- The Washington Times - Friday, October 5, 2001

Home-heating prices will drop this winter, federal forecasters predicted yesterday, as the slowing economy reduces demand.

In the Washington area, utilities say the price of some fuels will be 25 percent lower than last winter, but electricity rates generally will remain unchanged.

The slowing economy has reduced energy demands across the country, the Energy Information Administration said in its annual forecast on home-heating prices. For example, demand for jet fuel has fallen as much as 20 percent, and manufacturers are using 12.3 percent less natural gas this year, the agency said.

"The economy is not expected to provide an impetus to growth in energy demand this winter. We think this will make energy prices relatively lower," said Mary Hutzler, the agency's acting administrator.

The typical residential customer will save between $170 and $320 in energy costs this winter, the agency said. The projections are based on studies that showed energy demand and prices have fallen and inventories have remained strong.

In making its projections, Ms. Hutzler said the agency also assumes the country will experience "normal" winter weather. A winter that is 10 percent colder than usual could boost price projections by 15 percent, she said.

In the Washington area, residential customers who use natural gas will pay between 20 percent and 25 percent less this winter than they did last winter, according to local utility companies.

Washington Gas Light Co. said its average customer will pay $761.42 for natural gas between November and April, roughly 23 percent lower than the average $985.28 customers paid during the comparable period last winter.

Baltimore Gas & Electric Co. which serves parts of Montgomery, Prince George's and Calvert counties said its customers paid about $653 to heat their homes last winter. This winter, customers will pay between 20 percent and 25 percent less, the company said.

Both companies declined to break customer costs down in the form of an average monthly payment, because they said bills fluctuate dramatically each month. Washington Gas, for example, said its average gas bill was $174 last December and $260 in January.

The companies stressed their projections are preliminary and could be revised later. Washington Gas may update its projections after it has reviewed the federal data released yesterday, a spokesman said.

Potomac Electric Power Co., the region's largest electric company, said its customers will probably not see a major change in their bills this winter. The average monthly electricity bill for its customers was $62.42 last year.

The company, which sells electricity that other power companies produce, has price caps in place until 2004. It cannot raise prices on its customers, although prices could rise slightly through taxes, spokesman Robert Dobkin said.

"We heard a lot about an energy crisis last year, but Pepco customers did not see major increases last winter. We don't expect them to see major increases this winter," Mr. Dobkin said.

The Energy Information Administration said the price of home heating oil will fall about 17 cents a gallon, in part because oil inventories are substantially higher than normal levels.

A spokeswoman for the Petroleum Marketers Association of America, a trade group for heating oil distributors, said it believes prices will be lower this winter, although it does not make price projections.

The drop in jet fuel demand, the result of a decline in air travel in the United States since the Sept. 11 terrorist attacks, could force refiners to switch production to other forms of oil, some analysts say.

For example, the high sulfur distillate that is used to produce jet fuel also can be used to produce home heating oil. "They're very close," said John Felmy, an economist for the American Petroleum Institute, an oil industry trade group.

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