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Meredith GeraghtyMeredith Geraghty

Marketing and Outreach Intern, Department of Energy Resources (DOER), 

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A recent post in Energy Smarts highlighted several ways that Massachusetts residents can lower their heating energy use. And as the temperature drops and heating bills rise, that advice becomes ever more appealing.

Heating fuel priceDue to a combination of anticipated cooler weather and rising oil prices, the U.S. Energy Information Agency (EIA) has predicted that this heating season will be the most expensive on record for those residents who use heating oil to warm their homes. If you look at recent pricing data for Massachusetts, it’s easy to see that heating oil prices have gone up over the past few years in comparison with natural gas prices, which have actually dropped.

But natural gas is not available to everyone in the Commonwealth. (Check with your local utility.)

So, as a consumer looking at these trends and continuing to empty my wallet, I want to know exactly what I am paying for. Here’s what I found out. The utilities act as distributors of natural gas and electricity that they purchase from generators. These purchasing costs show up as the “generation” portion of our utility bills. There is a separate price for getting the electricity or natural gas delivered to your home. On your bill, it will say “transmission and distribution” for electricity and “delivery” charges for natural gas. Consumers purchase heating oil from independent distributors and just see a single cost, the price per gallon.

While natural gas rates are regulated (by the Massachusetts Department of Public Utilities), heating oil and propane are market based products whose prices are not regulated by the state. The Massachusetts Department of Energy Resources conducts weekly price surveys of these fuels as part of its participation in the State Heating Oil and Propane Program (SHOPP) sponsored by the EIA. The cost of importing these fuels into our great (but currently really chilly) state is factored into the prices of heating oil and propane.

Heating pie chartIn communities where it is available, many households have converted to natural gas, in part as a
consequence of rising oil prices. According to the 2010 U.S. Census in Massachusetts, gas is now used by 50% of households, marking a gradual shift over the past 30 years from heating oil as the primary heating fuel. Heating oil made up 54% of household heating in 1980.

But no matter whether you use electricity for heat, or oil, gas or another fuel, chances are that you’d like to spend less. To achieve that, energy efficiency is the name of the game to generate ”green” benefits: less green from your wallet and fewer greenhouse gas emissions into our air.

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