Heating costs forecast to drop

Home heating bills this month will drop 10 percent below January 2006, despite expectations that customers will use more natural gas to combat a colder winter this year, Pacific Gas and Electric Co. said Tuesday.

The San Francisco-based utility said its customers can expect to save $12.37 on average. It credited long-term purchasing contracts that avoid price spikes and its pipeline and storage capacity for helping keep prices down.

“We buy natural gas contracts well in advance and store 20 to 25 percent of winter needs over the summer,” said PG&E spokeswoman Jennifer Ramp. “That helps a lot.”

What the lower rates mean long term is unclear, however, because year-over-year natural gas price comparisons since September have been skewed by Hurricane Katrina’s effect on the market in 2005 and the first part of 2006.

Sacramento Bee