I/M/O the Petition of New Jersey Natural Gas Company
for the Annual Review and Revision of its
Basic Gas Supply Service(BGSS), Gas Cost Recovery(GCR)
Factor for F/Y 2005
BPU Docket Nos. GR04060432

Freehold, New Jersey
August 10, 2004

Good evening. My name is Debra F. Robinson, and I am an attorney representing the New Jersey Division of the Ratepayer Advocate. Our office was created by the New Jersey Legislature to represent ratepayers in cases such as this where a utility seeks an increase in rates or change in services.

New Jersey Natural Gas Company (“NJNG” or the “Company”) filed an initial Petition on June 9, 2004 with the New Jersey Board of Public Utilities (Board or BPU) asking for approval to implement a new Basic Gas Supply Service (BGSS) charge beginning on October 1, 2004. According to the Company, this is necessary because the increased prices for natural gas prevent the Company from recovering its commodity cost under its current rate.

The Company states that by October 31, 2004, South Jersey will have under-recovered gas costs totaling approximately $55,928,000. The Company has requested permission to increase the BGSS charge from its current level of $0.7525 per therm (after taxes) to $0.8095 per therm (after taxes), to be effective October 1, 2004, in order to mitigate the development of additional under-recoveries. The average residential customer bill would increase by approximately 5%, meaning that the average monthly bill for residential customers using 100 therms per month would increase by about $5.70.

The Ratepayer Advocate is fully aware of the current price volatility in the gas market that is having a profound impact on all classes of ratepayers. However, this office and the Staff of the Board of Public Utilities will continue their comprehensive review prior to a final determination and order by 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 and 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 Board of Public Utilities makes its 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.