NJ: More natural gas rate hikes due

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

More natural gas rate hikes due Friday, March 16, 2001

By KEVIN G. DeMARRAIS Staff Writer

New Jersey residents will continue paying for winter heat into the middle of the summer under an 8 percent cost-recovery plan adopted Thursday by the state Board of Public Utilities.

To help utilities make up for millions of dollars in revenue shortfalls resulting from soaring wholesale prices of natural gas, the BPU granted the state's four gas companies rate increases of 2 percent per month for April, May, June, and July.

The April increase had been tentatively approved in October, based on BPU review, along with 16 percent to 18 percent increases the companies received for November and monthly hikes of 2 percent each for December through April.

Because the increases are compounded, rates in July will be about 36 percent higher than they were in October.

The higher rates, however, come when gas use is low, so the impact will be limited. A customer of Public Service Electric and Gas Co. using 25 therms of gas would pay $26.71 in March and $28.91 in July, an increase of $2.20.

The increases are adjustments, not permanent rate hikes, allowing the utilities to recover their costs. By law, the companies make no profit on gas.

If the companies don't recover their costs through the higher rates, the BPU will allow them to impose a three-year surcharge, plus 5.5 percent interest, starting in December.

PSE&G, the state's largest utility with 1.6 million customers, estimates it will be $165 million in the hole by Oct. 31, spokeswoman Kathleen Ellis said.

The summer increases and the surcharge result from a surge in wholesale gas prices, which have risen by up to 150 percent over last winter's levels, and a decision by the BPU in October to spread the higher payments over many months.

The multi-step increases were approved in place of company requests that rates be increased by 30 percent to 40 percent before the start of the heating season.

"The board recognized that we financed the under-recovery, that . . . this is a real cost to us," Ellis said.

But Ratepayer Advocate Blossom Peretz said the companies got off easy.

"I regret that the utilities are not being required to share the pain of higher rates with their customers, who are already overburdened with enormous bills to heat their homes," Peretz said.

The BPU ruling covers Public Service, New Jersey Natural Gas Co., Elizabethtown Gas Co., and South Jersey Gas Co.

http://www.bergen.com/region/gas16200103164.htm

-- Martin Thompson (mthom1927@aol.com), March 16, 2001


Moderation questions? read the FAQ