MINNEAPOLIS (WCCO) — The Department of Energy released its winter fuel outlook and found homeowners with natural gas can expect increases in their heating bills of more than 10 percent.

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Homes with natural gas heat will pay about $679 – that’s 13 percent higher than a year ago, but it’s still lower than the average for the past five winter seasons.

“We’re simply not seeing that large of an increase for our Minnesota customers,” said CenterPoint Energy spokesperson Rebecca Virden.

She say’s Minnesota’s estimated increase will be closer to 5 percent.

Both CenterPoint Energy and Xcel Energy report similar numbers for this winter fuel outlook.

According to CenterPoint, part of the 5 percent increase is due to a Public Utilities Commission approved rate increase that went into effect Oct. 1. Other reasons have to do with the changes in the historically-low priced market for natural gas.

“The reason for that is we’re seeing supply and demand equal out a little bit more, whereas we had supply in storage a little higher last year,” Virden said.

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Senior markets energy analyst Alan Lammey with the Oil Pricing Information Service says part of the reason Minnesota’s increase isn’t as large compared to the national average is because we’re good at dealing with cold winters.

“You’re more efficient, there’s more infrastructure there, there’s not as much competition for fuel,” he said.

The Energy Information Administration predicts residential natural gas prices to be higher this winter compared to last.

Lammey says that’s natural gas drilling dropped off when the prices got to historically low levels.

“What we’re seeing is a huge pullback in dry natural gas drilling, and what you’re seeing is that amount of production is beginning to come off,” he said.

Both Lammey and Virden point to higher demand for higher natural gas prices.

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“There’s much larger incremental demand for natural gas that has been built up over the last year and much more coming down the pike,” he said.

Heather Brown