John Fleming of Dedham fills gas tanks for his generator in preparation for an extended power outage due to a storm that brought heavy rain and gusty winds to the area in this April 2020 file photo. Credit: Linda Coan O'Kresik / BDN

Maine and the rest of New England are expected to have a warmer than usual winter, decreasing demand for electricity and natural gas, but fuel prices will be higher than last year, a recent federal forecast found.

The good news is the region should have adequate power generation to handle normal winter weather this season. However, it could face fuel shortfalls that will raise prices even higher if there is a long cold spell, according to the Federal Energy Regulatory Commission’s annual winter energy market and reliability assessment. The commission regulates the interstate transmission of electricity, natural gas and oil.

The news is mixed for many Mainers, especially those who struggle to afford fuel and keep their homes safe when temperatures drop. More than 60 percent of Maine homes rely on heating oil, higher than in any other state. Since last year, the Mills administration has provided $25 million to Efficiency Maine to help homeowners seal out the cold or convert to alternative heating sources.

There also is home heating assistance money available to low-income families in the state. Maine was awarded $42.5 million through the Department of Health and Human Services’ low-income home energy assistance program.

“With the average price of home heating oil currently a staggering $5.42 per gallon, it is going to be extraordinarily challenging for many Maine families to stay warm this winter,” said Sen. Susan Collins, R-Maine, who pushed to get the funding, which she announced Wednesday. “Given the sharp increase in energy prices this year, this funding will be essential to helping ensure that low-income families and seniors do not have to make the impossible choice between paying for heat and paying for food or medicine.” 

But broader economic factors are affecting energy prices in Maine and the region. New England is the only part of the U.S. to rely on imported liquefied natural gas for heat and to generate electricity. The region has not approved new pipeline projects in recent years, which in turn has caused it to import liquefied natural gas, adding a premium to the cost. Federal Energy Regulatory Commission Chairman Rich Glick has called the situation “not sustainable.”

Even with the warmer weather, natural gas prices for the upcoming winter are expected to rise this year. The Ukraine war is partly to blame, with Russia making retaliatory cuts to Europe’s gas supply. That puts New England in competition with Europe and Asia for a natural gas supply.

“In New England, generation capacity is adequate, but fuel constraints will continue to challenge the region in the winter,” Glick said.

FERC will update its report in late December. ISO New England, a regional transmission organization, also plans to release its annual forecast for New England in December. Because of New England’s heavy reliance on natural gas, ISO New England last winter warned of rolling power outages for the first time should a cold spell occur.

Maine’s governor’s energy office does not prepare its own winter forecast, but uses information from the Federal Energy Regulatory Commission, the Energy Information Agency and industry sources.

In its winter forecast, the EIA projected New England households would spend 4 percent more from October through March 2023 for propane, or $1,971 for the winter. Those heating primarily with electricity would spend 11 percent more, or $1,679.

The EIA had national numbers for heating oil and natural gas. U.S. residents are expected to pay 27 percent more for heating oil, or a total of $2,354, this winter compared to last. Those heating with natural gas are expected to see their bill rise 28 percent to $931.

“With winter heating season approaching, the governor’s energy office remains in communication with the federal government, state partners across the region, the fuel industry and other fuel suppliers to understand and address supply challenges and offer our assistance to fuel providers to secure additional supply,” a Maine governor’s energy office spokesperson said.