New Jersey Natural Gas Announces Price Decrease in Annual Filing
June 01 2010 - 12:24PM
Business Wire
New Jersey Natural Gas (NJNG) today submitted a series of
filings to the New Jersey Board of Public Utilities (BPU) which
would result in an overall decrease of 2.1 percent for the average
residential heating customer. The change is proposed to be
effective October 1, 2010 and is subject to BPU approval.
“Today’s filings further demonstrate our commitment to identify
savings for our customers,” said Kathleen T. Ellis, COO and
executive vice president at NJNG. “Our cost control and natural gas
purchasing strategies, coupled with lower natural gas costs, have
enabled us to decrease prices to NJNG’s customers.”
“Our Conservation Incentive Program has continued to prove
successful for our customers and company, while helping to meet New
Jersey’s goal of reduced energy usage and greenhouse gas emissions.
Additionally, our Accelerated Infrastructure Program is enhancing
the reliability of our system infrastructure and providing job
growth in the local economy.”
As a result of the filing, a typical customer using 100 therms a
month would see their bill go from $138.75 to $135.86, a savings of
$2.89. On an annual basis, a customer using 1,000 therms would see
a savings of approximately $30. This proposed decrease is in
addition to $110 million in reductions through customer refunds and
bill credits since October 2009. The average residential heating
customer received savings of approximately $241 during the time,
representing an 18 percent reduction over the course of one
year.
The majority of customers’ natural gas bills consist of two
separate charges. The first, known as the base rate charge, is the
cost of delivering natural gas service to homes and businesses. The
second, the BGSS, is a commodity charge passed through to customers
based on NJNG’s cost to acquire natural gas. NJNG proposed a
decrease to the BGSS rate that reduces the average residential
heating customer’s bill by 3.5 percent. This portion accounts for
more than 60 percent of a customer’s bill. Any change in the BGSS
does not represent a change in profits to the company.
Through its Conservation Incentive Program (CIP), NJNG is able
to more actively encourage customer conservation and
energy-efficiency improvements while stabilizing financial margins
that would be impacted by changes in usage patterns. In the filing,
NJNG proposed an increase to the CIP recovery rate for residential
heating customers, representing a 0.7 percent increase to the
average bill. From October 2009 to April 2010, customers realized
commodity cost savings of approximately $13.4 million due to their
reduced natural gas usage. In addition, they will continue to
receive annual savings of $5.5 million in fixed-cost reductions as
a result of lower demand fee charges.
The last filing submitted today was for the recovery of costs
associated with NJNG’s Accelerated Infrastructure Program (AIP),
originally approved in April 2009. Through the AIP, NJNG is able to
recover the cost associated with capital investment that expand and
enhance its delivery system while stimulating the economy and
promoting job growth. Estimated construction costs for these
projects are valued at approximately $70.8 million. Through April
2010, NJNG has spent $15.5 million and anticipates spending $41.4
million by September 2010. The impact to the average customer bill
is a 0.7 percent increase.
New Jersey Natural Gas is the principal subsidiary of New Jersey
Resources, a Fortune 1000 company, that provides reliable energy
and natural gas services including transportation, distribution and
asset management in states from the Gulf Coast to the New England
regions, including the Mid-Continent region, the West Coast and
Canada, while investing in and maintaining an extensive
infrastructure to support future growth. With over $2.5 billion in
annual revenues, NJR safely and reliably operates and maintains
6,700 miles of natural gas transportation and distribution
infrastructure to serve nearly half a million customers; develops
and manages a diverse portfolio of more than 777,000 dth/d of
transportation capacity and 52 Bcf of storage capacity; and
provides appliance installation, repair and contract service to
approximately 150,000 homes and businesses. Additionally, NJR holds
investments in midstream assets through equity partnerships
including Steckman Ridge and Iroquois. Through Conserve to
Preserve®, NJR is helping customers save energy and money by
promoting conservation and encouraging efficiency. For more
information about NJR, visit www.njliving.com.
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