By Mike Boyer
The Cincinnati Enquirer

Just before overnight temperatures slipped into single digits, Cinergy Corp. Thursday offered a bit of warmth for its residential natural gas customers.

The utility holding company said the average bill for a Cincinnati Gas & Electric customer in February should slip about 2 percent to $118.21 from $120.32 this month because of lower cost of natural gas.

But the February bill, based on a home using 10,800 cubic feet of gas, is still sharply higher than last February's average bill of $81.46, when wholesale natural gas costs were as much as 60 percent lower, the company said.

In Northern Kentucky, where customers are supplied through Union Light, Heat & Power, the same residential gas customer would pay $114.72 starting Sunday, down from $122.31 this month.

The February rate for ULH&P is more than a third higher than last February's typical bill of $83.51, Cinergy said.

Roughly 70 percent of Greater Cincinnati homes are heated with natural gas.

Cinergy doesn't produce its own natural gas. It buys it from wholesale suppliers and is required by law to pass through that cost on a dollar-for-dollar basis. The company says it attempts to lock in gas supplies at lower prices in warmer months through futures contracts, but it also supplements demand with monthly and daily purchases.

Cinergy said the decline in gas rates for February reflected lower wholesale prices on the New York Mercantile Exchange this week amid signs that gas supplies will be adequate for the rest of the winter.

U.S. storage levels last week fell 195 billion cubic feet, or 8.6 percent, to 2.063 trillion cubic feet, Bloomberg News said. But supplies were 19 percent higher than a year earlier, up from 14 percent the previous week.

Steve Brash, Cinergy spokesman, said that despite the current frigid weather in the Midwest, there hasn't been the widespread cold this winter that cuts into gas supplies.

"In general, temperatures have been milder," he said. So far this heating season in Cincinnati, the number of degree days - an indicator of how much energy is needed to keep a building warm - is 5 percent below normal and 12 percent lower than last winter.

Additionally, there are signs that industrial customers aren't using as much gas, which has bolstered inventories, New York gas traders said.

Cinergy, which has about 500,000 gas customers in the Tristate, said gas costs - which account for about two-thirds of a customer's bill - will be $86.28 in February for the typical CG&E customer. That's compared with $88.39 this month and $51.66 a year ago.

For the typical ULH&P customer, gas costs will be $76.63 in February, compared with $84.22 this month and $49.63 in February last year.

E-mail mboyer@enquirer.com