Households across the United States could be paying nearly 30 percent more to keep warm this winter, according to recent projections from the U.S. Energy Information Administration, or EIA. And consumers struggling to pay their heating bills might unwittingly be funding efforts to keep them reliant on volatile, expensive fossil fuels.
Privately owned gas and electric utilities wield a lot of power in the state and federal government. They’re regulated by state-level commissions tasked with approving rate hikes, used to finance new infrastructure as well as profits and executive pay. Rate requests from gas and power providers also routinely include language allowing customers’ bills to be used to pay dues to trade associations that lobby against electrification and reducing reliance on fossil fuels. Utilities can also use expedited processes to raise rates based on fuel price increases.
The electric utility Eversource has asked regulators to allow it to raise rates by more than 40 percent for customers in Massachusetts. National Grid has requested a 64 percent hike in electricity rates for its service area in the state, translating to a $114 increase in typical monthly heating bills. It has also requested a 22 percent increase for gas-powered residential heating. In Connecticut, Eversource—whose CEO made $4.7 million in 2021—is seeking a rate hike that could increase average customer bills by 50 percent.
An expert tracking these increases said that future filings would reveal whether these requests will include trade association dues. Whether or not they do, a regulatory structure that allows companies to make their customers foot the bill for higher fuel costs has made the problem worse. “Utilities don’t make a profit on the price of fuel, and it is passed through directly to customers to pay,” said Keriann Conroy, a researcher for the Energy and Policy Institute, a nonprofit utility watchdog. At the same time, she added, “utilities don’t see the risk in continuing to invest in gas because the price volatility is all passed on to customers.”
Affordability issues are especially acute in the Northeast, where energy costs are 15.4 percent higher than the national average. Compounding that is the roughly five million households there who rely on heating oil to warm their homes, nearly all of them in New England and the mid-Atlantic. The markets for this fuel source are largely unregulated, with prices tracking to the cost of crude oil. The EIA has said that costs for households that use heating oil, a diesel-based product, will rise by 45 percent this winter. More than 60 percent of homes rely on home heating oil in Maine, where prices are already up more than 61 percent over the previous year and by 70 percent nationwide as reserves sit at historical lows.
The spike in heating oil prices is being driven both by increased demand for non-Russian oil and gas and by a loss of refining capacity over the last several years. To remedy high heating costs, the White House has considered releasing supplies from its emergency heating oil reserve, and said that “all options remain on the table,” including a possible restriction on exports.
In New York, ConEd has requested that the Public Service Commission approve a 9.6 percent rate hike for electricity and a 14.7 percent hike for gas, arguing that the steep rise in rates would fund “clean energy investments in support of New York State’s climate goals and infrastructure upgrades that will help keep customers in service during severe weather.” That rate hike, though, would also pour millions of dollars into fossil fuel infrastructure.
“This money is being asked to be given to them so they can make investments,” said Zohran Mamdani, the state assembly member who represents Astoria, Queens, “but often those are being used as a means of greater extraction from working-class New Yorkers while investing in more fossil fuels.” Early this year, New York City–based news site The City reported that 1.3 million residential gas and electric customers across New York were 60 or more days behind on their bills, totaling more than $1.7 billion. Residential ConEd customers in New York City and Westchester owed $819 million. ConEd spent 39 percent more compensating its top executive in 2021 than in the previous year.
There are limited options for those struggling to pay bills—particularly as pandemic-era relief measures have expired. The White House has pledged $4.5 billion toward the Low-Income Heating Energy Assistance Program, which is distributed at the state level. Relief doesn’t always find its ratepayers, though. A report released last year by the Center for Biological Diversity and Bailout Watch found that 16 electric utilities that raked in $1.25 billion in federal pandemic relief cut off service one million times.
While New York’s legislature has allocated $250 million to help low-income New Yorkers pay overdue bills, Mamdani argues that such relief isn’t a substitute for addressing the deeper causes of that debt. Among the key drivers of the debt, he said, is “the belief that the energy market should be privately managed at the expense of the public.”
Utilities can also claw back money from customers if fuel prices spike beyond their projections. That’s exactly what the Florida Power and Light, or FPL, did last year, when it successfully asked the Florida Public Service Commission to let it collect an additional $810 million from ratepayers as fuel prices rose following Russia’s invasion of Ukraine and ensuing Western sanctions on Russian oil. FPL uses gas to generate nearly three-quarters of its electricity.
Gas and gas-reliant utilities like FPL have been especially active in pushing back on electrification, creating a divide among companies based on how much they could benefit from bringing activities like heating and transportation onto the grid. “The electric utilities stand to benefit from increasing electrification, where the gas utilities are fighting for their life and their own viability in a much more existential way,” Conroy told me. They’ve therefore pursued a scorched earth campaign against most any policy that could shift society away from gas and the volatility of fossil fuel prices.
The American Gas Association—a powerful trade association funded largely by dues from its more than 200 member utilities—has pushed back on incentives in the Inflation Reduction Act for electric heat pumps, which are more energy efficient than traditional heating and therefore could bring customers’ bills, and emissions, down. The AGA has also used various means to block bans on new gas hook-ups and advocate for additional fossil fuel infrastructure. An study by the Energy and Policy Institute found that front groups for utilities—with anodyne names like Seniors Across America and New Yorkers for Affordable Energy—spent $2.4 million over the last four years on social media ads, many of which attacked climate bills. Among the biggest spenders EPI analyzed was the 501(c)(4) Natural Allies for Clean Energy, a group with close links to Duke Energy and Southern Company. For The Guardian and its nonprofit partner Floodlight, Taylor Kate Brown reported that the group took a particular interest in young voters of color in making the case for the Williams Companies’ pipeline project from New Jersey to Queens. “Success for the natural gas industry will be rooted in whether we can message to the left and the Democratic base of Black and Latino and age 18-34 voters as effectively as we have messaged to the right,” one early planning document stated.
There’s been some interest in cracking down on utilities’ practice of making ratepayers subsidize their advocacy. A Notice of Inquiry issued last year by the Federal Energy Regulatory Commission, or FERC, set out to investigate how it could protect ratepayers from financing industry groups, and the Center for Biological Diversity submitted a petition to FERC in March arguing that customers have a First Amendment right not to fund advocacy through their bills. For now, though, millions of ratepayers are stuck paying higher prices and paying for their utilities’ elaborate efforts to keep them hooked on gas.