Americans using electricity to heat their homes should be prepared to bundle up a bit more this winter as utility rate increases are expected to escalate by 10.2 percent.
A Sept. 19 announcement from the National Energy Assistance Directors Association (NEADA) forecasts electricity costs will rise from an average of $1,093 in 2024 to $1,205 this year.
“Electricity prices are rising more than twice as fast as the overall inflation rate due to utility investment in transmission and distribution systems, and the rising cost of natural gas,” the NEADA statement indicated. “Rapid growth in large data centers are also increasing demand for electricity.”
The NEADA also predicts higher natural gas costs, with the average household gas bill growing from $639 to $693. Higher wholesale gas prices and strong liquified natural gas (LNG) export demand are responsible for the price hikes.
However, those homes fueled by oil heat may see a decline of 4 percent in costs this winter—dropping on average from $1,515 to $1,455. Propane gas users can expect to save up to 5 percent during the colder months, with average prices sliding from $1,316 to $1,250.
The NEADA noted softer petroleum costs, and the easing of last winter’s supply constraints may be responsible for those price cuts.
Overall, prices for heating homes this winter will cost about 7.6 percent higher than last year nationwide, with costs for an average heating season at $976, as opposed to $907 in 2024.
Geographically, the Midwest could be hit the hardest with an estimated 19.7 percent increase in electricity costs, equating to an average of $1,498 for this coming winter, compared with $1,251 for the 2024–25 winter. The Midwest is also expected to experience a 16.4 percent jump in natural gas prices, growing from $600 last winter to $698 for the coming winter.
The West also will see utility prices grow at a projected 18 percent for electricity and 13.5 percent for natural gas. The South could see a 21.4 percent hike in winter electricity costs, but only a 5.3 percent increase for natural gas.
Surprisingly, the Northeast projected costs are at much lower rates with an average increase of 7.2 percent for electricity and 8.1 percent for natural gas.
Overdue payments for both electricity and natural gas are also on the rise. Since December 2023, national household energy debt has increased by close to 31 percent, from $17.5 billion to $23.0 billion by May 2025. Higher heating costs in the winter and greater use of air conditioning during the summer is being blamed for the surge.
“About one in six U.S. households is already behind on their utility bills before winter starts,” the NEADA stated. “Higher heating costs, particularly for households with electric heat, will make them fall further behind.”
In the meantime, NEADA noted, federal aid for families with utility debt is shrinking. Funding for the Low-Income Home Energy Assistance Program (LIHEAP) fell from $6.1 billion in 2024 to about $4.1 billion this year.
Eligibility requirements for LIHEAP and the amount of assistance vary by state, and applications are made at the local level.
According to the NEADA, both the House and Senate appropriations bills do include a small increase for coming fiscal year, but they are not yet passed, and don’t include any additional resources to help deal with rising home energy costs.
Meanwhile, the NEADA is petitioning Congress to restore LIHEAP to $6.1 billion annually, and also to create contingency funds for climate emergencies and price increases.
