Firing Up the Fireplace to Reduce the Electric Bill

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Growing up in a rural community, it was relatively common for me to spend a few weekends every summer cutting firewood to lower the electric bill during the cold winter months.

Like many things, I only paid attention half the time to such personal finance tips as a kid, but I’m hoping this revival of an old family chore will help me reduce my costs. Especially since I own the trees and the only investment I’m making is some exercise on my part.

According to the Dept of Energy, energy prices are expected to rise an estimated 20-30% this winter, and I definitely don’t want my budget to take a hit any harder than necessary.

Plus, the commodity experts (my most trusted being Goldman Sachs) are also predicting continued spikes in the majority of hydrocarbon based fuels we rely upon each winter to keep our “chestnuts roasting on an open fire”.

Here are the estimated increases:

Heating Oil: 30% or more
Natural Gas: 20% or more
Electricity: 20% or more

Ostensibly, this will be a major burden for the everyday consumer already fighting massive inflation costs across the board (food, automobile gas, etc.), and we all know the major electric power companies certainly won’t absorb these extra costs out of the goodness of their hearts. Instead, they will be passed on to us as I found out this week.

For the environmentally conscious, don’t worry, I’ve planted 100 fold more trees than I could ever use as firewood.

Possible investments to benefit from this spike in energy prices?

Dominion Resources (NYSE:D): a producer of electric power with a solid history of paying dividends. The current dividend yield is around 3.7%.

Chesapeake Energy (NYSE: CHK): a natural gas company with a significant amount of operations in the largest, and most promising, natural gas rich regions in the US.