Americans will dish out more money to heat their homes this winter as electricity and natural gas costs continue to soar.
That’s according to a new study from the National Energy Assistance Directors Association (NEADA) which predicts that Americans will see their energy bill rise 7.6% to $976 on average this cold weather season. Those who rely on natural gas to heat their home could see an 8.4% jump in their bill, while those who use electricity could see a 10.2% increase.
While electricity prices vary by state, overall the cost is rising. In August, prices increased by 6.2% compared with the same month last year, according to the latest inflation data from the Bureau of Labor Statistics.
Those costs will continue to escalate as much as 18% in the next few years, according to a May report from The U.S. Energy Information Administration.
Natural gas prices are up 13.8% from last year, far outpacing the rate of inflation, which rose 2.9% in August on an annual basis.
Not all Americans will see an increase in their winter energy bills. Heating oil and propane users — roughly only 10% of U.S. households — could see their energy bills decrease by 4% and 5% respectively.
The overall rising home-heating costs follow greater summer air-conditioning use, amid warmer temperatures. “The average summer household electricity bill reached an estimated $776 in 2025, the highest in at least 12 years compounding household strain,” the report states.
“We had a period of relatively stable electric bills and then last year electricity went up twice the rate of inflation,” Mark Wolfe, executive director of NEADA, told CBS MoneyWatch.
As a result, more American households are falling behind on their energy bills.
Since Dec. 31, 2023, energy arrearages — unpaid energy bills that homeowners owe to their utility company — have risen by about 31%, from approximately $17.5 billion to $23.0 billion by June 30, 2025, NEADA said in its report.
The surge in energy arrearages comes as Americans are carrying record amounts of debt. With inflation continuing to ramp up the cost of daily living, ahead of wages, total household debt reached $18.39 trillion in the second quarter of 2025, with unpaid credit card balances exceeding $1.21 trillion.
Why are energy prices rising?
The main factors driving up energy prices is the ongoing high cost of maintaining and upgrading the grid, along with rising natural gas prices and increasing electricity demand from data centers according to the NEADA report.
“As demand goes up and supply is not matching that, prices are going to go up,” Abe Scarr, director of the Energy and Utilities Program at the Public Interest Research Group (PIRG), told CBS MoneyWatch
Russia’s invasion of Ukraine also created volatility in energy prices, government data shows.
So far this year, approximately 60 utility companies have either increased electricity and gas prices or proposed further increases, according to the Center for American Progress, a Washington D.C.-based think tank. With more rate hikes on the horizon, American households will have to try to stretch their income even further.
“Families just finished paying their high electric bills for the summer, and now they’re looking at high bills for the winter,” Wolfe said.
How to lower your utility bills
As winter approaches, what can Americans do to lower their utility bill?
Scarr suggests that people check with their utility companies, which often offer incentive programs to help customers implement cost-saving measures. Offerings vary by utility, but many companies provide free home energy assessments and discounts for people who want to insulate their homes.
For those interested in fortifying the envelope of their home to minimize heat loss, options include hiring a contractor for a professional retrofit or, for straightforward insulation projects, DIY tips, he said.
When it comes to general energy conservation, experts suggest unplugging small appliances or electronics when you’re not using them. While it might seem obvious, people can also turn down the temperature in the home a few degrees to save money, said Scarr.
The Low Income Home Energy Assistance Program (LIHEAP), a federally funded initiative with a network of state-run programs, is another resource. LIHEAP provides financial assistance to help eligible low-income households cover energy costs.
