Winter Heating Costs Lower Than Expected
RENEE MONTAGNE, host:
In many parts of the country, people cranked up their furnaces this weekend as winter weather blanketed the Midwest and East Coast. But even with falling temperatures, analysts say this winter's heating bills will not be as high as originally forecast.
NPR's Scott Horsely reports.
SCOTT HORSLEY reporting:
It might not feel like it, if you spent your weekend shoveling snow, but this has been an unusually mild winter so far. November and December were both warmer than average, and last month was the warmest January on record.
That's helped cut the price of natural gas in half since mid-December. Economist Neil Gamson, of the Energy Department, predicts this winter's heating bills will still be higher than last year's, but only about $180.00 higher, not two or three times that, as had been forecast last fall.
Mr. NEIL GAMSON (Department of Energy): We sort of dodged a big one. The fact that the winter has turned out warmer than normal meant that expenditures are not going to be as high as we had earlier thought.
HORSLEY: Natural gas is used to heat more than half the homes in America, and the price skyrocketed after Hurricanes Katrina and Rita ripped through the Gulf of Mexico, where 20 percent of the nation's natural gas is produced. So6me of those drilling rigs are still out of service, but thanks to the mild winter, customers haven't needed as much gas to heat their houses. And even if the rest of the winter brings cooler temperatures, there should be enough natural gas left in storage to avoid another price spike.
Rollercoaster prices can make it hard for consumers to know whether to lock in a price with a long-term contract. Janine Migden-Ostrander is Consumers Council in Ohio, where natural gas customers are now allowed to shop around.
Ms. JANINE MIGDEN-OSTRANDER (Ohio Consumers Council): It's possible that prices may drop on the spot market for a few months, but then they could pick back up and be higher. I think, overall, that you're going to see that, while prices might drop some, higher prices are here to stay in Ohio.
HORSLEY: Migden-Ostrander's office is also counseling consumers on ways to reduce their use of natural gas to help keep heating bills in check no matter what happens to the weather.
Scott Horsley, NPR News.
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