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.
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