ENERGY SQUEEZE / WINNERS AND LOSERS : Chills Already Being Felt in New England

The cold weather has not set in, but already Catherine Cohane has begun to worry over the cost of heating her home this winter.

“I’m just dreading my first oil bill,” said Cohane, during a recent trip to a suburban shopping mall here, 20 miles north of Boston.

Her fears are common in New England, where prices for home heating oil have soared by 42% in less than a month in response to the gulf crisis.

Perhaps nowhere else in the country is the impact of the crisis being felt so acutely as in this region, which remains heavily dependent on outside sources of energy, and, in particular, imported oil.

About 55% of Massachusetts homes are heated with oil, compared to 16% of all U.S. homes, according to Massachusetts Energy Commissioner Paul W. Gromer. A third of the state’s homes use natural gas, compared to nearly two-thirds nationwide.

Oil also comprises about 39% of the fuel burned by New England electric utilities, compared to 5% nationwide.

Like many Americans, Massachusetts residents first felt the sting of the oil squeeze at the gas pumps. Already hit with a 6-cent hike in the state’s gasoline tax this summer, residents saw the average price of a gallon of unleaded gas at self-service stations rise from $1.13 Aug. 1 to $1.37 last week.

The increase in crude oil prices will also likely show up on electricity bills. Massachusetts Department of Public Utilities Commission Chairman Robert N. Werlin said several utilities have already filed for increases in rates based in part on the rise in oil prices.

But with winter fast approaching, the impact of the gulf crisis that is most worrisome to state and local officials is the rise in home heating oil prices.

Since July 30, the average price of a gallon of heating oil in Massachusetts has risen from 90 cents to $1.28. Officials estimate the increase will cost the average homeowner who heats with oil $250 to $300 this winter, if prices hold steady.

Whether the price rise has peaked is far from certain, however. Homeowners still recall last winter, when heating oil prices reached a high of $1.51 a gallon as a result of the coldest December here in the last century.

Patrick Connolly, a senior consultant at Cambridge Energy Resource Associates, said prices of heating oil in the region could rise to $1.40 or $1.50 per gallon this winter.

Connolly said he did not anticipate higher prices than that since at present the region’s oil supply appears good. He attributed the price surge to the “uncertainty in the Mideast.”

Even if prices remain at current levels, it will mean hardship for residents of this state, already hard hit by an economic recession that has claimed 94,000 jobs in the last 12 months.

The burden could be especially severe on low-income people. The state, as part of a budget-cutting move, recently eliminated its contribution to a federal-state program that helps subsidize fuel bills of the poor.

The move will reduce both the numbers of people who qualify for the aid and the amount available for those that do, said Marc Potvin, director of North Shore Community Action Program, which disburses the fuel assistance in Peabody.

Businesses are also bracing for higher bills. Carol Delano, manager of a local glass shop, said she expected the store’s heating costs to double this winter.

Sara Johnson, an economist with DRI-McGraw Hill, a Lexington, Mass., economic consulting firm, said higher oil prices, coupled with a recent state tax hike, could prolong the state’s recession.

While New England has made strides in reducing dependence on oil since the 1970s, Energy Commissioner Gromer said the lesson of the current crisis is that “we need to continue to become more energy efficient and diversify our fuel mix.”

For Leo Ciman, interviewed at Peabody’s mall, a more immediate concern is staying warm the next few months. “I’ll just have to cut back on something else, because I’m not going to freeze this winter,” he said.