Mild winter, lower prices spark drop in heating costs

KANSAS CITY, Mo. -- A year after some of the highest heating costs in history, most utility customers are enjoying a dramatic drop in their bills this winter -- between $300 and $400 for an average home.

Missouri Gas Energy has filed a request for its fourth rate reduction since last winter, when the utility was asking regulators to allow it to charge customers its highest rate ever to pay for natural gas.

The new rate, which regulators have yet to approve, is to take effect for gas used beginning Feb. 1.

The warmer winter and the lower gas costs have cut area heating bills about one-third from last year.

Abundance of gas

Even if some severe cold sets in before spring, gas prices appear to be in check for the rest of the season, largely because of an abundance of gas in storage.

"I really can't think of a scenario -- short of a doomsday one -- that would change things," said Mary Menino, manager of natural gas for Energy Security Analysis, a consulting firm in Wakefield, Mass.

Last January, wholesale gas prices briefly hit $10 per thousand cubic feet. On Tuesday, wholesale gas costs in the Midwest were at $2.15.

Consumers began to feel the benefits of lower prices as warmer winter weather cut heating bills even further. An average Missouri Gas Energy customer spent $199 in December 2000 and $124 last December.