Gas Industry Says Heating Costs Will Fall 14% This Winter As Another Forecast Warns Of An Increase

Households that heat with natural gas will spend about 14% less this winter, the industry’s main trade group projected Thursday.

An organization representing state energy assistance directors reached the opposite conclusion Monday. Households heating with natural gas will pay 5.8% more, part of an 8.7% increase across all heating fuels that brings the average winter heating bill to $1,030, the National Energy Assistance Directors Association (NEADA) projects in its winter report.

The projection from the American Gas Association (AGA) covers space heating alone. About four percentage points of the decrease come from milder weather and the rest from lower gas costs, according to the outlook the AGA presented on a media call.

“This winter’s story for natural gas consumers is about lower prices and reliable service,” Richard Meyer, vice president of energy markets, analysis and standards at the AGA, said in a statement.

The AGA estimates that the average household will spend $497 on gas for space heating from November through March, against $794 for households heating with electricity, after adjusting for climate and home size.

Several forces are pushing household costs the other way, Jason Hayes, a senior research fellow for energy and environment at the Heritage Foundation, told the Daily Caller News Foundation. A move away from coal-fired electricity leaves natural gas carrying more of the load, and demand keeps climbing from electrification, electric vehicles and data centers.

“Wind and solar cannot supply electricity reliably or affordably, so the pressure on natural gas increases markedly,” Hayes told the DCNF. “Then add in the potential for a cold winter and overall demand can put immense pressure on this single energy source.”

“This is the energy version of the old saying, ‘don’t put all your eggs in one basket,’ and why it’s important to maintain other reliable, baseload energy sources such as coal and nuclear in our energy mix,” he added.

Federal policy favors natural gas development while many states restrict it, according to Hayes. Several domestic pipeline projects have been “delayed or halted by state-level restrictions or ongoing green lawfare campaigns,” he said. He named the Jordan Cove and Pacific Connector projects, the Constitution Pipeline and the Northern Access Pipeline.

A ruling by the 3rd U.S. Circuit Court of Appeals is holding up the Northeast Supply Enhancement project, which would carry more gas into New York City and Long Island, while New Jersey weighs a water quality certification, Hayes said.

Iranian drone and missile attacks have cut as much as one fifth of production at Qatar’s Ras Laffan industrial city, which is pushing QatarEnergy toward multiyear supply contracts with American producers, Hayes said. That is “pulling more U.S. production into global markets and could impact domestic supplies that would be available during cold periods,” he said.

QatarEnergy is negotiating contracts running through 2031, Reuters reported Monday.

Qatari cargoes account for roughly 20% of the global market for liquefied natural gas (LNG), and the war is disrupting their movement, Brent Sadler, a senior research fellow for naval warfare at the Heritage Foundation, told the DCNF. Seasonal limits on Russia’s Yamal project will reduce any surge capacity available to global markets, Sadler said.

“If LNG shipments remain impacted through the Strait of Hormuz and additional non-seasonally impacted shipping [is] not found, expect LNG prices to rise through peak demand in winter months,” he said.

NEADA, the National Association of State Utility Consumer Advocates, the Administration for Children and Families and ClearView Energy Partners did not immediately respond to the DCNF’s requests for comment.

About 27 cents of every dollar a residential customer spends on gas service pays for the gas itself, Liz Pardue, director of economic and regulatory analysis at the AGA, said during the call. Delivery takes about 49 cents through the fixed customer charge and distribution charges.

Riders and surcharges that regulators approve for work such as pipeline safety take 10 cents, taxes take just over nine cents, and the utility’s return on invested capital takes less than five cents. The commodity charge is the only piece that moves outside a rate case or a change in law, Pardue said.

More than 275 electric and natural gas utilities have raised rates, won approval for increases or proposed them since 2025, with potential added costs to customers exceeding $101 billion through 2028, NEADA found. Utilities cut off electric service about 13.4 million times and gas service about 1.7 million times for nonpayment in 2024, according to the same report.

The amount of gas held in underground storage should reach 3,969 billion cubic feet at the end of October, 5% above the five-year average, the Energy Information Administration said in its September outlook. That would be the highest pre-winter level since 2016, according to the AGA outlook.

One third of American households reported at least one form of energy insecurity in 2024, up from 27% in 2020, federal survey data show. The rate was 26% among owner-occupied households and 48% among renters, and the survey covers all fuels across a full year, according to the AGA outlook.

“Affordability for the average household is not the same as affordability for every household,” Pardue, of the AGA, said.

NEADA is asking Congress to raise funding for the Low Income Home Energy Assistance Program from $4 billion to $7 billion.

“This is a warning that too many families are entering winter with no room left in their budgets,” Mark Wolfe, executive director of NEADA, said in the report.

The constraint on supply is not the resource base but what sits between it and the customer, Meyer, the AGA vice president, said on the call. Pipeline and storage capacity will determine whether the gas reaches households as demand grows, he said. The heating season runs from Nov. 1 through March 31.