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New Jersey Natural Gas Announces Price Decrease in Annual Filing

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

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