Minnesotans should anticipate higher heating costs this winter 

Published October 23, 2024 

According to two organizations that have released winter energy cost predictions, Midwesterners should anticipate higher costs this heating season. In this article, we’ll share the drivers behind these predictions and some tips for your household to cut winter costs while staying comfortable. 

Colder forecast to spur higher heating costs 

The cost of winter heating is affected by both fuel prices and temperature. This winter retail energy costs are anticipated to be similar to last year’s prices. However, after a mild winter in 2023/2024, temperatures are expected to be colder this year, leading to higher heating costs. Even if fuel costs per unit remain similar to last winter, colder temperatures require more fuel use in homes to maintain comfortable living conditions.  

 The nonprofit National Energy Assistance Directors Association (NEADA) predicts home heating costs in the Midwest will increase an average of 14 percent, most of which is accounted for by a 13 percent increase in the estimated number of Heating Degree Days (HDDs), a measure of cold temperatures over time. Similarly, the Energy Information Association (EIA), a federal body that collects energy data, predicts Midwest heating costs will increase between 2 and 11 percent. Minnesotans who heat with propane and fuel oil continue to face the highest overall heating energy costs.  

Upcoming utility rate increases 

Upcoming rate cases for both CenterPoint, the largest gas utility in Minnesota, and Xcel Energy, the largest electric utility in Minnesota is expected to lead to higher prices for gas and electricity, respectively. The Minnesota Public Utilities Commission must approve these rate increases, and CUB is intervening in both proceedings to argue against the hikes. 

Preparing your home for winter 

Most Minnesotans see their highest energy bills in the winter, so fall is an ideal time to take a few steps to prepare your home for winter. 

 Quick steps for energy efficiency  

• Get your heating system serviced each fall to ensure it is working properly and efficiently, and replace furnace air filters as needed. The technician servicing your system can provide advice about how often to replace filters.  
• Cover up or seal air leaks. Properly weatherizing your home can reduce the amount of energy needed to keep your home at comfortable temperatures. During the winter, a well-weatherized home will keep warm air in and cool air out. The U.S. Department of Energy has helpful DIY tips to tackling energy-saving weatherization projects. Using plastic film on leaky windows is an easy temporary fix, and door draft stoppers can help prevent heat from escaping under doors.  
• Inspect and clean your fireplace. If you use a wood fireplace, it’s important to make sure all components are clean and safe to use. Close fireplace dampers when you are not using them to prevent heat from escaping. 
• Redirect ceiling fans. Switch the rotation of ceiling fans to clockwise and operate them at a slow rate to circulate warm air down from the ceiling. 
• If you are struggling to keep up with energy bills, determine if you qualify for Energy Assistance and utility affordability programs.  

Long-term improvements

• Consider a home energy audit. This is when an energy professional visits your home to check for air leaks, insulation needs, and health and safety issues. Implement insulation, air sealing, and other weatherization measures recommended in an audit. Energy audits also qualify for a 30 percent tax credit and many cities have discounts or cover the cost.  
• If you receive Energy Assistance, request a free home energy audit and weatherization improvements through the Weatherization Assistance Program. These services can permanently reduce home energy costs by up to 30 percent.  
• Consider an air source heat pump. In homes heated with propane, fuel oil, or traditional electric resistance systems, in particular, heat pumps will likely reduce heating costs. Air source heat pumps still rely on secondary heating systems in very cold temperatures, but they can save homeowners a considerable amount in energy costs by providing efficient heating in most conditions (and they add very efficient cooling in the summer).   

Tax credits and discounts available for many efficiency measures from the IRS, Minnesota utilities, and some local governments can offset the cost of audits and upgrades by thousands of dollars. Check to see what's available to you, or contact us for help navigating these resources.