Folsom,
NJ – South Jersey
Gas has proposed a rate reduction with that would save residential
customers a total of 20.2 percent on their gas bills.
SJG today filed its Basic Gas Supply Service
petition with the New Jersey Board of Public Utilities, proposing
a rate decrease of $0.22 per therm, or 13.3 percent, for
residential heating customers, as well as a BGSS credit of
$20 million to all customers’ bills in October. The
credit equates to a 5 percent reduction. SJG also filed its
annual Conservation Incentive Program petition, requesting
a $0.03 per therm, or 1.9 percent rate reduction. If approved,
a residential heating customer will save $25.42 on a 100-therms
monthly natural gas bill as a result of the BGSS and CIP
rate reductions. In addition, residential heating customers
will receive a BGSS credit of approximately $68 in October.
“With the BGSS and CIP reductions in place, a homeowner
who switches to natural gas from oil would realize significant
savings. Based on July futures price for oil at $66 per barrel,
SJG’s equivalent price of natural gas would be $49.04
or 25.7 percent less. This summer is a perfect time to switch
to natural gas as the installation will be completed prior
to the start of the winter heating season,” said South
Jersey Gas President and CEO Edward J. Graham
The BGSS clause serves as a method to pass
along increases and decreases in gas costs directly to customers;
therefore, SJG’s income is not affected by BGSS rate
adjustments. The company is able to provide the rate reduction
and credit for two reasons. First, SJG received approval
to release pipeline capacity, the cost of which was previously
paid by customers. Second, the cost of natural gas is lower
now than a year ago. Natural gas prices in 2008 were about
$11 per dekatherm compared with the current price per dekatherm
of about $4. SJG forecasts commodity prices remaining in
the range of $4 to $6 over the next year.
Graham stated, “We monitor natural gas prices daily
and were able to secure lower priced gas, giving us the ability
to provide a rate reduction and credit this year. We chose
to split the reduction and provide a bill credit during October
rather than spreading the entire reduction over a 12-month
period. Receiving a lump sum credit will result in many customers
having a very minimal payment or no payment at all in October,
which will allow them to use their money for other expenses.” Graham
added, “SJG’s BGSS rate has not been this low
since 2003.”
In October 2006, the NJBPU approved SJG’s pilot CIP
program, which encourages customers to use natural gas more
efficiently by educating them about measures they can take
to reduce natural gas consumption. The program also benefits
investors by eliminating the link between the company’s
profits and the quantity of natural gas it sells. The proposed
reduction in the CIP rate is due to winter weather impacts
on revenue. Since the inception of the CIP program, customers
saved approximately $79 million and almost $23 million of
SJG’s net income was protected.
South Jersey Gas is the principal subsidiary of South Jersey
Industries (NYSE:SJI) and provides natural gas service to
more than 340,000 residential, commercial and industrial
customers in Atlantic, Cape May, Cumberland, Salem, and significant
portions of Gloucester, Burlington and Camden counties in
New Jersey. Visit http://www.southjerseygas.com to learn
more about South Jersey Gas and its programs.
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