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NJ Requires 7-day Backup For Interruptible Customers

NJ Requires 7-day Backup For Interruptible Customers

The New Jersey Board of Public Utilities announced last week that it would require interruptible natural gas customers to maintain a seven-day supply of alternative fuels on site, or through a firm contractual arrangement. The action will help to make energy prices in New Jersey a little less volatile going into the heating season, the BPU said.

Following the lead of the state of New York, which imposed a 10-day supply requirement on interruptible customers in August, the New Jersey Board passed the measure because of concerns about gas system reliability and to curtail the impact that interruptible customers have on the demand and pricing of fuel oil during the winter heating months. Interruptible gas customers are normally industrial plants, cogeneration facilities and large commercial sites, which, when taken off of natural gas, can put a strain on other energy sources such as home heating oil. In its ruling, the board was also concerned that higher fuel oil prices this winter might cause interruptible customers to ignore stop notices, and continue to burn natural gas.

"I think that it is a very positive first step. I don't think it comes close to ultimately addressing the impact that interruptible customers cause by spiking the prices of heating oil, but it is significant that for the first time the state of New Jersey has recognized the contributing role that they [interruptible customers] play," said Eric DeGesero, executive vice president of Fuel Merchants Association of New Jersey. "I would prefer to see no more interruptible service offered, and make them all go firm because of the impact that they have."

DeGesero explained that the interruptible customers were turned off and forced to use other sources such as heating oil for three weeks last winter. That played a contributing role to the high heating oil prices that created hardships to NJ homeowners. "The average residential heating customer takes about 1000 gallons [of heating oil] a year. These firms are taking in one day, the consumption of 20 or 30 homeowners a year," he said.

Alex Steis

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