December 1, 2008 / 12:31 AM / 9 years ago

Despite drop in oil, Americans seal up for winter

<p>Robert Dardno programs the thermostat for the newly installed pellet stove at a home in Woburn, Massachusetts in this July 10, 2008 file photo.Brian Snyder/Files</p>

NEW YORK (Reuters) - When crude oil prices climbed to a record $147.27 a barrel this summer, many Americans -- their thoughts turning to winter heating bills -- rushed to line their homes with insulation and replace drafty windows.

Now, with the U.S. economy in tatters, many figure they still cannot afford to let money escape through the cracks in their homes, even though oil has fallen to $50 a barrel.

Across the northern United States, contractors, home improvement retailers and nonprofit groups report that such weatherization efforts continue apace, as Americans prepare for a frigid winter.

Francis Rodriguez, who runs the weatherization assistance program at the Association for Energy Affordability in New York said there has been no drop in interest despite the slide in energy prices.

"They know the price is going down, but they know what would have happened if the price had stayed up that way," said Rodriguez, whose organization helps landlords in places like the Bronx, a relatively poor borough of New York city.

He said volatile prices have changed the way people think about fuel, comparing the choice to weatherize a home with the choice of car.

"If you're going to buy a car, even though the gas is $2, you're not going to buy an SUV if you can buy a hybrid. Because (gasoline prices) can go up any minute."

The lagging economy has given consumers a new zeal for energy-efficient products, said Jean Niemi, a spokeswoman for national home improvement retailer Home Depot. Customers are still interested in saving the earth, but they now increasingly want to save money, too, she said.

Neimi said sales of energy efficient products, including insulation, rose 400 percent in northern states in August, and are expected to continue to do well through the winter, even though its overall profits are falling as the economy slows.

"Energy efficiency products -- that has been a strong category for us at least since August," she said.

Karen Cobb, a spokeswoman for Lowe's Cos Inc, another national home improvement warehouse, reported similar trends.

"We've seen solid demand for air filters, weather stripping and programmable thermostats," Cobb said. "Sales of pellet fuel and pellet stoves have also been strong as consumers shifted toward alternative heating products in preparation for winter."

Kenneth Rivera, 33, decided to take action when his family got an $890 utility bill in August. They had enrolled in a plan to average out their heating costs over the year, and ended up paying a large lump sum at the end of the cycle.

<p>Henry Harrison (L) and Robert Dardno install a pellet stove at a home in Woburn, Massachusetts in this July 10, 2008 file photo.Brian Snyder/Files</p>

"It hurt my pockets a little bit too much," said Rivera, who works as a doorman in New York and lives with his wife, their two children and his retired father in a three-bedroom house in the Bronx.

After weatherization, which will include replacing some windows, insulating, and replacing radiator valves, the Riveras are hoping to save $100 a month on both heating and air conditioning.

According to the U.S. Department of Energy, first-year savings from weatherization average $413 per family and every $1 invested results in $2.72 in total benefits.

The average U.S. household will spend about $1,000 a year on heating their homes this winter. Those using natural gas will pay about $889 and those using heating oil about $1,694, the department has said.

LOOKING FOR HELP

For some people hit by the U.S. mortgage crisis and the economic downturn, weatherizing their homes is too expensive, and more people will need help paying their heating bills this winter.

"We are finding that these customers are working and can't afford to keep up with the overall increases in food, gas for their cars, and the rising utility costs, along with foreclosures and evictions," said Shaun Taft of Metropolitan Community Action Agency in Wayne, a suburb of Detroit.

The group has seen a 300 percent increase in the number of calls for federal heating assistance since 2006.

Michigan, the center of the struggling auto industry, tied with Rhode Island for the highest unemployment rate in October, with 9.3 percent looking for work.

In Minnesota, Fenton Hyacinthe of Community Action of Minneapolis said he's seen many more applications for heating bill assistance than in previous years, many from people who have been laid off.

For some people, the effect of the mortgage and economic crisis is cumulative, he said.

"The downturn started probably about a year ago. What we're seeing now is that people are walking into our office with large past-due bills from last winter," Hyacinthe said.

Norma Cummings, 70, is glad she installed new windows, weather stripping, a furnace and water heater last year, with help from the Association for Energy Affordability, after 20 years living in her drafty home in the Bronx, New York.

"You can imagine, with the heat escaping, as the rates increased in the last few years, so did my utility bills," she said. "The energy usage has dropped, conservatively, at least 35 percent."

Reporting by Rebekah Kebede; Editing by Eddie Evans

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