New Jersey orders big natural gas users to have alternate fuel this winter

Monday, September 25, 2000 By Tom Johnson, The Star-Ledger, Newark, New Jersey

The state of New Jersey is ordering big users of natural gas to have alternative fuel supplies on hand this winter so residential customers will have enough gas to heat their homes at times of peak demand.

The order by the state Board of Public Utilities is aimed at so-called "interruptible" customers  about 700 large commercial and industrial users required to switch off gas supplied by utilities when a cold snap makes supplies scarce.

When a deep freeze hit New Jersey and the Northeast last winter, the price of home heating oil soared upwards as larger industrial customers competed for fuel with residential customers. At one point, the price of oil reached a record $2 a gallon as inventories dipped below normal.

"It's an excellent first step," said Eric DeGesero, executive director of the New Jersey Fuel Merchants Association, which had long advocated such action. "Part of what contributed to the price spikes last winter were these interruptible contracts."

Under the interruptible contract, gas customers get cheaper rates over the course of a year by switching to oil or some other fuel during those crunch periods. But a series of warm winters had lulled many of those customers into believing that supplies would be readily available at affordable prices  an assumption that proved wrong.

"What they're doing is creating a better safety net for schools, libraries and homeowners," said Blossom Peretz, New Jersey's Ratepayer Advocate.

Jim Benton, a lobbyist for the New Jersey Petroleum Council, said the approach  also adopted by neighboring states  may help smooth out demand in the marketplace during a frigid snap. "When the gas is cut off to large industrial users, if they all come on line at the same time, it is going to cause a problem," he said.

Cathy Raniolo, director of the New Jersey Citizen Action Oil Group, said the order might help ensure plentiful supplies of gas but does nothing to help working-class families who are facing steeper bills this winter. The price of home heating oil is around $1.45 a gallon, she said, about double what it was a year ago.

"We, the working people, won't be helped by this," she said. Others were even more skeptical.

"This is a political response by the state to the home heating dealers who got caught last year and couldn't explain why prices spiked to their customers," said Hal Bozarth, a lobbyist for the chemical industry. "It will have absolutely no impact on home heating oil supplies or prices."

http://www.enn.com/news/wire-stories/2000/09/09252000/krt_natgas_31735.asp

-- Martin Thompson (mthom1927@aol.com), September 25, 2000