Heating New England Homes: The Good And Bad News

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Falling oil prices are perhaps nowhere more welcome than in northern New England, where most homes burn heating oil in their furnaces. But cheaper heating oil is refilling consumers' pockets just as high electric prices are emptying them out.

For example, a heating oil truck delivers 600 gallons of heating oil every two weeks to an old, four-story brick building in Concord, N.H. At last year's oil prices, each refill would have cost around $2,200. Right now, it's more than $300 cheaper.

Since several apartments in this building share one furnace, the building's owner, Leon Azniv, pays their heating bill, but he says he's not exactly watching the commodities market.

"It's on automatic delivery. The only time I find about it is when it doesn't work!" Azniv says.

Well, he is saving money. The Energy Information Administration estimates that between the falling cost of oil and forecasts for a slightly milder winter, the average heating oil customer should save around $630 through the heating season.

Great news for anybody with an oil tank, right? Yes, but unfortunately there's bad news out there for anyone with an electric meter. Electric rates across New England have jumped. That's because while New England has dramatically expanded the number of natural gas plants powering the region, it has not built out the pipelines to supply those plants.

For some, bills are increasing by as much as 50 percent. Ryan Clouthier, who administers a low-income energy assistance program in southern New Hampshire, says for many, rising electric bills have gobbled up the savings.

"Some people will rely on electric heat to try to reduce their oil burden, so they might be putting electric heat on in just one or two rooms and heating that way for the winter," he says.

Clouthier notes that the program has had 800 more applications for assistance this year than at the same time last year.

Cheaper oil could mean a reprieve from a different trend in New England: fuel switching.

"We have seen in the past few years a fair amount of market share disappear to alternatives like cordwood, wood pellets," says Rob Stenger, owner of Simple Energy, a fuel oil dealer in Lebanon, N.H.

He notes that in all of the New England states, the number of homes heating with oil has fallen over the past decade, while wood, propane and natural gas are on the rise.

So will that slow down?

"People, they sort of get amnesia. The price goes up, they get discipline; the price goes down and they forget all about it," Stenger says. "And I think ... over the last decade, I think that the disciplines associated with using less have some real staying power."

Stenger says customers he talks to say they expect higher prices to be just around the corner.