Slide 26 of 27

Since average winter gas prices are expected to be up this winter compared to last year, and since demand is likely to rise sharply, it’s a pretty safe bet that residential gas heating customers will typically pay more than they did last year to heat their homes (about $70 dollars or 13 percent more by our calculations for a typical Midwest household).

We estimate that the typical gas-heated home in the Midwest will use about 90 thousand cubic feet of gas during the coming October-March period. That would be noticeably higher than the estimated usage rate for last winter but similar to the 1996-1997 winter.

It is interesting to note that while consumers used more gas during the 1995-1996 winter than is anticipated for the coming season they spent less for it due to much lower residential prices prevailing at the time.

We would be very surprised to see the average gas-heated household pay less for heat this winter than they did last year. Of the fuels being considered here, natural gas customers are by far the least likely to see savings relative to last winter.