New Jersey’s Board of Public Utilities (BPU) approved a special rate plan for New Jersey Natural Gas Co.’s (NJNG) residential and commercial customers who use natural gas to fuel distributed generation technologies. Under the new rate offering, an average commercial customer could save up to 50% and a residential customer could save up to a 40% on delivery charges for natural gas used to power the small generation units, the utility said.

The potential savings vary depending on volume and season of consumption, but in general, the consumption patterns for distributed generation service provide the opportunity to offer the lower prices, NJNG said. Distributed generation units are small-scale power generation facilities located on or close to the facility being served. They include fuel cells, microturbines, reciprocating engines, combustion gas turbines, photovoltaics and wind turbines.

“The BPU’s approval of our pricing plan helps us advance [distributed generation] as another alternative to meet customers’ electric needs,” said NJNG CEO Laurence M. Downes. “The new pricing plan will allow customers to see an earlier return on their investment in alternative energy sources, which are environmentally friendly and provide increased reliability and power quality.”

In addition to supplementing the power supply during peak demand periods, distributed generation (DG) also can improve the efficiency of the gas distribution system, Downes said. “Longer term, as DG products gain greater acceptance, customers may see lower prices for both electricity and natural gas.”

In 2002, two NJNG commercial customers, the Sheraton Parsippany Hotel and Ocean County College, announced plans to benefit from DG technology. Both facilities will produce a portion of their electricity with 250 kW fuel cell systems powered by natural gas.

NJNG parent company New Jersey Resources (NJR) installed one of the first commercially available models of the Capstone MicroTurbine in April 1999 and added a second unit in 2000. The units operate 24 hours a day, seven days a week, using natural gas to generate a portion of the electricity required to power NJR’s headquarters in Wall, NJ.

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