Heating Prices Set to Increase This Winter
EIA Anticipates Increases in Natural Gas, Propane, and Electricity Heating Costs
While rising energy prices and cooler temperatures prompt Americans to reach for their overcoats and pocketbooks this winter, these conditions often spark smiles upon HVAC contractors’ faces as they prepare their crews for what appears to be a busy heating season.
Home Heating Bills
According to the U.S. Energy Information Administration (EIA), households heating with natural gas are expected to rise 14 percent this season, increasing average residential energy costs by $80 compared to last winter.
By region, the EIA predicts households heating with propane in the Midwest will spend an average of $120, or 9 percent, more this winter than last winter; residences in the Northeast are expected to spend an average of $206, or 11 percent, more. Similarly, households heating primarily with electricity can anticipate an $18, or 2 percent, increase on their bills this winter.
Some reprieve should come for those primarily using heating oil. The EIA expects those households to spend an average of $46, or 2 percent, less this winter, reflecting a 5 percent decrease in prices and a 3 percent increase in consumption.
Winter is Coming
While the winter of 2013-2014 will be remembered for its bitter cold temperatures across most of the country, the National Oceanic and Atmospheric Administration (NOAA) reports seasonal temperatures may not have been as cold as perceived. Temperatures observed in February across much of the northern and central contiguous U.S. registered 32.2?F, only 1.6? below the 20th century average. Officially, the NOAA recorded last season’s February temperatures as the 37th coldest ever.
Certified consulting meteorologist Chris Orr said the polar vortex will return this winter, and it may be more extreme than last year as El Niño factors into this winter’s weather patterns.
“Last winter’s polar vortex never really went away,” said Orr. “Summer temperatures continued to be cool across the eastern U.S. and Canada, and the hottest part of the summer only lasted a little while.
“The weather pattern indicates a cold winter is coming again this year,” he continued. “Temperatures will be chilly east of the Rocky Mountains with the coldest air blanketing the Northern Plains, Great Lakes, and the Northeast. There will be frequent surges of Arctic air that will be 30? colder than normal.”
Orr predicts the polar vortex and El Niño will affect the North and South very differently.
“El Niño is already affecting world weather patterns. It will bring large quantities of moisture to the southern U.S. this winter. The cloud cover and precipitation will hold back the temperatures. East of the Rockies, occasional pushes of Arctic air will add to the chill, and there is a possibility the southern Appalachians could even be a little cooler than I’m anticipating.”
Contractors are Prepared
All of this amounts to HVAC contractors again facing numerous challenges this winter, though many remain optimistic about the coming season.
“I am just hoping for cold weather with no precipitation,” said Travis Smith, owner of Sky Heating & Cooling, Portland, Oregon. “Our city shuts down with even 2 inches of snow, and it’s a little embarrassing when the rest of the country operates with 10 feet of snow. Because we only receive snow once every two to three years for one or two days, it’s hard to invest in snow tires and chains for such a short time.”
Rising gas and propane prices encourage homeowners to invest in more efficient units, which ultimately causes an increase in HVAC sales, said Mike Agugliaro, co-owner of Gold Medal Service, East Brunswick, New Jersey. “Most furnaces in existing homes are around 70-80 percent efficient, but now there are newer units that are 98 percent efficient. Many times, the more efficient units pay for themselves in cost savings on bills, and there are rebates and manufacturing savings that reduce costs even more,” he said. “Owners are more aware of the overall efficiency of their homes. In the past, most would just pay the gas bill and deal with the rising costs, but now, people are much more invested in the efficiency of the system and ductwork in their homes.”
When contractors try to build their businesses around the weather, they’re gambling on a losing chance, said Aaron York Sr., owner, York’s Quality Air, Indianapolis.
“Most likely, we will never meet our expectations,” he said. “Our businesses must be built on relationships with our customers whom we have taught the supreme importance of planned maintenance as opposed to breakdown maintenance.”
Customers are far better off investing their dollars in planned maintenance and assuring their HVAC equipment is always operating at peak efficiency, York added.
“Energy savings alone will more than exceed the cost of quality protective maintenance,” said York. “Utility companies have proven that clean-burning, well-maintained furnaces will save far more money each operating season than the cost of service. Continual maintenance actually puts more money in a customer’s pocket in the long run.”
Smith agreed, stating he attempts to sell a maintenance agreement at the end of every job.
“Our service department has been letting customers know that if they had maintenance performed, they either may not have had the breakdown, or we could have possibly found the issues prior to the cold snap. We’d rather take care of customer problems when we are slower. If they call when everyone calls, there’s a chance we may be booked out a week or two for service,” said Smith.
“We are the ‘weather makers’ for our customers,” said York. “We provide comfort by all means possible during the hot summer months, the cold winter months, and the moderate spring and fall. Customers demand and deserve a comfortable, clean, well-conditioned, and healthy environment wherever they work or live, and that is what this industry is all about. They want and demand it, and we are there to assure they get what they need and desire at a fair value.”
Publication date: 10/20/2014