the last two years
Tom Leckey, NAEDA
Washington, DC February 28, 2017

6. WTI is forecast to average $53/barrel in 2017 and $56/barrel in 2018; Brent averages $1/barrel above WTI in both years
WTI crude oil price
dollars per barrel
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

7. Relatively stable crude oil prices are expected to keep U. S
Relatively stable crude oil prices are expected to keep U.S. average retail gasoline prices between about $2.20/gal and $2.60/gal
U.S. gasoline and crude oil prices
dollars per gallon
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

8. Henry Hub natural gas spot prices are forecast to average $3
Henry Hub natural gas spot prices are forecast to average $3.43/MMBtu in 2017 and $3.70/MMBtu in 2018
Henry Hub natural gas prices
dollars per million Btu
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

9. Residential gas prices are higher this winter, but are projected to stay in seasonal ranges
Monthly average U.S. natural gas prices
dollars per thousand cubic feet
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

10. Rising natural gas wholesale prices are expected to contribute to rising retail electricity prices in
U.S. residential electricity price
cents per kilowatthour
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

11. January 2017 was the warmest January since 2006, but for the winter overall, temperatures are expected to be slightly colder this year
U.S. winter temperatures by month
heating degree days (population-weighted)
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

12. Expenditures are up this winter, but are lower than the five years previously
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

13. Heating Fuel Market Shares Vary by Region
Tom Leckey, NAEDA
Washington, DC February 28, 2017

14. Yes, but do not use natural gas
RECS Question: Is natural gas available in your neighborhood?
Percent of homes No
(30%)
Yes, but do not use natural gas
(11%)
Yes, and actually use natural gas
(59%)
Tom Leckey, NAEDA
Washington, DC February 28, 2017

15. Tom Leckey, NAEDA
Washington, DC February 28, 2017

16. As the ‘electric-only’ share of homes has grown, more homes are dependent on electricity for heating, especially in the South.
Source: Residential Energy Consumption Survey, U.S. EIA
Tom Leckey, NAEDA
Washington, DC February 28, 2017

17. Natural gas share for home heating falls, except in the Northeast where it replaces fuel oil; electricity share increases are led by the South.
Source: U.S. Census Bureau, American Community Survey
Tom Leckey, NAEDA
Washington, DC February 28, 2017

18. Household behavior affects consumption as well.
Most households do not regulate heating by programming a thermostat.
51%
16%
Although more than half of households have a programmable thermostat, the programming feature is often not being used.
Has a programmable thermostat for heating
Yes No
Main Heating Equipment Control
Program automatically
Manually adjust
Turn off and on as needed
No control over temperature
Not applicable
Tom Leckey, NAEDA
Washington, DC February 28, 2017

19. NOAA is forecasting temperatures to be warmer than the 10-year average this summer, but slightly more mild than last summer
U.S. summer temperatures by month
cooling degree days (population-weighted)
Source: February 2017 Short-Term Energy Outlook
Tom Leckey, NAEDA
Washington, DC February 28, 2017

20. The share of homes using air conditioning continues to grow
Tom Leckey, NAEDA
Washington, DC February 28, 2017

21. Air conditioning demand is likely to grow, given population trends.
Tom Leckey, NAEDA
Washington, DC February 28, 2017

22. Links to Residential Energy Information
Short Term Energy Outlook
Weekly Natural Gas Storage Report
Hourly Electricity Consumption Data
Residential Energy Consumption Survey
Today in Energy
Contact information:
Tom Leckey, NAEDA
Washington, DC February 28, 2017