What Is the Cause of the Rise in Energy Prices?

Learn about how energy prices are determined

rising energy prices new yorkYou have probably noticed that prices for everything have been going up in recent months. Groceries, gas for the car, clothing, household supplies, just about every time you buy something, you’re spending more.

Unfortunately, it looks like energy prices are heading in that direction as well as the heating season gets closer here in Western New York.

Gasoline prices have risen by more than $1 per gallon from a year ago. Natural gas prices have increased by more than 150%. Crude oil prices have surpassed $80 per barrel, levels not seen in seven years. Propane prices are at their highest since 2014. The cost of electricity is heading up as well, thanks to the industry’s heavy reliance on power plants fueled by natural gas.

At NOCO, we know these price increases can present challenges for you. It’s hard for us, too. We’re doing everything we can to minimize these increases.

What’s behind the energy price increase?

The reason for energy prices going up usually isn’t just one single thing. Because most energy is based on commodities such as crude oil, everything from weather to geopolitical issues affect energy prices.

One factor is the reduction of drilling for oil and natural gas, as the recent push for electrification in home heating has been getting attention. The misguided electrification effort, which can dramatically increase home heating costs while reducing heating efficiency and comfort, stems from the erroneous belief that electricity is somehow better when it comes to fighting climate change.

Because of less drilling, supply is lower as demand increases for the heating season here in the U.S. Reduced amounts of natural gas not only drive up the cost of electricity production, but the price of propane, as well as much of the nation’s propane, comes from natural gas processing.

Minimize the fiscal pain

There are things you can do now to cut your heating costs this coming winter. Energy efficiency experts say the best investment is adding insulation to your home, especially in the attic, where 65% of heat loss occurs.

How much insulation do you need to add? It depends on how much, if any, is already in your attic. It also depends on where you live in the area. Some parts of our service area are Zone 5, others are Zone 6. The zones also determine the amount of insulation you need.

Preventing heat loss through drafts can help cut your heating costs by up to 20%. Most of that heat loss occurs around doors and windows, as well as exterior walls. Using caulk, weatherstripping, door sweeps, and expanding foam can help seal up those drafts and keep your heated air inside your home, reducing how often your heat has to kick on.

NOCO is here to help you manage your energy costs. Contact us with any questions you have.