Home heating costs in Oregon are soaring, but it doesn’t have to be this way

By Isobel Whitcomb

With winter in full swing, Ashlanders who heat their homes are probably facing a bit of sticker shock: The cost of “natural” gas (methane), which 36% of Jackson-County residents rely on to heat their homes, is spiking across the U.S. Since October, Avista, Ashland’s gas supplier, has raised its rates by more than 18% for residential customers on top of an 18% increase from January 2021 to January 2022 as well. This trend is not slowing down: Avista recently announced another rate hike on the horizon. If approved by Oregon’s Public Utility Commission, the average customer will see their bill rise by 8.1%.  

Those are big price hikes for any household, and it really adds up when you multiply that across the entire community. According to city reports of household gas usage in Ashland, we collectively burned a total of 3 million therms of gas in 2021 and we probably burn even more now due to new construction. But even if we just assume our usage has stayed the same, the households of Ashland paid about $1.2 million more to Avista than we did in 2021. 

These are part of a long-term trend that isn’t going to end anytime soon. According to the results of a survey by the Federal Reserve Bank of Dallas, 81% of oil and gas executives expect that the era of cheap natural gas will come to an end within the next decade. That’s because as the U.S. expands its fossil fuel production, it’s increasing its natural gas exports to Europe and beyond — making those energy sources more inaccessible to Americans.

Heat pumps can qualify for tax rebates

It’s possible to avoid volatile gas prices while still keeping your home cozy. Heat pump heating-and-cooling systems run on electricity rather than methane — and, thanks to the Inflation Reduction Act, these appliances are increasingly affordable. Low- and moderate-income homes that install a heat pump can receive up to $8,000 in tax rebates, which are available up front — so it’s possible to install the heat pump for free. Higher-income households don’t qualify for rebates, but they are eligible for a tax credit (subtracted from one’s tax return at the end of the fiscal year) worth 30% of the cost or up to $2,000. The city of Ashland also offers its own incentives for installing these energy-efficient appliances: up to $900 toward the cost of a heat-pump heating-and-cooling system.

The nonprofit Rewiring America provides a useful calculator that shows the personalized financial incentives available to renters and homeowners and landlords under the Inflation Reduction Act. It’s quick and easy to use. 

Holding the line on cost

As oil and gas prices rise, electricity remains affordable — especially in Ashland, which gets its electricity from the publicly owned Bonneville Power Administration, said Thomas McBartlett III, the city’s electric utility director. While investor-owned utilities, like Pacific Power, are raising prices by as much as 15% to cope with inflation, the city of Ashland was able to negotiate with BPA to keep prices stable for consumers. “That’s why it’s great to be a public power,” McBartlett said. “We’re able to absorb inflationary pressures.” 

As of 2022, the Northwest Energy Efficiency Alliance reported that Ashlanders with older gas furnaces spend between $930 and $1,550 per year on heat, compared to those with the most efficient heat pumps, who spend between $365 and $610 per year. Electrify Ashland Now! has published an analysis of the purchasing and operating costs — and greenhouse gas emissions — of heat pumps versus gas units based on Ashland-specific utility rates. 

Mike Wright, an Ashland resident and volunteer for Ashland Climate Collaborative’s Electrify Ashland Now! action team, has seen his own bills drop since installing a heat pump heating-and-cooling system last year, along with a heat pump water heater and portable induction stove, which also run on electricity. Before Wright made all of those upgrades, his average gas use was at least 60 therms, a unit of heat, per month. Based on current rates, this energy use would cost him roughly $100 per month. Today, Wright uses less than one therm per month — cutting his gas bill down to around $10. “For me, the (natural gas) rate hike has meant nothing,” Wright said. 

Shrinking the carbon footprint

Cost isn’t the only reason to switch over to electric heat sources. There’s also the climate — residential and commercial “natural” gas use is tied with in-city transportation as the largest source of climate-warming emissions generated in the city of Ashland. Ninety-five percent of Ashland’s electricity comes from carbon-free sources — primarily hydroelectric and a small fraction nuclear. The low carbon intensity of Ashland’s electric sources means that switching from “natural” gas home and water heating to heat pumps when it makes financial sense for you  is one of the biggest steps residents and businesses can take to slash their carbon footprint — and that’s in addition to reducing their utility bills. 

With the Inflation Reduction Act in effect, as of Jan. 1, Mike Wright is optimistic that most people will see a two-fold benefit from transitioning away from oil and gas and toward electricity: “I really believe that most people will make money.”

Isobel Whitcomb is a Development Assistant at the Ashland Climate Collaborative (ashland.climate.org).