U.S. households heated mainly by electricity will spend about 4% more this year to stay warm over the winter due to higher power price forecasts, the Energy Information Administration said on Wednesday in its winter fuels outlook report.
Demand growth for electricity from data centers powering the AI boom, and the electrification of manufacturing and other industries like transportation, is widely expected to outpace the addition of new supply, resulting in higher power prices for American customers.
Households heated by electricity will pay more this winter even if the weather is around 10% warmer than the EIA’s base-case scenario, the agency said.
Meanwhile, homes heated by natural gas will likely pay about the same this winter as last year, and homes using propane or heating oil as their main heating source are expected to pay less this winter, the EIA said.
National prices for heating with natural gas will average about 1% higher this year but consumption is set to decline 2%, contributing to a 1% decrease in average bills, the EIA said.
National average consumption is expected to fall by 4% for heating oil, and by about 2% for propane, the EIA said.
Electricity consumption is also expected to average about 1% lower this winter than last, as prices rise by 5% nationwide, the EIA said.
The number of homes using electricity as their main fuel is expected to rise 2% this winter to over 57 million, while the number of homes using heating oil drops by 4%, the EIA said.
Regulators have been pushing to transition homes from heating oil, which causes more pollution and is used predominantly in the U.S. Northeast, to comparatively cleaner-burning sources like gas and electricity.
The EIA cautioned that actual consumption and expenditure will vary based on how harsh the winter is and how commodity prices trade over the coming months.
The agency will update its winter fuels forecasts each month through March 2026 to reflect those changes, it said.
(Reporting by Shariq Khan in New York Editing by Bernadette Baum)