Government: Winter heating bills expected to be slightly lower

Tuesday, October 10th 2006, 8:49 am
By: News On 6

WASHINGTON (AP) _ Winter heating bills are expected to be slightly lower for most families across the nation, with the highest reductions for those who use natural gas, the government said Tuesday.

Families using natural gas should expect to pay an average of $119 less during the upcoming winter compared to last year, a decrease of 13 percent, the Energy Department said. Those heating their homes with fuel oil will pay $91 more, an increase of 6 percent, it said.

The department said that propane users can expect to pay $15 less this winter, a drop of 1 percent.

Natural gas is the most widely used source of fuel for residential heating in the nation, especially in the Midwest. Fuel oil is used heavily in the Northeast.

Government and industry officials note that weather can always play a major factor in costs. If parts of the nation experience an unusually cold winter, heating prices can jump.

Last year, there was concern that heating bills would soar following the struggles of the oil and gas industry to recover from hurricanes Katrina and Rita. But the warmest January on record reduced demand and helped temper some of the expenses for consumers.

The National Oceanic Atmospheric Administration projected Tuesday that most of the country will see above-normal winter temperatures, though slightly cooler than last year's very warm winter.

``December is really a wild card right now but we have increasing confidence that it will get warmer as the season goes along. We don't see any freezes in Florida which is good news for orange growers,'' said Michael Halpert, lead forecaster at the NOAA Climate Prediction Center.

The DOE's Energy Information Administration said in its annual outlook for residential heating bills that for the first time since the 2001-02 winter, prices are projected to be either lower than or close to last year's prices.

According to EIA figures, the average winter heating bill for a home using natural gas was $465 in 2001-2002, increasing annually to $944 last winter. Homes using fuel oil saw a bump to $1,429 last winter compared with an average cost of $627 in 2001-02, the EIA reported. Propane users paid $736 in 2001-02, compared with $1,236 last winter.

Natural gas prices have dropped recently and natural gas storage is at an all-time high. The American Gas Association said that between April and June, prices held steady compared with the previous year and prices have been lower for the past three months.

The AGA said Monday that ``the industry has repaired much of the damage to its infrastructure and wholesale prices are lower, but the weather is the wild card.''