Dec 22, 2025
A colder-than-normal winter may be coming for the U.S. — and not because of the weather.
The latest data from the National Energy Assistance Directors Association shows that heating costs are expected to rise across the board this year, with average electricity spending projected to increase from $1,093 last winter to $1,205 this winter, a jump of over 10%.
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Higher natural gas costs are also edging up consumer bills, with the report projecting an increase from $639 to $693 for the season (heating oil and propane, by contrast, are expected to decrease in cost due to increases in supply).
With consumers already struggling to afford essentials like groceries and health care, this latest news isn’t especially cheering. Here’s what you can do to mitigate the costs and keep your heating bill as low as possible this winter.
The economic outlook in the US
This news is just the latest blow for American wallets, as increasing costs have put pressure on budgets for the last several years. Energy prices are increasing due to factors like increased costs for upgrading distribution systems. Another issue is the construction of the large data centers required to run AI technology, which require massive amounts of water and electricity and can put upward pressure on energy prices (1).
MarketWatch reports that energy costs in New Jersey rose 21% and Virginia surged 13%, respectively, for these reasons (2).
“Those states face a perfect storm of rising costs for natural gas and equipment, expensive grid updates and power-hungry artificial-intelligence data centers. As a result, middle-income households that have traditionally been unbothered by utility costs are starting to feel the pain,” the article states.
Overall costs for American households paints a bleak picture. According to data from the Bureau of Labor Statistics, the Consumer Price Index went up 2.9% between August 2024 and August 2025, driven largely by increases in food prices, which were up 3.2% in that time period (3).
The Center for Microeconomic Data also reports that household debt increased by $197 billion in the third quarter of 2025, reaching a total $18.59 trillion. Credit card debt is also on the increase, with the total balance nationally up by $24 billion in just a single quarter (4).
The outlook for jobs is also wobbly, with the unemployment rate hitting 4.3%, the highest level since 2021 (5).
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With belt-tightening as the order of the day, many Americans will be looking for ways to reduce their utilities bill this winter. There are a number of short-term and long-term measures that all households can undertake in the name of better energy efficiency.
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Coping with rising energy costs
The National Energy Assistance Directors Association reported that around one in six U.S. households are already behind on their utility bills before the winter even begins (1). With this in mind, it’s critical that you take steps in your own home to get ready for cooler winter temperatures.
First, consider the small steps. These quick changes can add up to big savings on your bills:
*Install weatherstripping: Sealing gaps around your doors and windows takes just a few minutes and the cost is very low, but it adds up to big savings on your bill. *Program or adjust your thermostat: Reducing the temperature when you’re sleeping away or from home can make a big difference to your heating costs. *Use LED bulbs: Making the switch to energy efficient bulbs saves on your electricity bill — plus, the bulbs last longer than incandescent. *Unplug devices: Chargers, devices and small appliances use power even when you’re not using them. Unplug them or invest in some smart power strips that cut phantom load automatically. *Check your company’s off-peak hours: Many utility providers offer lower rates during off-peak hours. Opt to use energy-intensive appliances like dishwashers and washing machines during those times (6).
There are also some larger investments you can make in ensuring your home is more energy-efficient. These can include:
*Adding insulation: Your home loses most of its heat through the attic, so it’s important to seal it properly. Your state or utility company may offer rebates for installation. *Invest in solar panels: Whether you install your own or buy into community solar for credits on your bill, solar panels can help you to cut costs in the long run. *Consider a heat pump: While they cost thousands up front, heat pumps are an energy-efficient alternative to conventional furnaces or boilers, and function as space heaters during winter and air conditioners in the warmer months (7). *Get tax credits: The Energy Efficient Home Improvement Credit (8) and the Residential Clean Energy Credit (9) can save you thousands of dollars for switching to clean energy solutions for your home.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
National Energy Assistance Directors Association (1); MarketWatch (2); Bureau of Labor Statistics (3); Federal Reserve (4); CNN (5); The Invading Sea (6); This Old House (7); IRS (8); IRS (9)
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Rebecca Holland is dedicated to creating clear, accessible advice for readers navigating the complexities of money management, investing and financial planning. Her work has been featured in respected publications including the Financial Post, The Globe & Mail, and the Edmonton Journal.
