UPDATE 3-US consumers to pay lower winter natgas bills-AGA

* Natural gas inventories seen hitting record highs

* Recession reducing heating/cooling demand

* EIA will issue official forecast on Tuesday

(Adds Piedmont Natural Gas to pass on cheaper fuel costs)

By Tom Doggett

WASHINGTON, Oct 5 (Reuters) - U.S. consumers are expected to pay lower natural gas bills this winter compared with last year due to above-normal gas supplies and cheaper energy prices, the American Gas Association said on Monday.

"Plentiful domestic natural gas supplies and lower wellhead prices will drive bills down this winter and provide relief for natural gas customers struggling in a trouble economy," the AGA said in its annual winter outlook.

Natural gas inventories have already hit an all-time high and are expected to remain at at record levels by Nov. 1, which is the start of the U.S. heating season. Utilities built up those stocks throughout the year with gas that was much cheaper than in 2008.

Gas prices have dropped this year thanks to the U.S. recession, which reduced gas demand in 2009 from the industrial sector by 6.4 percent through September. At the same time domestic gas production has been strong, boosting available supplies that helped keep prices down.

"When utilities were purchasing gas to put into storage during the spring and summer months of 2009, wellhead prices were way down, so it makes sense that natural gas customers will reap the benefits of those unusually low prices this winter," said AGA President and Chief Executive David Parker.

Piedmont Natural Gas (PNY.N) said on Monday its residential customers in Tennessee and North and South Carolina would see a 10 to 20 percent reduction in their heating costs this winter.

That follows CenterPoint Energy's (CNP.N) announcement last week that it will pass along cheaper wholesale natural gas prices to its customers in Minnesota, which are expected to lower winter heating bills by up to 20 percent.

"The lower natural gas prices of the summer are a direct benefit of a tough economic market," said David Baker, division regional vice president of gas operations. "We are happy our customers will benefit from lower wholesale natural gas prices going into the winter heating season."

The AGA's forecast mirrors the prediction from the U.S. Energy Department, whose energy forecasting arm expects costs for not only natural gas, but all heating fuels, to be lower this winter because of plentiful supplies.

"In total, fuel supplies are stacking up well ahead of winter -- a bright spot for consumers that, ironically, is due in large measure to the recession," the department's Energy Information Administration said last week.

The EIA will issue on Tuesday its official forecast for winter heating fuel supplies, demand and costs. (Reporting by Tom Doggett; Editing by Marguerita Choy)