New Jersey Natural Gas Submits Annual Basic Gas Supply Service Filing to the New Jersey Board of Public Utilities

Rhea-AI Summary

New Jersey Natural Gas (NJNG), a subsidiary of New Jersey Resources (NYSE: NJR), filed for BGSS rate adjustments due to rising wholesale gas prices. The request includes a 12.5% increase for residential heating customers, affecting typical users of 100 therms per month. Factors for price hikes are attributed to geopolitical issues and supply-demand imbalances. While NJNG hedges 80% of its winter supply, the overall proposed increase is 15.9%, pending approval from the New Jersey Board of Public Utilities, effective October 1, 2022.

Positive

• 80% of NJNG's winter supply for 2022-2023 is hedged, mitigating customer price impact.
• NJNG has invested nearly $270 million in energy efficiency programs, aiding over 92,000 customers.

Negative

• Proposed 15.9% increase in rates could burden residential customers amid rising costs.
• Wholesale natural gas prices have more than doubled since May 2021.

Proposed Increase Driven Primarily by Higher Commodity Costs

WALL, N.J.--(BUSINESS WIRE)-- New Jersey Natural Gas (NJNG), a regulated subsidiary of New Jersey Resources (NYSE: NJR), today submitted its annual Basic Gas Supply Service (BGSS) filing to the New Jersey Board of Public Utilities (BPU) seeking to adjust its periodic BGSS rates for residential and small commercial customers primarily to reflect a significant rise in wholesale market prices for natural gas.

For the typical heating customer using 100 therms a month, the proposed increase related to the BGSS rate is 12.5% and the proposed increase related to the Balancing Charge is 1.1%. The BGSS and Balancing Charge recover the cost of natural gas supply used to serve customers and balance deliveries with customer usage. The BGSS represents the cost of the commodity that is passed through to customers. Any change to this rate does not result in a change in profits to the company.

A Steep Rise in Wholesale Commodity Prices
Wholesale natural gas prices on the NYMEX – a benchmark index for gas commodity pricing – have more than doubled since May 2021. While the underlying reasons for higher market prices cannot be tied to one specific cause or event, potential factors influencing the increase include global geopolitical issues, increased demand for liquefied natural gas exports, the impacts of supply chain issues on production and supply-demand imbalances.

NJNG’s Purchasing Strategies Help Minimize Impact to Customers
NJNG’s hedging and purchasing strategies focus on securing, managing and maintaining the most reliable and cost-effective supply mix and help protect customers from the full impact of market volatility and higher commodity prices. As a result, over 80% of NJNG’s projected supply for the 2022-2023 winter heating season is already hedged, lessening the impact of the market price increase to customers.

“Across the U.S., we see the effects of inflation. No one wants prices to go up, which is why NJNG works year-round to manage our natural gas supply portfolio to help mitigate the impact of these increases on our customers,” said Steve Westhoven, president and CEO of New Jersey Natural Gas. “We continue to monitor market conditions and will look for opportunities to lower costs and pass the benefits on to our customers.”

Energy Assistance and Flexible Payment Options Available
NJNG wants customers to know they have options to help manage, lower or receive grant assistance for their utility bills. Any customer having trouble paying their natural gas bills should contact NJNG to learn about available energy assistance programs. Resources include deferred payment arrangements, budget plans, energy bill payment assistance, one-time grants and low- or no-cost energy-efficiency programs to help reduce consumption and lower bills.

If you or someone you know is a NJNG residential customer in need of assistance, call 800-221-0051 and say "energy assistance" at the prompt to speak with an NJNG customer service representative or email us at energyassist@njng.com.

Reduce Your Bills by Reducing Energy Usage
NJNG offers energy-efficiency programs through The SAVEGREEN Project^®, including rebates and financing options for high-efficiency equipment, to help customers save energy and money. A home energy assessment, which can help identify ways to use energy more efficiently and reduce energy bills, is one way to offset these commodity-driven price increases. For more information, visit savegreenproject.com.

Additional Filings
NJNG is also seeking a 2.2% increase related to its Conservation Incentive Program (CIP) for a typical residential heating customer and a 0.1% increase related to its Energy Efficiency (EE) rate. The CIP normalizes year-to-year fluctuation from changing weather and usage patterns on both customers’ bills and NJNG’s financial margins. The EE rate recovers costs associated with SAVEGREEN, including investment in energy-efficient equipment upgrades and whole-house improvements. Since its inception in 2009, NJNG has invested nearly $270 million and helped over 92,000 customers save energy and money by making energy-efficiency upgrades.

The combined effect of the proposed BGSS, CIP and EE adjustments is an increase of 15.9%, or $21.63, for the typical residential heating customer using 100 therms a month.

Pending BPU approval, NJNG’s proposed BGSS and CIP rate changes will take effect October 1, 2022.

About New Jersey Resources
New Jersey Resources (NYSE: NJR) is a Fortune 1000 company that, through its subsidiaries, provides safe and reliable natural gas and clean energy services, including transportation, distribution, asset management and home services. NJR is composed of five primary businesses:

• New Jersey Natural Gas, NJR’s principal subsidiary, operates and maintains over 7,600 miles of natural gas transportation and distribution infrastructure to serve over half a million customers in New Jersey’s Monmouth, Ocean and parts of Morris, Middlesex and Burlington counties.
• Clean Energy Ventures invests in, owns and operates solar projects with a total capacity of nearly 370 megawatts, providing residential and commercial customers with low-carbon solutions.
• Energy Services manages a diversified portfolio of natural gas transportation and storage assets and provides physical natural gas services and customized energy solutions to its customers across North America.
• Storage and Transportation serves customers from local distributors and producers to electric generators and wholesale marketers through its ownership of Leaf River and the Adelphia Gateway Pipeline Project, as well as our 50% equity ownership in the Steckman Ridge natural gas storage facility.
• Home Services provides service contracts as well as heating, central air conditioning, water heaters, standby generators, solar and other indoor and outdoor comfort products to residential homes throughout New Jersey.

NJR and its over 1,200 employees are committed to helping customers save energy and money by promoting conservation and encouraging efficiency through Conserve to Preserve® and initiatives such as The SAVEGREEN Project® and The Sunlight Advantage®.

For more information about NJR:
Visit www.njresources.com.
Follow us on Twitter @NJNaturalGas.
“Like” us on facebook.com/NewJerseyNaturalGas.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220601006110/en/

Media Contact:

Michael Kinney

732-938-1031

mkinney@njresources.com

Investor Contact:

Dennis Puma

732-938-1229

dpuma@njresources.com

Source: New Jersey Resources

FAQ

What is the proposed rate increase for New Jersey Natural Gas (NJR)?

New Jersey Natural Gas is seeking a 15.9% rate increase due to significant wholesale market price rises.

When will the new rates for NJR take effect?

The proposed rates are expected to take effect on October 1, 2022, pending approval.

How much has NJNG's winter heating supply been hedged?

NJNG has hedged over 80% of its projected supply for the 2022-2023 winter heating season.

What factors contributed to the increase in wholesale natural gas prices?

The increase is attributed to geopolitical issues, high demand for liquefied natural gas exports, and supply chain disruptions.

What programs does NJNG have to assist customers with energy costs?

NJNG offers energy assistance programs, including deferred payment plans and energy efficiency upgrades.