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Wisconsin home heating costs expected to soar; natural gas sees biggest spike, though still cheapest

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Brandon Reed, with All Comfort Services, installs a two-stage Lennox high-efficiency gas furnace in October 2021. Home heating prices are expected to increase by more than 17% this winter, marking a second straight year of double-digit increases. 

For a second year in a row, Wisconsin residents will likely spend hundreds of dollars more to heat their homes thanks to skyrocketing fuel prices.

The National Energy Assistance Directors Association estimates it will cost more than $1,200 to heat an average home this winter, an increase of more than 17% compared to last winter.

This marks the second straight year of double-digit increases, with NEADA expecting the average heating bill this winter will be more than 35% higher than just two years ago.

Natural gas, the most common home heating fuel in Wisconsin, will see the biggest increase, though it remains the cheapest source of heat.

NEADA estimates it will cost about $950 to heat an average American home this year with gas — an increase of nearly $380 compared to two winters ago.

WEC Energy Group estimates the average household will spend an additional $120 to $180 on heating this season, assuming normal weather conditions. Madison Gas and Electric and Xcel Energy project increases of up to $200.

Alliant Energy has not released bill projections.

Ade Allen, a gas market analyst with Rystad Energy, said sweltering summer temperatures created rising demand for gas even as U.S. producers were exporting more gas in response to Europe’s gas shortage.

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With supply lagging and storage levels below average, Allen said high prices are likely to stick around for the winter, though mild weather could soften demand.

Unlike the equipment monopoly utilities use to deliver energy, fuel is an unregulated pass-through charge. Utilities don’t earn a profit on the gas they sell or burn to generate electricity, but when the price goes up, those costs are passed on to customers.

“We can’t control the commodity price of natural gas,” said Tom Content, executive director of the Citizens Utility Board, which is focused on limiting electricity rates. “But it is distressing that it’s at these elevated levels.”

Financial help is available from Wisconsin’s Home Energy Assistance Program (WHEAP) for households earning less than 60% of the state median, which works out to just under $52,000 for a family of three. Help is also available from the nonprofit Keep Wisconsin Warm/Cool Fund.

Still, NEADA executive director Mark Wolfe worries the additional $22 billion Americans will spend on heating this winter will hit low-income households the hardest, putting them at increased risk of falling behind on their utility bills. NEADA has asked leaders in Congress to authorize an additional $5 billion for energy assistance.

While fuel costs aren’t in their control, customers can take steps to cut their heating costs and make their homes more comfortable.

“It’s not the windows,” said Chad Laibly, a senior technical advisor for Focus on Energy, Wisconsin’s ratepayer-funded energy efficiency program. “It’s air sealing the attic and the basement. That’s where your money goes.”

Focus on Energy offers rebates of up to $1,250 on the cost of insulation and sealing, with additional incentives for those who earn less than 80% of the median income, which works out to about $80,000 a year for a family of four.

Laibly also recommends some simple improvements that don’t require a contractor, such as upgrading dryer vents to stop cold air from entering the basement or simply turning off the coffee pot once it’s done brewing.

“That’s a huge draw. When my coffee’s done I flip the switch,” Laibly said. “It dropped my bill right away.”

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