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Heating prices will still bite
Heating sticker shock; Americans will see biggest jump in 5 years despite warm start to winter.
December 7, 2005: 10:45 AM EST

NEW YORK (CNNMoney.com) - A warm start to the winter will give Americans some relief on their heating bills this year, but they're still expected to suffer the worst heating sticker shock in five years, according to a government report.

The winter heating outlook from the Energy Information Institute released this week shows that the average American household will pay 25.7 percent more this winter, for an average heating bill of $989. That's the biggest jump since a 37 percent hike in costs in the winter of 2000-01, when winter heating bills cost an average of $774. Homeowners saw an average 12 percent increase in cost last winter.

The agency's November forecast had been looking for a 28.1 percent increase in heating costs this winter.

"The warmer weather in October and November depressed prices for the front part of the season, but it's still going to be expensive as we continue through the winter," said Tancred Lidderdale, spokesman for the agency.

Some of the drop in cost estimates is due to lower consumption. The forecast now calls for a 0.1 percent decline in use of natural gas this winter, rather than its earlier forecast of a 1.7 percent rise in gas consumption. Heating oil use is now expected to drop 2 percent, rather than the earlier forecast of a 1 percent decline.

The drop in use has also helped lower prices for those two prime heating fuels. The agency now expects the average price of heating oil, used primarily in the Northeast, to be up 23.7 percent this winter, rather than the earlier forecast of a 28.5 percent increase. Still, heating a home with heating oil is expected to cost $1,454, the most expensive of the energy options, according to the agency.

The cost of natural gas saw a more modest projected retreat in prices from the earlier projection, with the agency now looking at a 38 percent rise in prices rather than a 39 percent increase.

Natural gas is used by 57 percent of U.S. homes, compared to only 8 percent who use heating oil and 30 percent who use electricity. Homeowners using natural gas should see an average $1,024 bill this winter, although that average is helped by its greater use in warmer regions of the country. The gap in heating costs between gas and heating oil is much smaller in cold-weather regions.

Virtually all the homes using electricity to heat are in the south, giving natural gas about three quarters of homes in cold weather regions of the country.

For more on the causes of the heating sticker shock ahead, click here.  Top of page

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