Higher natural gas prices have prompted New Jersey Natural Gas (NJNG), the principal subsidiary of New Jersey Resources, to request its second rate hike in less than five months. NJNG notified the state’s Board of Public Utilities (BPU) on Monday of plans to increase prices by 5% effective Dec. 1; the utility requested a gas rate hike in June, which took effect in October.
The price increase is necessary, said the company, because of higher wholesale natural gas prices, which it said have risen 15% since its most recent increase in October and by about 31% since June 2004.
“We know customers are counting on us for affordability, and we go to great lengths to avoid raising prices,” said CEO Laurence M. Downes. “This increase is required strictly because of higher natural gas prices on the wholesale market. Even though rising energy costs are driven by the market and beyond our control, we remain committed to doing all we can to reduce the impacts of wholesale price trends on our customers.”
The regulated utility does not add a profit margin to the wholesale gas price, and the increase is “based on NJNG’s ongoing review of how closely Basic Gas Supply Service prices would cover natural gas purchased on behalf of customers.” The BPU allows the state’s natural gas utilities to implement price increases of up to 5% if needed, effective in December 2004 and February 2005, and decreases at any time.
With the increase, NJNG’s price for a residential heating customer will rise 5%, from $1.1682 to $1.2299/therm. For an average customer using 1,100 therms/year, the increase will add about $5.66 to a monthly bill, amounting to $67.87 annually.
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