Siding with New Jersey Ratepayer Advocate Blossom Peretz’spleadings for moderation, the New Jersey Board of Public Utilities(BPU) at a special meeting last week granted provisional approvalto three utilities for minimum requested rate increases that wouldpass on the rising commodity cost of natural gas.

New Jersey Natural Gas (NJNG) received the 16% rate hike itpetitioned for, but Elizabethtown Gas (ETG) and Public ServiceElectric and Gas Co. (PSE&G) received far less than requested.

“A rate increase is never a happy event for ratepayers, but wesaw a lot of mitigation in here that could help ratepayers getthrough this crisis,” said Peretz. The rates will become effectiveas soon as the board signs a formal order, which is expected by theend of the week.

The special meeting was in response to applications filed byfour utilities in an attempt to get the board moving quickly onpreviously-filed rate increase proposals. Because ofdifferentiating rate term periods, last week’s meeting onlyinvolved the rate increase proposals of NJNG, ETG and PSE&G.South Jersey Gas’ rate term begins on Nov. 1, so the BPU will hearits case at a later date.

In its rate hike petition, ETG requested a 17.3 to 30% increase,but the board only approved the 17.3% hike. Likewise, PSE&Gwanted 24%, but instead only received 16%. ETG and PSE&Gupdated their initial requests of 18% and 13% respectively aftergas costs went up over 50% after they filed. “There were filingsmade some months back, and since that time there have beenincreases above and beyond what the companies’ had sought,” saidETG spokesman George Koodray.

Starting in December 2000 and going through April 2001, the gascompanies may adjust their overall customer bills by 2% in eitherdirection each month to reflect the current market conditions.

“I would call it a win because we got utilities to come downmore than we had anticipated, and it is a win because we gotbenefits for ratepayers that they have never had before, likeextended payment plans without interest,” said Peretz. “I think itis also a win because the board directed that utilities with theirfilings have to give the board information on their long termenergy plans, which is something we advocate. We want them to beaware of the possibilities of hedging; we want them to diversifytheir portfolios so they don’t have all of the same kinds ofcontracts; we want them to use the spot market at certain times;and we want them to store their natural gas.”

“On the one hand, we are pleased the board has recognized thecosts we have incurred, but on the other hand, the recovery ofthose costs is not going to be quite as timely as we might of hopedfor,” explained Koodray. “What the board was looking to affect hereis as much rate stability as possible through the phase-in, and Ithink that’s what your seeing and we can understand that.”

NJNG spokeswoman Lori Backer said, “We are happy with theincrease because as far as timing goes, we had filed for this inJuly and we were hoping for an October implementation or decisionon it. As soon as the weather starts turning cold, and people startusing gas and we are still billing at the lower rate, we arecreating a potential under-recovery. So the sooner we get toimplement the rate, the less of a deficit we start building.”

NJNG and PSE&G released warnings and suggestions to theirrespective customers, informing them of the rate hikes and theeffect it would have on their bills. NJNG said under the pendingplan its 400,000 gas customers prices would rise from $76.33 to$89.63 per 100 therms, or about $12 a month on average. PSE&G’snew rate would raise the average monthly gas bill for 100 thermsfrom $70 to $81.20. PSE&G advised its 1.6 million gas customersamong other things to monitor their thermostats, insulate areasaround windows and doors and close off unused rooms.

ETG said the rate hike would raise its average gas customer’sbill from $82.80 to $97.09, a little over a $14 increase.

“We are actively out there pursuing the best possiblealternatives in the market, trying to buy with our customer’s bestinterest in mind,” said Koodray “We do that, the customer wins, andso do we. We recognize that we are going into a market that’s goingto involve a much higher level of pricing than we saw last year.”

Peretz said, “I think the utilities were aware that ratepayershave to be able to afford energy and they were not happy aboutcoming in with large rate increases. The cost will be recoveredsometime, but we did not want to see an initial rate shock duringthe winter season for customers.”

She stressed the importance of energy conservation, includingproper insulation, thermostat management, and proper caulking onwindows. She also pointed out that customers in crisis should takefull advantage of available state and federal funds.

In August, SJG filed for a 19% rate increase, which it lateramended to 22 to 39.7%. Its rate case will go before BPU within thenext few weeks.

Alex Steis

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.