Folsom,
NJ – Today, South
Jersey Gas received approval from the New Jersey Board
of Public Utilities for rate reductions that will save
residential customers a total of 20.2 percent on their
gas bills.
Effective today, SJG will implement
a Basic Gas Supply Service rate decrease of $0.22 per therm,
or 13.3 percent, for residential heating customers. In
addition, a credit of approximately $20 million will be
applied to their October bills. The credit equates to a
5 percent reduction. Also effective today is a reduction
in SJG’s Conservation Incentive Program
rates, granting a $0.03 per therm, or 1.9 percent rate reduction.
As a result of these BGSS and CIP rate changes, a residential
heating customer will save $25.42 on a 100-therm monthly
winter natural gas bill and will receive a BGSS credit of
approximately $68 in October.
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 $3. SJG forecasts
commodity prices remaining in the range of $4 to $6 over
the next year.
Edward J. Graham, president and CEO
of SJG 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 $122.2 million and almost $39.2 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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