FOLSOM, N.J.--(BUSINESS WIRE)--South Jersey Gas today received approval from the New Jersey Board of Public Utilities to further reduce rates, which will save residential customers on average 3.4 percent on their natural gas bills.
“With wholesale gas prices trending lower and with our customers using natural gas more efficiently, we’re pleased to offer this overall rate reduction to them, while providing them with the superior service they have come to expect and deserve”
As a result of this rate reduction, an average residential customer will see a decrease of $4.61 on a 100-therm monthly natural gas bill. This decrease follows a $22.7 million bill credit issued to customers in March 2011. When coupling this new rate reduction with the March bill credit, SJG’s residential customers will see a total 9.4 percent decrease in rates this year. In addition, SJG implemented a 10.6 percent rate reduction in 2010. With the new rates in effect, gas bills have not been this low since 2003.
Two primary drivers of the rate reduction are the Basic Gas Supply Service clause and the Conservation Incentive Program. The BGSS serves as a method to pass along increases and decreases in wholesale gas costs directly to customers without affecting SJG’s income. The CIP encourages customers to use natural gas more efficiently and reduce consumption. It also benefits investors by eliminating the link between the company’s profits and the quantity of natural gas it sells. Since the CIP was instituted in 2006, SJG’s customers have reduced their natural gas use by 20.6 billion cubic feet - enough gas to heat 54,000 homes - and they have saved $219 million in energy costs.
“With wholesale gas prices trending lower and with our customers using natural gas more efficiently, we’re pleased to offer this overall rate reduction to them, while providing them with the superior service they have come to expect and deserve,” said Edward J. Graham, South Jersey Gas president and CEO. Graham noted that one reason for the lower BGSS pricing is the availability and close proximity of Marcellus Shale gas to SJG’s service area.
Graham added that, “The beneficial impact of this rate reduction on a homeowner switching to natural gas service from oil or propane would be significant. Based on regional pricing, a customer would see almost 60 percent annual savings over oil and almost 70 percent over propane. Now is a great time to switch to natural gas because of the financial incentives that are currently available to customers installing high efficiency natural gas heaters.”
South Jersey Gas, subsidiary of energy services holding company South Jersey Industries (NYSE:SJI), provides natural gas service to more than 349,000 residential, commercial and industrial customers in Atlantic, Cape May, Cumberland, Salem, and significant portions of Gloucester, Burlington and Camden counties in New Jersey. Visit http://www.southjerseygas.com to learn more about South Jersey Gas and its programs.