Consumers can expect their energy bills to jump in the next billing cycle and even months down the road as a major winter storm brews across the country.
The National Weather Service said “widespread heavy snow, sleet, and freezing rain” are expected in a large part of the country starting Friday and carrying through the weekend.
Disruptive winter weather, like what many U.S. households are about to experience, can send bills immediately jumping because of surges in demand.
“Everybody is racing to their thermostat to crank up the heat all at once — there’s just a tremendous demand pull that happens,” said Eli Rubin, a senior energy analyst at EBW AnalyticsGroup.
In the short term, households’ prices will spike for both natural gas and electricity because of an increase in usage, he said, but electric heating is likely to experience a larger surge in demand because “electric heaters are not as efficient as gas heaters.”
“They’re typically designed for regions like the Southeast that do not see the same sustained prolonged cold as, say, Minnesota,” Rubin said. “And so when we do get these severe cold spikes in those regions, the total amount of demand can absolutely skyrocket as a result.”
A storm of this anticipated magnitude can also cause long-term increases in consumers’ energy bills.
Natural gas prices have been soaring in the days leading up to the forecast winter storm, and they have risen about 63% since Monday, the most since December.
But residential households won’t feel the price hikes immediately. Instead, the increases will gradually trickle down into their energy bills.
“What happens with these huge price increases is that they’re absorbed slowly,” Rubin said. “State regulatory commissions and your local utilities are not going to suddenly double the rate you’re paying for natural gas overnight — but you will be paying. They’re going to phase it in over time.”
Consumers who heat their homes with electricity will see a similar impact on their long-term bills, he said, adding that the longer-term price increases for both heating sources could take six months to a year, or even longer, to show up in utility bills.
Increased electricity demand has already been on the rise because of the expansion of artificial intelligence data centers in the U.S., which consume large quantities of energy and have affected residential energy bills.
As for natural gas, Henry Hofmann, a co-portfolio manager of the Catalyst Energy Infrastructure Fund, wrote in an email to NBC News that “inventories are ok currently, but the combination of freeze-offs and increased heating demand should cause a significant draw in the weeks ahead.”
Freezing temperatures can cause equipment used in natural gas production and transportation not to work properly, or at all, as well as lead to power outages causing what is referred to as “freeze-offs,” according to the U.S. Energy Information Administration.
“We’d also expect some gas to be diverted from LNG facilities in the short-term to help balance the market,” Hofmann added, referring to liquefied natural gas.
EIA projected in its Short-Term Energy Outlook released Jan. 13 that natural gas costs will go down this year but rise in 2027 because of “growth in demand—led by expanding liquefied natural gas exports and more natural gas consumption in the electric power sector—will outpace production growth.”
Rubin said: “So we have some of these supply-side impacts that reduce supply at the same time we have demand surging. That creates a tremendous bullish impact on price.”
