ST. PAUL — Much of the region got its first proper dose of winter weather this past week, and as the snow dies down and the cold sets in, heating costs are likely on the minds of many households across the region.
Supply chain disruptions and increased demand as the world's economy returns to a normal pace have caused the prices of many commodities to soar, and the cost of fuels used to heat homes is no exception.
The U.S. Energy Information Administration in an October outlook report predicted average households that use natural gas for heating could spend $746 over the winter — 30% more than last year. The forces driving the rising costs are predicted higher prices and consumption, the report said.
Weather forecasters expect this winter to return to normal after an abnormally warm and dry season across the region last year. While many meteorological factors shape winter weather, the National Weather Service predicts a La Niña pattern will make this coming winter "significantly colder" than the last.
Natural gas-heated homes are just one part of the picture. In remote areas of rural and northern Minnesota, many don't have access to natural gas lines and instead rely on propane, heating oil or electricity to keep their homes warm. Those sources can cost a lot more than getting gas directly, and if this winter is colder than normal it could mean significant cost increases.
Predominantly rural households that use propane heating could see their winter heating costs increase 94% if the winter is colder than normal, according to the Energy Information Administration outlook report. Even if the winter is warmer than normal, propane heating costs are expected to increase by 29%. Midwestern homes can expect to spend an average of $1,805 over the winter, the report said.
Evidence of that can already be seen in data from the Minnesota Energy Assistance Program showing the distribution of more than $28.5 million in assistance grants to 25,000 households since the beginning of October this year. Residents of many northern counties, such as St. Louis, Itasca and Beltrami counties — received some of the highest amounts of aid on average in the state, and more than half of the households had a member with disabilities or older than 60.
Average benefits per household in Beltrami County have so far reached $1,536 per household, overshadowing the average benefit seen in core metropolitan counties like Hennepin and Ramsey, where households saw average benefits closer to $900.
The issue is a matter of the energy source and a colder climate up north, says Office of Energy Assistance Programs Director Michael Schmitz, whose federally funded program expanded this year to serve more households in the state.
"The average Minnesota household pays about 2% of annual income on energy," he explained.
"But there are households who pay much, much more, some as high as 30% of their income because they have lower incomes and because the way they heat or cool their home is not as efficient as it could be."
The assistance program is a federally funded initiative that provides grants to assist low-income households to help pay for energy expenses. Assistance is distributed through local providers across the state. Homeowners and renters are usually eligible for assistance in the form of grants of $300 to $2,000, which are directly paid to utilities. Households at or below 60% of the state median income are eligible. Under new guidance from the state Commerce Department, benefits are now as high as $3,200.
In a typical year, the state Energy Assistance Program Distributes $80-100 million. This year that could grow to $200 million, said Schmitz, who estimates up to 600,000 Minnesota households — one in four in the state — could be eligible for assistance this winter. The federal government awarded the state program $106 million for winter 2021-2022.
The program has expanded eligibility to the highest incomes permitted under federal law, and average household benefits are double what they were last year at $1,100, per the program's estimate.
In addition to helping with bills, Minnesota's Energy Assistance Program also offers grants to help households repair and replace furnaces and make energy efficiency improvements to homes. It also provides water bill assistance.
Those interested in applying can find more information online at https://mn.gov/energyassistance. Households can find a local assistance provider by calling 1-800-657-3710.