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BPU Docket No. GR05060496 PUBLIC HEARING
In accordance with the normal procedure, the Board, on August 19, 2005,
issued an Order allowing the Company to increase its BGSS rate by 5.88
cents per therm, from 87.07 cents to 92.95 cents per therm. The impact
of this increase on average monthly bill for typical residential heating
customer using an average of 100 therms per month was an increase of about
$5.88, or 4.4 percent, effective September 1, 2005. On November 10, 2005, the Company filed an Emergent Motion requesting
the Board to authorize the Company to implement a rate increase greater
than the two five-percent increases permitted under the Board’s
normal procedure. The Company’s motion requests the Board to allow
the Company to increase its BGSS rate from the current 92.95 cents per
therm to $1.3353 per therm, an increase of 40.58 cents per therm, effective
December 14, 2005. The requested rate change would increase a 100-therm
residential bill by $40.58 per month, or approximately 29.3 percent. The
Emergent Motion also requests the Board’s approval for the Company
to apply for an additional self-implementing rate increase of 5 percent,
if necessary. The Emergent Motion states that the requested 29.3 percent rate increase
is needed in order for the Company to recover dramatic increases in the
cost of natural gas the Company purchases to serve its BGSS customers.
Although the Company recently implemented a gas price increase effective
September 1, the pervasive damage to gas production and transport facilities
caused by the natural disasters of Hurricanes Katrina and Rita only added
to the existing volatility in the natural gas market. No one could have
anticipated the extent of the damage to such a vital area of gas production
and supply for our nation. Unfortunately, the Board had just permitted
the Company to increase its BGSS rate. Therefore, the proposed BGSS increases
reflect the effects of the hurricanes on gas supply, in addition to the
steadily increasing demand for natural gas by consumers and gas-fired
electric generation. Although there have been many recent news articles
and reports that the price of gasoline has been in decline, the price
of gasoline does not reflect the price of natural gas. Natural gas is
traded as an independent commodity with its own distinct market. The Company is not permitted to make a profit on its BGSS charges. BGSS
rates are set to pass through to customers the cost of natural gas purchased
by the Company. The Ratepayer Advocate is fully aware of the volatility
in natural gas prices that is having a profound impact on all classes
of ratepayers. However, this office will continue its comprehensive review
prior to a final determination and order by the Administrative Law Judge
and the Board of Public Utilities regarding the Company’s final
BGSS rate. Our office is conducting a complete investigation of the Company’s
request based upon the information that is being supplied and updated
by the Company. We have retained the services of an expert consultant
to assist us in our review. The Ratepayer Advocate’s inquiry is
focused on the critical issues of whether the Company’s proposal
allows ratepayers to pay the lowest rates possible consistent with receiving
safe, reliable and proper service. The New Jersey Board of Public Utilities,
with legal submissions from the parties, including the Ratepayer Advocate,
will make the final decision regarding the utility’s requests for
an adjustment to its BGSS charge. The purpose of this hearing is for you, the customer, to voice your opinion,
relate your experiences and offer comments about your Company’s
rates and service. It is important that you express your views so they
may become part of the record on which the Administrative Law Judge and
the Board of Public Utilities make their decisions. The Ratepayer Advocate
also needs to hear your views. Your active participation is strongly encouraged
to help in our evaluation of the Company’s proposals and our preparations
for the evidentiary hearings. This hearing is being transcribed and your comments will become part
of the record. I would like to reiterate the importance of your participation
so that the Ratepayer Advocate can have a clear record of your concerns
and interests. On behalf of the Ratepayer Advocate, thank you for attending tonight’s hearing. |
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