New Jersey Resources Corp.’s New Jersey Natural Gas Co. (NJNG) received approval Tuesday from the New Jersey Board of Public Utilities (BPU) for an 8.7% increase in prices. The company filed for the increase as a result of higher wholesale natural gas prices, noting that since last winter, prices have at times reached levels more than double the prior year on the New York Mercantile Exchange.

“We know how important it is for our customers to be able to plan their energy expenses,” said Laurence M. Downes, CEO of NJNG. “Even with this increase, NJNG remains the low-cost provider in the state.”

On May 1, NJNG filed the request with the BPU for an 8.8% increase to customers’ bills. Because of a minor increase in NJNG’s prices on Aug. 1 to fund the statewide Universal Service Fund, the amount received is a slightly lower portion of current prices, resulting in the 8.7% increase.

With the price bump, a residential heating customer’s rate will increase from $0.9342 to $1.0214 per therm. The increase will add about $7.99 to the monthly bill of an average customer using 1,100 therms per year, amounting to $95.92 annually.

“By locking in lower prices ahead of time and using other purchasing strategies and financial tools, during the 2002-2003 heating season, we saved an estimated $40 million in natural gas costs that would have been passed through to customers,” Downes said. “We have already secured price commitments on over 80% of our normal weather natural gas purchase requirements for the coming winter as a means to reduce the impact of continuing wholesale volatility.”

The company noted that it has not filed for a traditional base rate increase for service delivery and other charges in over 10 years. Since then, NJNG said it has invested over half a billion dollars in new capital to meet the needs of system reliability and a growing customer base, and added nearly 120,000 new natural gas heating customers.

The new rate will be effective on Sept. 1. NJNG, along with all of the state’s natural gas utilities, has the option of requesting two additional 5% increases, which would be effective in December 2003 and February 2004, if necessary.

NJNG is one of the fastest-growing local distribution companies in the United States, serving nearly 450,000 customers in New Jersey’s Monmouth, Ocean, Middlesex and Morris counties.

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