Energy costs predicted to rise over last winter

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(Host) The Energy Department has issued a report saying the cost of keeping warm this winter could increase up to 45% from last year. But there’s some debate over the actual impact on consumers.

VPR’s Neal Charnoff reports:

(Charnoff) The Energy Information Administration says that consumers could pay $100 to $300 more to heat their homes this winter. The administration points to expected colder weather and higher fuel prices as contributing to the increase.

But some experts say that those figures could be misleading. Shane Sweet is Executive Director of the Vermont Oil-Heat Institute.

(Sweet) “Although that’s the headline, they’re not really making clear that, sure it’s gonna be higher because last year we had the warmest winter on record, and prices were pretty low last year. So if you have a normal winter with normal demand, yeah it makes sense it’s gonna be higher than last year. It’s not that there’s anything extraordinary happening in the market, unless you consider a normal winter to be something that’s extraordinary.”

(Charnoff) According to Sweet, consumers are more protected from high fuel prices than they were just a decade ago.

(Sweet) “A lot of the heating oil and propane markets at the consumer level nowadays are in some sort of price protection program where they’ve entered into either a pre-pay or a budget or a cap program with their retail fuel supplier. And it varies by market certainly, but I know of some markets where 80% of the people in the market are in some sort of program. I mean, that was unheard of 10 years ago.”

(Charnoff) Steve Costello is director of public affairs for Central Vermont Public Service. He says there is still reason for low-income Vermonters to be concerned about higher fuel prices. Costello agrees that fuel prices last year were abnormally low. But he says a second factor to consider is the apparent reduction expected in federal assistance to the states:

(Costello) “Right now the budget that’s on the table includes an 18% reduction compared to last year’s budget for federal fuel assistance. And when you combine those two things there is expected to be a significant impact on low-income Vermonters.”

(Charnoff) Costello says that some low-income residents are already in need of fuel assistance, but federal funds are not available until November 25. One remedy is the Shareheat program, which is run by CVPS.

(Costello) “Shareheat is a 15-year old program at CVPS where we collect general donations from other businesses, from church groups, social service organizations and the like, and then our shareholders match them dollar for dollar up to $50,000 this year. And we then turn that money over to five community action agencies that hand it out statewide in emergency fuel situations.”

(Charnoff) Costello recommends that consumers go to their local community action agency to learn more about receiving fuel assistance.

Costello and Sweet agree that instability in the Middle East and the potential for war in Iraq could contribute to temporary spikes in the fuel market.

For Vermont Public Radio, I’m Neal Charnoff.

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