State of New Jersey

STATE OF NEW JERSEY
Division of The Ratepayer Advocate
31 Clinton Street, 11th Fl.
P. O. Box 46005
Newark, New Jersey 07101

Press Release

For Immediate Release
Tuesday, October 6, 2004

For Further Information
Contact: Tom Rosenthal
973-648-2690

Ratepayer Advocate Seema M. Singh Urges Conservation
To Counter Increases in Natural Gas Rates

Newark, NJ – Ratepayer Advocate Seema M. Singh said that the increases in natural gas rates that were approved yesterday, which range from 2% to 5%, are a clear signal to ratepayers that they should immediately undertake conservation measures.

“There are three steps that ratepayers can take right now to lower the impact of the rising commodity price of natural gas, which utilities pass through to ratepayers,” said Ms. Singh. “They are conserve, conserve and conserve.”

The price increases for the state’s four natural gas utilities, which took effect immediately, are:

 
New Rate
(per therm)
% Increase Monthly bill increase Avg. monthly
bill(using 100 th)
PSE&G $0.7983 3% $1.72 $120.06
NUI/E’Town $0.8208 4.2% $5.15 $127.67
NJNG $0.8095 5% $5.70 $119.82
SJG $0.8707 1.9% $2.53 $132.73

Ms. Singh said the gas utilities are permitted to self-implement two additional automatic 5% rate increases in December 1, 2004, and February 1, 2005, if needed. The increases are commodity pass-through price increases. The utilities do not profit from the increased price in natural gas.
“The price of natural gas is going up for a variety of reasons – all of which are beyond our control here in New Jersey,” Ms. Singh said.

They include:

• The demand for natural gas is steadily increasing - but the domestic sources of supply are decreasing.
• There has been a decreased supply from Canada because wells are going dry.
• There has been a decreased supply from Mexico because the country is consuming more energy as it industrializes.
• There are decreasing sources of natural gas from the southwestern United States and increased consumption as natural gas is replacing coal to generate electricity.

Ms. Singh said, “We need more innovative drilling techniques and sources of supply, such as Liquefied Natural Gas.” She noted that the volatile price of crude oil in the world market (which recently reached $50 per barrel) is also having a negative impact on gas commodity prices and increasing demand.

“Now is the perfect time to prepare for the start of the winter heating season,” Ms. Singh said as she urged ratepayers to visit the Ratepayer Advocate’s Web site – www.rpa.state.nj.us - and order the Ratepayer Advocate’s Consumer Conservation Handbook, which includes many easy-to-do and inexpensive or free steps to reduce energy consumption and cut bills.

Ms. Singh also recommended that ratepayers visit the Ratepayer Advocate’s Web site and the Web site of the Board of Public Utilities (www.bpu.state.nj.us) to explore the different assistance programs that Governor James E. McGreevey has put into place. New Jersey has a winter moratorium on utility shutoffs during winter as well as budget billing programs that spread out winter heating costs over the entire year.

“These increases in the commodity prices of natural gas are beyond our control, but that doesn’t mean we can do nothing about them,” Ms. Singh. “An effective conservation program can help offset the rising costs of energy.”

The Division of the Ratepayer Advocate is an independent state agency that represents the interests of utility consumers and serves as an active participant in every case where New Jersey utilities seek changes in their rates or services. The Ratepayer Advocate also gives consumers a voice in setting long-range energy, water, and telecommunications policy that will affect the delivery of utility services well into the future.

Additional information on this and other matters can be found at the Division of Ratepayer Advocate’s website at http://www.rpa.state.nj.us

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