Want to boost your credit score? Join the waitlist for a new Cushion offering coming soon!

Natural Gas Prices Are Increasing. Here’s What It Could Mean for Your Utility Bill

In recent months, natural gas prices have increased, and experts anticipate that they will continue to increase into the colder months, causing utility bills to hit multi-year highs for consumers.

What Is Natural Gas?

Natural gas is one of several fossil fuels that is extracted from beneath the earth’s surface. Natural gas companies hold the fuel in natural gas storage facilities. Then underground gas mains transport natural gas to your home so you can power the appliances that you use on a day-to-day basis. Among consumers, natural gas is most commonly used for electricity generation, heating and cooling for both homes and water, cooking, drying clothes, and more.

Why Have Natural Gas Prices Increased?

The natural gas supply across the U.S. has fallen below average, but natural gas demand is high. There are a few reasons, and it mostly depends on natural gas production and natural gas storage.

In February 2021, a destructive cold-weather storm hit Texas and some Midwestern states, which increased heating demand. During the storm, natural gas companies had tight supplies and were forced to purchase natural gas at a premium in order to support local communities. This led to an increase in utility costs in the months that followed as the added costs funneled down to consumers.

An unprecedented heat wave during the summer of 2021, which most notably affected states in the Northwest, caused air conditioning demand to spike, which resulted in less energy being put into storage for the colder months.

Hurricane season also placed a strain on natural gas production and storage. According to the U.S. Energy Information Administration (EIA), 94% of natural gas produced in the Gulf of Mexico on U.S.-administered land was affected by either refinery shut down or reduced production.

Experts suggest that if the colder months are colder than normal, or if temperatures drop earlier than normal, winter heating bills could continue to rise.

What Does the Increase in Natural Gas Prices Mean for You?

The Energy Information Administration anticipates natural gas bills could increase about 30% in the U.S. this winter. Projections show that U.S. households will spend nearly $750 on heating between October 2021 and March 2022.

Analysts expect that Midwestern states will experience the largest increase in natural gas prices. These states include Illinois, Indiana, Iowa, Kansas, Minnesota, Michigan, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

Person reduces temperature on thermostat to lower utility bill

How to Lower Your Natural Gas Bill

Natural gas prices have already increased. With any luck, they will hold steady, but it’s not looking like utility costs will lower back to pre-pandemic levels in the near future. Therefore, it is up to you to find ways to decrease your natural gas bills in whatever ways that you can. You can start by ensuring that your home is insulated and sealed properly, regulating your heating and cooling, dropping the temperature on your water heater, or flat out asking your utility provider about lower rates.

Insulate and seal

If you want to lower your utility bill, it’s important to keep hot what you want hot and cool what you want cool. Check the seals around your doors and windows to make sure that you’re not losing hot air on a cool day or cool air on a warm day. Air leaks, whether hot or cool air, will run up your bills.

To ensure that you are not losing hot air on a cool day, you can hold a damp hand near a closed window or door seals on a day when it’s particularly breezy. You could also hold a lit candle in front of the seals to see if the flame flickers.

Every once in a while, you should inspect your air ducts for gaps, tears, or disconnections. You should also check your appliances, such as refrigerators and freezers. If cold air is leaking out, you won’t only run up your monthly natural gas bill but could potentially lose a bunch of food in the process.

Regulate heating and cooling

Keeping an ideal temperature in your house is more than just insulating and sealing. You should make sure that the air pumping into your home is carefully monitored. There are a few ways that you can do that.

  • HVAC system: Regulating your heating, ventilation, and air conditioning (HVAC) system can work wonders for your electric bill. According to the U.S. Department of Energy, you can save up to 10% per year on heating and cooling by turning your thermostat back 7–10 degrees Fahrenheit for 8 hours a day. If you work in an office, this can be an ideal time to cut back. You could also lower the temperature a few degrees at night (cooler temperatures help you get a more restful sleep anyway), or when you head off for a trip.
  • Mother nature: Run your HVAC system — don’t let it run you. Regularly check in to see if you should actually be running your HVAC system. When the sun is shining, open up your blinds or windows to let it heat your home, and when it’s breezy outside, use it to cool and circulate the air in your home.
  • Programmable thermostat: If you’d rather not remember to move your thermostat up and down constantly, a programmable thermostat can be a worthwhile investment. It allows you to program your heat and air conditioning unit to turn on at different times of the day, and then automatically heats and cools based on the settings that you’ve chosen.

Cool down your water

Use the cool or cold water setting when throwing in your next load of laundry. According to ColdWaterSaves.org, washing on hot and rinsing on warm costs about $265 per year while washing and rinsing with cold water only costs $16.

You can also turn your hot water heater temperature down a few notches to use less energy and reduce your electric bill. The default temperature for a standard hot water heater is 140 degrees, but lowering it 10 (or even 20) degrees can save you more than $60 each year in standby costs alone.

When you account for the cost of heating water for showers, laundry, dishwashers, and other appliances, lowering your hot water heater temperature could put more than $400 back in your pocket annually. Consider lowering the temperature on your hot water heater at all times, but especially when you’re out of town or away from home for an extended period of time.

While the EPA says that a hot water heater set at 120 degrees is safe for the majority of the population, you should consider keeping your hot water heater at a higher temperature if you’re immunocompromised or have chronic respiratory disease.

Ask about lower rates

If you’ve insulated and sealed, regulated the temperature in your home, and made the move to cool water but are still on the hunt for money-saving methods, consider contacting your utility company for lower rates. Worst case scenario: They say no. Best case scenario: You save money on your natural gas bill.

Assume that everything in life is negotiable, including your utility bills. When heading into a call with energy companies, keep a couple of things in mind:

  • Know what you’re looking for: The customer service representative is not a mindreader. If you’re looking for a discount because costs have increased since you initially opened an account, let them know.
  • Know what’s out there: Shop around for other offerings in your area. Some towns, especially smaller ones, won’t have a ton of competitors, but it helps to know what kind of prices other companies are offering so you can use them as points of leverage in your negotiation.
  • Know when to say “no”: You don’t have to accept the first offer that the representative gives you, nor do you have to accept any of the offers. Sometimes, retention offers depend on who you get on the line. If you don’t reach a good solution, try calling back a couple of days later to speak with a new representative.

Read eight more ways to lower your utility bill here.

Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $11 million in bank and credit card fee refunds—and we’re just getting started.

*Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call.

Leave a Reply

Your email address will not be published. Required fields are marked *

Want to boost your credit score? Join the waitlist for a new Cushion offering coming soon!

Signup for our newsletter to receive product updates, financial tips, & more.