WALL, N.J.--(BUSINESS WIRE)--New Jersey Natural Gas (NJNG) today notified the New Jersey Board of Public Utilities (BPU) that it intends to implement a 5 percent Basic Gas Supply Service (BGSS) increase for residential and certain small commercial customers effective February 1, 2019, due to a spike in wholesale natural gas prices. NJNG also recently received BPU approval to decrease its energy-efficiency rate resulting in a 1.3 percent decrease to bills effective January 1, 2019. The net effect of these changes will result in an overall increase of 3.7 percent. The typical residential heating customer using 100 therms a month will see their bill go from $96.57 to $101.40 effective February 1, 2019, an increase of $3.51.
This BGSS adjustment is a result of the increased cost of natural gas commodity prices, which are passed through directly to customers, and does not reflect an increase to NJNG’s profits. Since the time of NJNG’s BGSS filing in May, the wholesale natural gas prices for the winter months of December 2018 through March 2019 have increased by as much as 44 percent. The combination of colder weather in October and November 2018 and the potential for sustained cold weather this winter in a market with constrained access to supply and growing peak day demand are some of the factors contributing to the price surge.
“Colder winter weather has come early and is having a significant impact on wholesale natural gas prices,” said Steve Westhoven, president and COO of New Jersey Natural Gas. “While we are committed to utilizing effective purchasing strategies to manage supply, mitigate market impacts, and serve our customers, we, unfortunately, have no control over wholesale natural gas market prices. Even with this BGSS increase, customers’ bills are still roughly 40 percent lower than 2008.”
In accordance with a January 6, 2003 BPU order, New Jersey’s utilities are able to implement rate adjustments of up to 5 percent in December and February. This allows for the necessary cost recovery to keep pace with any wholesale natural gas market trends.
Through its established hedging practices, NJNG secured the price for the large majority of its anticipated natural gas supply for normal winter weather operations during the summer months when prices are typically lower. The ability to do this helps to minimize the impact of price volatility on customers. Due to current market conditions, however, it is not sufficient to meet the increased demand and offset the impact of the higher prices.
NJNG’s energy-efficiency rate recovers costs associated with offerings through The SAVEGREEN Project®, including investment in energy-efficient equipment upgrades and whole-house improvements.
About New Jersey Resources
New Jersey Resources (NYSE: NJR) is a Fortune 1000 company that, through its subsidiaries, provides safe and reliable natural gas and clean energy services, including transportation, distribution, asset management and home services. NJR is composed of five primary businesses:
- New Jersey Natural Gas, NJR’s principal subsidiary, operates and maintains over 7,400 miles of natural gas transportation and distribution infrastructure to serve over half a million customers in New Jersey’s Monmouth, Ocean and parts of Morris, Middlesex and Burlington counties.
- NJR Clean Energy Ventures invests in, owns and operates solar and onshore wind projects with a total capacity of more than 335 megawatts, providing residential and commercial customers with low-carbon solutions.
- NJR Energy Services manages a diversified portfolio of natural gas transportation and storage assets and provides physical natural gas services and customized energy solutions to its customers across North America.
- NJR Midstream serves customers from local distributors and producers to electric generators and wholesale marketers through its 50 percent equity ownership in the Steckman Ridge natural gas storage facility and its 20 percent equity interest in the PennEast Pipeline Project.
- NJR Home Services provides service contracts as well as heating, central air conditioning, water heaters, standby generators, solar and other indoor and outdoor comfort products to residential homes throughout New Jersey.
NJR and its more than 1,000 employees are committed to helping customers save energy and money by promoting conservation and encouraging efficiency through Conserve to Preserve® and initiatives such as The SAVEGREEN Project® and The Sunlight Advantage®.
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