The outlook for winter heating costs is much brighter than it was just a couple of months ago, thanks to the steep decline in energy prices.

Those who can breathe the biggest sigh of relief are the people who use heating oil, which is about half as expensive as it was in July and 70 cents below the gallon price a year ago. At the current price, a typical customer might pay $500 less for heat this winter, compared with last year, according to calculations by The Journal.

Natural gas users will also get a break. Yesterday, the state Public Utilities Commission approved rate changes that will trim the bill of a typical National Grid heating customer by 4.1 percent, or about $64 a year. The new rate became effective yesterday.

The PUC is also considering a proposed decrease in National Grid’s electricity rates. The company’s proposal would cut the bill of a typical customer by 13.7 percent, or almost $13 a month, as of Jan. 1. The PUC is scheduled to decide the new rate later this month.

Behind these decreases has been a precipitous drop in the price of crude oil, which has tumbled 67 percent since its record high of $147 a barrel in July. Crude futures fell again yesterday to $49.28 a barrel on the New York Mercantile Exchange, the lowest close since May 23, 2005, Bloomberg News Service reported.

Energy analysts have said the decline has been prompted by an economic recession in the United States, Europe and Japan. When economic growth slows, demand for energy typically falls as businesses use less fuel. Yesterday’s decline came the same day that the Organization of Petroleum Exporting Countries, or OPEC, put off making a decision about whether to reduce crude oil production until its next meeting, on Dec. 17.

“OPEC’s postponement of a decision on output, combined with the fact that there’s nothing out there to take cheer from about the economy, is sending prices lower,” said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York, Bloomberg reported.

Despite these decreases, the cost of natural gas and electricity is still expected to be higher this heating season, compared with last year, according to calculations by The Journal.

A typical natural gas customer who uses 922 therms of gas a year will pay $1,554 in the 2008-09 heating season, an increase of 4.6 percent from $1,486 last season.

If the PUC approves the pending electricity rate decrease, the annual bill of a typical customer during this heating season will be $1,044, compared with $898 last year, a 16 percent increase.

Only heating oil customers can expect to pay less, if the current price –– $2.509 a gallon –– remains unchanged. A customer who uses 666 gallons of heating oil, which contains the same energy content as 922 therms of natural gas, can expect to pay $1,798 this heating season, a 23 percent decline from $2,337 last year.

Unlike electricity and natural gas rates, heating oil prices are unregulated. That means that oil customers, in general, are more exposed to the wild gyrations in energy prices.

For example, if the price of heating oil futures rise, oil dealers must pay more to buy the fuel for their customers. (Some may mitigate price spikes by buying a type of insurance to cap the amount they’ll pay.)

Last winter, the average price of home heating oil was about $2.60 a gallon, just as the weather turned cooler in September. By the time temperatures warmed again in May, the average price had surged 54 percent to $4 a gallon. By July, the price peaked at $4.74 a gallon –– an 82 percent increase in only 10 months.

National Grid’s electricity and natural gas customers saw rate increases, but they weren’t nearly that steep. Electricity rates went up by 5.2 percent in January, and 21.7 percent in July. Natural gas rates went up 7.4 percent in July.

Natural gas and electricity rates are less volatile for several reasons. National Grid buys electricity and natural gas for its customers through long-term contracts, which can guarantee a certain price over a long period of time.

In the case of natural gas, state regulations require the company to buy in advance most of the natural gas it will need for a coming winter.

In addition, the company typically will not file to change rates unless its calculations show that the money coming in from customers will vary from the company’s actual costs to buy the energy by more than $25 million.

That tends to insulate customers from big swings in the energy markets. It means that rates will be slower to rise when energy costs go up and slower to fall when energy prices drop.

During a period in which the utility’s costs exceed collections from customers, ratepayers are charged interest for the difference. Conversely, if the company charges more than it pays for the energy, it pays its customers interest on that extra money.

There’s no line item for interest on a utility bill. All those costs and credits are calculated once a year, and rates for the following year are adjusted accordingly.

tbarmann@projo.com