NIPSCO is predicting a big drop in heating bills for its natural gas customers this winter, as stocks of natural gas have risen to record levels and prices remain at seven-year lows.

The utility on Tuesday forecast customer bills for natural gas will average more than 35 percent lower than last winter's, with a typical customer paying a total of $324 less during this winter heating season.

"As we've seen since the end of last year, natural gas prices on the wholesale market have dropped considerably, and we're looking at a much different picture heading into this winter heating season compared to what we faced last year at this time," NIPSCO CEO Eileen O'Neill Odum said.

Odum cautioned that because of the economic recession, the utility still expects to see plenty of people struggling to pay their energy bills.

NIPSCO natural gas customers have seen natural gas prices plunge since last winter and now are paying 56 percent less for natural gas than they were one year ago. The charge for natural gas typically makes up three-quarters of a customer's natural gas bill. There also is a delivery charge and state and local taxes included on bills.

Nicor Gas in Illinois does not do a winter heating forecast, but that utility's prices also have dropped dramatically. Nicor customers now are paying 52 percent less for natural gas than they were a year ago.

NIPSCO made its forecast on the same day the U.S. Energy Information Agency predicted natural gas users nationwide will see bills drop 12 percent this winter as compared to last, representing a savings of $105 for the winter heating season. Households that use heating oil or electric heat also are expected to spend less during the heating season, the agency said.

Households nationally are expected to pay an average of $783 for natural gas, according to the agency. The average household using heating oil will pay $1,821 for heating oil, about 2 percent lower than last year. People using electric heat will pay $933, a decline of 2 percent and those using propane $1,667, or 14 percent less than last winter, the agency said.

The Energy Information Agency report cautioned that the projections reflect average costs and that expenditures for individual households will vary depending on local weather conditions, the size and energy-efficiency of homes and the efficiency of heating equipment.

The agency's report said natural gas inventories as we near the heating season are expected to be at a record high of more than 3.8 trillion cubic feet. Wholesale prices are well below last winter, and the agency said prices are expected to remain low through October and then increase slightly as demand picks up.

Propane users in the Midwest are expected to save as much as 21 percent compared to last winter because of a combination of lower fuel prices and milder weather, the agency said.

The agency said nearly 58 million households, or 52 percent, use natural gas for heating and another 39 million, or 35 percent, rely on electricity. Nearly 8 million households, or 7 percent, use heating oil and about 6.2 million rely on propane.

The Associated Press contributed to this story.

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Energy Information Administration: www.eia.gov.