New Jersey Natural Gas Files Base Rate Case with the New Jersey Board of Public Utilities

As previously agreed to with the New Jersey Board of Public Utilities (BPU) in 2016, New Jersey Natural Gas (NJNG) today filed a base rate case that includes necessary cost recovery for operational and maintenance enhancements and critical investments in safety and environmental sustainability priorities.

The petition seeks a base rate increase of $128.2 million, which enables NJNG to maintain and enhance an industry-leading natural gas delivery system serving customers throughout Monmouth, Ocean, Morris, Middlesex and Burlington counties.

“We continuously invest in our natural gas infrastructure to safely operate a reliable and environmentally responsible system that keeps over 544,000 customers’ homes warm and businesses running,” said Steve Westhoven, president and COO of New Jersey Natural Gas. “These investments periodically require base rate adjustments, achieved through a rigorous approval process with regulators, to ensure our customers have safe and reliable service when they need it. We look forward to the successful resolution of this base rate case that is in the best interest of our customers and our company.”

The proposed rate adjustment is necessary to cover the costs associated with the responsible operation of NJNG’s business, including its substantial infrastructure investments. Since its base rates were last approved by the BPU in 2016, NJNG has:

  • Invested more than $600 million to upgrade and enhance the safety and reliability of its transmission and distribution systems.
  • Installed over 370 miles of new main to support safe and reliable service for its customers.
  • Responsibly acted to keep its system safe and environmentally sound by retiring or replacing approximately 200 miles of aged infrastructure.
  • Increased workforce and operating expenses to meet the needs of its customer base.
  • Created the most environmentally responsible natural gas delivery system in New Jersey with the fewest leaks-per-mile of any natural gas utility in the state.

If approved in full, the monthly bill for a typical residential heating customer using 100 therms a month would go from $101.89 to $121.27, an increase of $19.38. Even with the proposed increase, customers’ bills would still be nearly 30 percent lower than 2008 bills due to the decline in wholesale natural gas prices.

Natural gas bills consist of two main parts. The delivery charge, which includes base rates, covers the cost of providing natural gas to customers, including maintaining its operations and delivery systems, as well as the ability to earn a fair return on capital investments, which helps support future upgrades to our systems. The second part is the Basic Gas Supply Service (BGSS), or the portion of the bill that goes toward purchasing the natural gas commodity itself. NJNG does not profit from the sale of the natural gas commodity, or BGSS, which is passed through to customers.

As a part of its filing, NJNG is also seeking permission for a Phase II proceeding to request rate recovery for the Southern Reliability Link (SRL) upon completion of the project. Approved by the BPU in 2016, the SRL is a 30-mile transmission pipeline project that will provide a new natural gas feed into Ocean County and significantly enhance the reliability and resiliency of NJNG’s delivery system. Construction of the project is underway; however, its anticipated 2020 in-service date falls outside the established period for inclusion for this filing. The company currently estimates an increase of approximately $28.6 million in the Phase II base rate adjustment associated with the completion of the SRL, which would add an additional $4.58 to the typical heating customers monthly bill.

Under normal conditions, the BPU’s review of NJNG rate filing could take between nine and 12 months.

In a separate filing with the BPU, NJNG submitted its annual recovery of costs associated with its New Jersey Reinvestment in System Enhancement and Safety Acceleration and Facility Enhancement II programs. If approved, the typical residential heating customer using 100 therms a month would see an increase of $1.35 on their monthly bill effective October 1, 2019.

Source: New Jersey Board of Public Utilities
Date: Mar 29, 2019