In New England, Low Heating Oil Prices Buy Some Time

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David Sharp

PORTLAND, Maine (AP) — New England is getting another break on heating oil prices this winter, with potential savings of hundreds of dollars per customer, providing breathing room for a region with some of the nation’s highest energy costs. But some officials worry lower prices will lead to complacency on efforts to improve efficiency.

Low oil and propane prices already have made it more difficult for gas distribution companies that are trying to expand their service areas in the region. Sales of energy-efficient automated pellet furnaces also have flagged because of lower oil prices.

“It’s been a slow year for getting residential customers to convert,” said Peter Bottomley, of Maine Natural Gas, which expects customer growth this year of 4 percent, compared with 15 percent the year before. “Residential homeowners are willing to wait until the moment when they can see instant savings.”

Oil prices cratered late last winter, providing an unexpected windfall of hundreds of millions of dollars to energy consumers in New England, where the number of homes using heating oil ranges from 32% in Massachusetts to nearly 70% in Maine, the state that’s most dependent on heating oil.

The trend is expected to continue this winter, putting even more money in people’s pocketbooks and smoothing over price spikes caused by inadequate natural gas pipeline capacity in New England, officials say. The latest Maine survey put the average heating oil price at close to $2 per gallon, about 50 cents lower than the same time a year ago.

A combination of lower energy prices and a forecast for a warmer winter will mean savings of 18 percent for propane users and 25% for heating oil users over last winter, according to the Energy Information Administration.

That’s music to the ears of John Reinhardt, who runs a bed and breakfast in a 139-year-old Victorian-style home in Wiscasset.

Last year, Reinhardt saved $1,500 to $2,000 through a combination of lower oil prices, use of wood for supplemental heat and keeping the thermostat at 58 or 60 degrees. This year, he’s hoping for savings of up to an additional $1,000.

“I know that if I do the same thing this year that I did last year, then I should rack up more savings in oil,” Reinhardt said. “I think it’ll be another good year.”

Lower energy costs aren’t keeping all consumers from making changes.

Installation of home solar projects, for example, has not slowed down this year, said Phil Coupe, co-founder of Re-Vision Energy, the largest installer of home solar systems in Maine and New Hampshire.

But there are concerns about complacency.

Back when heating oil cost $3.50 per gallon a few years ago, heating oil users were scrambling to switch to natural gas, Bottomley said. If they wait until heating oil prices spike again, then the flood of customers seeking to switch could overwhelm suppliers, he said.

Looking to the future, New England governors are working to boost natural gas capacity to avoid energy spikes caused by shortages during times of peak demand, requiring the use of older, costly plants that use kerosene and heating oil as fuel sources.

That becomes even more important with news that Pilgrim Nuclear Power Station will close by June 2019, reducing the region’s electric supply by 680 megawatts. It’s assumed that natural gas-powered plants will fill the gap, since wind power and solar can’t make the difference, officials say.

Five New England states have agreed that electric utilities can help fund natural gas pipelines, potentially providing more money for future infrastructure investments. And Massachusetts, Connecticut and Rhode Island are all preparing to submit a request for proposal for renewable energy that’s expected to bring Canadian hydropower into the region, officials said.

All that is in the future.

As for the here and now, Reinhardt is circumspect. Maine remains heavily reliant on heating oil because of a weak natural gas distribution infrastructure, and he knows world events or a change in weather could cause unanticipated price spikes.

“I have no control over the oil,” Reinhardt said. “The people here in Maine just have to deal with what we’re given.”


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