Lots of Natural Gas for Winter — Bills Could Be Lower, Says Trade Group

By Alan Zibel

WASHINGTON – Heating bills will rise dramatically this winter for U.S. homeowners using heating oil, while those depending on natural gas should see more stable costs from a year ago, a consumer group said Monday.

Average spending on home heating this winter is forecast to rise by 10.5 percent, on average, driven by big increases in heating oil prices, according to the National Energy Assistance Directors’ Association, which represents state-run low income energy assistance programs.

“If you’re poor, it’s going to be tough whatever (fuel) you use.” said Mark Wolfe, the association’s executive director.

Heating oil, used predominantly in the Northeast, is derived from crude oil, whose futures market price has been trading around $80 a barrel, up 33 percent from $60 a barrel at the same time last year.

The average total heating oil bill for winter is projected to rise by 28 percent from a year ago to $1,834, the energy assistance group said Monday, a day before the government releases its official winter energy forecast.

The outlook for natural gas customers is not as dire, said the association, which held a joint press conference with a trade group representing natural gas utilities.

The American Gas Association, whose members include Sempra Energy, Pacific Gas & Electric Co. and CMS Energy Corp., expects natural gas bills to be somewhat lower this winter due to ample supplies – including record-high imports of liquefied natural gas .

Also bolstering natural gas supplies, the trade group said, is the partial completion of a $4.4 billion pipeline that brings fuel from Wyoming and Colorado to the Midwest and eastern states.

Spot natural gas prices averaged between $7.47 per 1,000 cubic feet and $8.24 per 1,000 cubic feet between February and June, but dropped later in the year, averaging between $6.35 and $6.40 per 1,000 cubic feet between July and September. Natural gas utilities spread out winter purchases throughout the year, buying some at higher prices and some at lower levels.

The advocacy group is less optimistic. Natural gas customers should see heating bills rise by 6 percent, the group said, while those using electric heat should expect a 7 percent jump.

Both groups said Congress should seek increased funding for a federal program of energy assistance to low-income consumers. Congress has not sent President Bush a spending bill that includes the program.

Originally published by Alan Zibel Associated Press .

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