NEADA: Cost of Home Heating This Winter to Rise 9.2%

U.S. home heating costs are expected to rise 9.2% this winter, more than three times the rate of inflation, driven by higher electricity and natural gas prices and colder-than-average weather, according to a mid-winter analysis released this month by the National Energy Assistance Directors Association.
 
The average household is projected to spend $995 on heating this winter, up $84 from last year. Households that rely on electric heat are expected to see the largest increases, with costs rising 12.2%, while those using natural gas are projected to see an 8.4% increase. Heating oil and propane costs are expected to remain roughly flat, as lower fuel prices offset higher usage.

Electricity prices have risen significantly faster than inflation since 2021, according to data from the U.S. Energy Information Administration. The average monthly residential electricity bill increased from about $121 in 2021 to $156 in 2025, a rise of nearly 30%. Electricity bills rose 12.7% between January and October 2025.

Several factors are contributing to higher electricity prices nationwide, including higher interest rates that raise the cost of financing power plants and transmission projects, rising natural gas prices, growing demand from data centers, aging grid infrastructure and regional capacity constraints.

Natural gas prices have increased rapidly over the past year, driven in part by the expansion of liquefied natural gas (LNG) exports that increasingly link U.S. prices to global markets. The Energy Information Administration estimates that LNG and pipeline exports now account for about 25% of U.S. natural gas production, with export volumes expected to continue growing. Natural gas fuels about 40% of U.S. electricity generation and provides heat for roughly 46% of households.

Financial strain among households is increasing. About one in six U.S. households is behind on utility bills, owing a combined $23 billion to electric and gas utilities. NEADA estimates that up to four million households experienced utility disconnections in 2025, nearly 500,000 more than in 2024.

Although $3.7 billion in federal heating assistance funding was released late last year, rising prices and colder weather have reduced its effectiveness. Only about 17% of eligible households receive assistance, and total funding has declined from $6.1 billion in 2023 to about $4 billion in 2025.