Feds predict costly home heating season

Get ready for an even more expensive winter.

The U.S. Department of Energy predicts the most expensive heating season ever for homeowners who heat with oil -- a category including about two-thirds of Long Islanders -- although weather forecasters think it will be a bit milder than last year.

Making the season harsher, it also appears there will be less federal money available to help struggling homeowners pay their bills.

The department predicts nationwide heating oil bills will average 8 percent more than last winter, while natural gas bills will be 4 percent higher and electricity costs will be flat.

Last winter, Long Islanders paid an average of between $3.099 a gallon for fuel oil when the heating season began in October, and $4.24 at the season's end in early April, according to the state Energy Research and Development Authority. On Monday, oil averaged $3.887 a gallon at full-service dealers on Long Island, almost 79 cents a gallon, or 25 percent, pricier than a year ago. Oil prices typically fluctuate during the heating season.

At $3.887 a gallon, filling a 275-gallon tank from empty costs $1,069. The Oil Heat Institute of Long Island said the average home uses about 900 gallons a year.

In Northport, fuel oil dealer Pete Engelmann of Engelmann Energy, sympathizes with homeowners. "Energy costs rival property taxes now in some homes," he said.

But rising prices have also been tough for retailers, he said, because more customers are late with payments and his suppliers are tightening up on billing, withdrawing payments directly from his account as soon as he takes delivery. "The higher the price goes," he said, " . . . the more difficult it is for us to make our payments to keep the fuel flowing."

Heating oil prices are so much higher than a year ago because, for logistical reasons, most of the heating oil refined for East Coast homeowners is produced from expensive European or West Africa crudes, which were trading Thursday at about $111 a barrel, or about 23 percent higher than a year ago, said Tom Kloza, chief oil analyst of the Oil Price Information Service in Wall, N.J.

Higher heating oil prices are expected once again to strain programs intended to help homeowners keep warm -- including the federally funded Low Income Home Energy Assistance Program and Project Warmth, operated by the private United Way of Long Island.

"We just expect to be absolutely flooded with requests," says Mike Cooney, who oversees Project Warmth. It is funded by donations, which totaled $625,000 last winter and helped 1,398 families, he said.

Sen. Charles Schumer (D-N.Y.), said proposed legislation in the House of Representatives would reduce New York State's share of the $3.4 billion budgeted for this winter for the low-income energy program. He said the program benefited 63,078 households on Long Island last winter. "This is exactly the wrong time to change the rules of the game," Schumer said in a statement.

Natural gas is a relative bargain, costing the equivalent of oil at about $2.30 a gallon, as calculated by the Oil Heat Institute and National Grid Plc., the Island's major supplier of natural gas. Despite the energy department's prediction of slightly higher natural gas bills, National Grid said it expects customers' costs to be about 5 percent lower this winter.

The gas utility said about 5,900 homes were converted from oil to gas heat during the company's last fiscal year, from April 2010 to March 2011 -- about 1,000 more than the previous year. It can cost $6,500 or more to convert.