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Big drop seen in winter heating bills
Homes heating with natural gas can expect to pay 13 percent less than last year thanks in part to forecasts for a warm winter.
By Steve Hargreaves, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Those not lucky enough to head south for the winter can take solace in at least one bit of news: Heating bills for many Americans are expected to be a lot lower this winter.

Bills for homes heating primarily with natural gas are expected to be about $119, or 13 percent, less this winter, the Energy Information Administration said.

Cheap(er) Heat
What people spend for the winter season
This winter Last winter
Natural gas: $826 $945
Electricity: $839 $781
Heating oil: $1,522 $1,431
Propane: $1,265 $1,280
Note: Winter 2006-2007 figures are forecasts; last winter's are actual. Figures do not account for regional temperature variations.
Source:Source: Energy Information Administration.
This winter, do you think your heating bill will...
  Go up?
  Go down?
  Stay the same?
  Not sure
or View results

Residential home prices for natural gas are expected to be $12.23 per thousand cubic feet (mcf) compared to $14.64 per mcf last winter, EIA said.

EIA, the government agency that tracks energy statistics off all types, said the drop was due to forecasts for a warmer-than-usual winter and a big drop in price compared to last year.

Last year heating bills, and especially natural gas bills, were abnormally high due to Hurricane's Rita and Katrina, which devastated large parts of the Gulf Coast and severely disrupted oil and natural gas production.

Not everyone will pay less

Although this winter is expected to be about 2.1 percent warmer than usual, the government said it will still be 5.9 percent colder than last year, which was one of the warmest winters on record.

Because of that, people using home heating oil can expect to pay about $91, or 6 percent more, than last year, EIA said.

Heating oil prices didn't skyrocket last year nearly as much as natural gas prices did because, unlike natural gas, oil can easily be put on a ship and transferred around the globe to cover areas hit by localized outages, like the ones following the hurricanes.

Households heating primarily with propane can expect to pay an average of $15, or one percent, less this winter. Households heating primarily with electricity can expect to pay and average of $58, or 7 percent, more, EIA said.

More than half off all homes in the country are heated with natural gas, while about 30 percent use electricity, according to a 2004 report from the Census Bureau. Fuel oil and kerosene account for under 10 percent.

Fuel oil is used mostly in New England, while electricity is used more in warmer climates, the study said.

EIA also lowered its forecast for crude oil prices in 2007 by $4 a barrel, from $70 to $66.

Crude oil costs account for over half the price of a gallon of gasoline.

EIA said retail regular gasoline prices are expected to average $2.51 in 2007, which is 4 cents less than the agency had forecast last month.

That is still higher than the current national average for gasoline, which the motorist organization AAA put at $2.26 a gallon Tuesday.

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