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:
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®.
For more information about NJR:
Visit www.njresources.com.
Follow
us on Twitter
@NJNaturalGas.
“Like” us on facebook.com/NewJerseyNaturalGas.
Download
our free NJR investor relations app for iPad, iPhone and Android.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181228005184/en/
Investors:
Dennis Puma
732-938-1229
[email protected]
Media:
Michael Kinney
732-938-1031
[email protected]