Overnight lows are expected to dip into the low 30s this weekend — a chilling reminder that another New England winter will soon be here.
This season could be especially bitter for home heating oil customers, because even as the mercury continues to drop, oil prices continue to rise. According to the U.S. Energy Information Administration’s (EIA) October 2011 Short-Term Energy and Winter Fuels Outlook, residential heating oil prices are expected to set a new winter record, averaging $3.71 per gallon, an increase of 10 percent over last winter.
With fuel prices constantly fluctuating, even heating oil providers are often left guessing.
“As far as price, I wish I knew the answer to the question,” said Brian LaPointe, president of Federal Heating, which serves customers in Lexington and throughout Greater Boston. “You just don’t know what’s happening, with the commodity market and the speculators on Wall Street.”
LaPointe said he is concerned for his customers and his business, especially in these trying economic times.
“From our standpoint, it’s just as bad for us as it is for the homeowner,” said LaPointe, whose family has been operating Federal Heating out of Winchester since 1951. “It is a necessity so you try to be as nice as you can be and still stay in business, because you understand. All the people who work for me, they’re struggling just like everybody else.”
Heating oil prices largely reflect crude oil prices, according to the EIA, which are vulnerable to external forces that can disrupt production, such as natural disasters and political turmoil.
Following the death of deposed Libyan dictator Moammar Gadhafi on Oct. 20, LaPointe is hoping more stability in the oil-rich North African nation could lead to more stability in oil prices.
“Once they get their infrastructure straightened out, we’ll hopefully see a reduction in prices,” he said. “But then again, who knows? … The price is going up as we speak.”
While the average cost of home heating oil in the Northeast has more than doubled over the last seven winters, the average cost of natural gas has only increased by 7 percent during that time, according to the EIA. Natural gas prices are expected to rise by 5 percent this winter, according to EIA projections, but would still be less than half of projected heating oil prices on average.
David Graves, a spokesman for National Grid, the sole natural gas provider in the area, said many homeowners are making theswitch to natural gas.
“It’s a multi-purpose fuel, and right now, the cost is lower,” Graves said.
According to the EIA, between the winters of 2003-04 and 2010-11, the number of Northeast households using natural gas heating increased by 651,000 (from 10.14 million to 10.80 million), while the number of households using heating oil fell by 1,197,000 (from 6.88 million to 5.68 million).
Graves said National Grid currently has 820,000 natural gas customers throughout Massachusetts, including 6,000 in Lexington. The company has seen a nearly 10.5 percent increase in natural gas customers across the state since 2010, according to Graves.
“It’s usually driven by cost. The last time we saw a significant number of conversions was 2009,” he said. “The reason for this being we have adequate supply and domestic reserves that are plentiful.”
He noted residents looking to make the switch must have a natural gas line within 100 feet of their home, which is fairly common throughout Lexington. They must also be prepared to pay thousands of dollars to convert their furnaces as well as other equipment they would like to switch, like propane lines or hot water boilers.
For consumers, it’s an upfront investment in exchange for long-term savings.
According to Town Manager Carl Valente, most of the municipal and school buildings in town are heated with natural gas. With the town’s current contract set to expire next fall, the town recently solicited bids for a new three-year contract to begin in October 2012, Valente reported to the Board of Selectmen on Monday, Oct. 24. Bids came in substantially lower, which Valente estimated would save the town approximately $280,000 per year over the life of the contract.
The town’s fuel assistance program, administered through the Human Services Department, helps eligible Lexington residents with the cost of heating their homes.
Assistant Director of Family/Human Services Emily Lavine said she understands why people may have difficulty paying their heating bills, which can add up to thousands of dollars over the span of a few months.
“We see [people from] all walks, all demographics, that are just in a difficult financial situation,” Lavine said.
Human Services Director Charlotte Rodgers said participation in the program has more than doubled in the last three years, with approximately 100 individuals and families expected to receive fuel assistance this winter.
“We’ve seen a steady increase that mirrors the national average,” Rodgers said. “That increase is very much linked to unemployment nationwide … For some, the program helps put food on the table.”
She added the Human Services Department has a variety of programs available to Lexingtonians in need, including emergency support for residents who suddenly lose heat in the middle of winter.
“The Human Services Department is kind of a one-stop shop,” she said. “By coming here, to a central location in town, and by working with social workers, we can find some other ways to help people, which is great.”
The key, Lavine said, is for people to ask for help when they need it.
“I think sometimes folks are just uncomfortable asking for help for a variety of reasons,” she said.
Applications for the fuel assistance program are accepted from Nov. 1, 2011 through April 30, 2012. For more information, call the Human Services Department at 781-861-0194.
Mark Sandeen, chairman of the Sustainable Lexington Committee, said the high price of fuel is a compelling argument for energy efficiency.
“The cost of energy is skyrocketing for our wallets, but also the cost of burning fossil fuels for our environment is huge,” said Sandeen, adding the lowest costing energy is the kind you don’t use.
According to research conducted by Sustainable Lexington, homes consume 45 percent of the town’s energy and about two-thirds of that energy is used to heat and cool homes
The committee recently took advantage of a program funded by the Massachusetts Department of Energy Resources and conducted by Sagewell, Inc. to analyze thermal images for more than half of the homes in Lexington. The top 20 percent of homes with the greatest potential for energy savings were sent postcards, giving homeowners the opportunity to download their home’s thermal images and a custom energy savings report.
“There’s more issues than you would think,” Sandeen said.
Sandeen said he is astonished by the savings he has been able to achieve.
“I saved 10 percent on bills. The biggest benefit though, I tell people, was the ‘wife happiness index,’” he joked.
Beyond the impact on individual households, Sandeen said participation in the energy savings programs is beneficial to the entire community.
“When you’re saving money that money stays in the town’s economy,” he said. “If you save a thousands dollars a year on an energy bill, instead of it going off to Saudi Arabia, that could stay here and go to the Lexington Farmers’ Market.”
Samantha Allen can be reached at 781-674-7722 or firstname.lastname@example.org.