High heating costs will burn wallets in '07

NEW YORK (CNN) -- No matter what method Americans use to heat their houses, this year it will cost them more than last, according to a government report issued Tuesday.

On average, Americans will spend $977 to heat their homes this year, averaging for all fuels across all sections of the country, according to the Energy Information Administration.

That's a record high and nearly 10 percent higher than the $889 spent last year, not adjusted for inflation. The previous record was $948 in 2005-2006, according to the Energy Information Administration.

Those who use oil will be hit the hardest. Due mostly to higher crude prices, nationwide-average oil heating bills this winter are expected to be 22 percent higher than they were a year ago, the report said.

That translates into a $319 seasonal increase in average heating bills, although actual amounts will vary depending on region and home size. About seven percent of Americans, mostly in the Northeast, heat their homes with oil.

Natural gas users, accounting for more than half of U.S. households, can expect to pay 10 percent, or $78, more this winter. Propane users can expect to pay 16 percent, or $221, more; electricity users will see a 4 percent, or $32, rise.

About 30 percent of U.S. homes are heated with electricity, while about 5 percent use propane.

Electricity and natural gas are not necessarily cheaper than heating oil, but they're used more widely in the South, where it's not as cold.

The rise in home heating costs has not gone unnoticed by consumer groups.

Mark Cooper, research director for the Consumer Federation of America, said he supports a provision in an energy bill in Congress that calls for utilities to get 20 percent of their power from renewable resources by 2020.

Such a mandate, he said, would reduce the demand for natural gas used for generating electricity.

"Most of the studies show there would be a significant drop in the price of natural gas," he said.

The proposal faces opposition from Southeastern utilities, which say the renewable resources in their region are more limited.

Cooper also advised people to tune up their furnaces before winter as a way to save money.

The Energy Information Administration said the increase in home heating oil costs is largely due to the rise in oil prices.

Crude oil prices are about 30 percent higher than they were a year ago. Analysts attribute the price jump to a number of factors: The falling value of the dollar; fears over Gulf of Mexico storms; conflict or potential conflict in Iran, Nigeria and Venezuela; speculative investing; surging worldwide demand and limited supply.

In addition to citing higher fuel prices, the energy administration said this winter is projected to be 4 percent colder than last. E-mail to a friend

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