Home heating costs are expected to climb this winter, creating more concerns for energy affordability for households across the country. According to a report from the National Energy Assistance Directors Association (NEADA), average heating costs are projected to increase by 8.7 percent, while heating oil costs could rise by 31.3 percent, largely due to the war in Iran driving up heating oil prices. As concerns about energy affordability grow, heating bill assistance is getting increased attention as a way to help households manage rising energy costs and keep warm this winter. While the federal government is seeking to lower prices by getting more supply onto the market, states and utilities are trying to help customers manage higher energy costs through utility refunds and heating bill assistance. Read on for examples of how states are using these different approaches.
Tapping into Heating Oil Reserves
The U.S. Department of Energy (DOE) announced through a request for proposal on October 21, 2026, that it is making 315,000 barrels of heating oil available from the Northeast Home Heating Oil Reserve. The oil comes from storage sites in South Portland, Maine, Boston, Massachusetts, and New Haven, Connecticut. Companies receiving the oil must later return the same amount plus a premium. DOE says that this will help address supply shortages and mitigate higher home heating oil costs this winter. However, some have questioned whether this move would actually lower prices for households. A representative from the Connecticut Energy Marketers Association argued that the amount is too small to make a significant impact on prices, noting that the 315,000 barrels represent about 13.2 million gallons, compared with the 400 million to 500 million gallons of heating oil Connecticut uses annually.
Utility Refunds
Another approach to addressing higher energy costs is through utility refunds where utilities return money or bill credits to their customers. In Maryland, utilities BGE, Pepco, and Delmarva Power are receiving $160 million in state tax refunds after the Maryland Supreme Court ruled they should have been exempt from state sales taxes they had paid on transmission and distribution equipment. The utilities are passing those tax refunds onto their customers, although the amount and timing are currently unknown. Exelon, which owns all three utilities, says these refunds are intended to help their ratepayers in the short-term while advocating for policies and regulations that will benefit everyone in the long term.
Home Heating Assistance Programs
Many states are beginning to offer this season’s assistance through the federally funded Low Income Home Energy Assistance Program. However, amid much higher than expected prices, some states expect this will not cover enough costs, so several states are also providing additional funding to support and expand home heating assistance programs. For example, Vermont recently approved a $15.3 million state funding package to expand home heating aid programs. The state administers a one-time seasonal fuel assistance benefit for income-eligible households and directs funds to a program that provides emergency assistance for households that run out of fuel later in the heating season. In Massachusetts, Governor Healey announced a new program called the Middle Class Home Heating Oil Assistance Benefit, which will provide one-time emergency payments of up to $680 to eligible households that rely on heating oil. The state estimates that approximately 50,000 households will qualify, including families that have traditionally been ineligible for existing heating assistance. The benefit is also expected to deliver $150 million in relief to residents, according to state officials. The heating oil benefit will be available beginning in December 2026 through April 30, 2027, or until funds are exhausted. Lastly, Connecticut is providing $12.7 million in state aid from Connecticut’s Federal Cuts Response Fund to supplement the Connecticut Energy Assistance Program (CEAP), which helps low-income households afford heating costs during the winter. CEAP requires households to apply for assistance each year; the next deadline is May 31, 2027.
From Short-Term Assistance to Long-Term Stability
Rising energy costs are a major concern across the country as winter approaches. The options discussed in this digest can provide short-term relief, but there is still a lot of work to be done to address energy affordability in the long run. But for now, states can look at these examples, among others, as a way to manage higher costs and provide more immediate relief to households.
