NJ Natural Gas Looks to Increase Base Rates

On Mar 30, 2021

New Jersey Natural Gas (NJNG) filed a petition with the New Jersey Board of Public Utilities (BPU) requesting an increase of approximately $165.7 million to its base rates. Since its last base rate filing in 2019, the subsidiary of New Jersey Resources has invested nearly $850 million in the safety, reliability and environmental benefits of its delivery system and operations. These investments are already at work benefiting customers, but are not currently reflected in rates.

“Nothing is more important to our company than safely and reliably delivering the energy our customers depend on for their homes and businesses,” said Steve Westhoven, president and CEO of New Jersey Resources. “We are dedicated to meeting that commitment in a sustainable, responsible way. The investments we’ve made in our system, as reflected in this filing, deliver on that commitment.”

The proposed rate adjustment is necessary to cover costs associated with infrastructure investments made by NJNG to maintain and enhance its natural gas delivery system and ensure the responsible operation of its business, including:

• Investment in plant in service, including improvements to the overall integrity of its natural gas transmission and distribution systems.
• Continued infrastructure replacement – an ongoing priority for NJNG that has made its system one of the most environmentally sound in New Jersey, as measured by leaks per mile.
• Development of a green hydrogen fuel project to reduce NJNG’s emissions as part of its commitment to sustainability and a clean energy future.
• Construction of a training facility to provide mandated operator qualification and safety-related training, including classroom and simulated field activities for NJNG employees and third-party contractors, as well as training opportunities for local emergency personnel.

As part of its filing, NJNG is also seeking rate recovery for the Southern Reliability Link (SRL). NJNG expects the 30-mile transmission pipeline project to be placed into service this fall. Approved by the BPU in 2016, the SRL provides a new natural gas feed into the southern end of NJNG’s service territory, significantly enhancing the reliability and resiliency of its distribution system.

Currently, more than 85% of the natural gas supply used to serve customers in Monmouth, Ocean and Burlington counties is delivered through a single feed at the northern end of NJNG’s system. Any significant supply disruption on this line could negatively impact a majority of NJNG’s nearly 560,000 customers. SRL directly mitigates this risk by accessing a second interstate supply source that interconnects with the southern end of NJNG’s system.

Through this filing, NJNG is seeking to recover in rates appropriate costs for investments already made and expenses associated with operating its business, and to achieve a fair and reasonable outcome for ratepayers.

“We take our responsibility to deliver exceptional service at a reasonable rate seriously. This is achieved through a rigorous approval process with regulators,” Westhoven said. “We look forward to a successful resolution of this petition that is in the best interest of our customers and our company.”

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