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SJG To Reduce Customer Rates

Posted on: Wednesday, 24 October 2007, 15:00 CDT

South Jersey Gas received approval from the New Jersey Board of Public Utilities to implement several company proposals resulting in a net rate decrease of 4.6% for residential heating customers, effective October 24, 2007. The net effect of the NJBPU's action will result in a decrease of $7.49 per month to a residential customer's bill of 100 therms.

The first proposal was a reduction to SJG's Basic Gas Supply Service charge. The BGSS is a mechanism to pass increases and decreases in the actual wholesale cost of gas paid by SJG directly to the utility's customers after being reviewed and approved by the NJBPU.

The NJBPU also approved SJG's initial charge under the Conservation Incentive Program. Last year, SJG received approval from the NJBPU to implement the pilot CIP, whereby SJG encourages customers to use natural gas more efficiently through education measures. Customers choosing to employ energy efficiency measures receive an immediate benefit of lower monthly bills. The program also benefits SJG by eliminating the link between profits and the quantity of natural gas sold. To the extent SJG may recover its lost margin due to reduced consumption from customers through the CIP, the company is also required to pass along BGSS cost reductions to those customers that will at least offset the CIP charge. In this case, the BGSS reduction more than offsets the CIP charge.

"In spite of the volatility in natural gas prices our management team has continued to identify opportunities in the marketplace to maximize savings to our customers," said South Jersey Gas President and CEO Edward J. Graham. "Additionally we have taken advantage of specific opportunities to restructure our gas supply portfolio to serve our customers at a lower cost while continuing the same degree of high reliability they've come to expect. As a result of SJG's efforts, we're able to reduce our BGSS rate for the second consecutive year," added Graham.

In addition, the NJBPU approved a small increase in SJG's Temperature Adjustment Clause charge. The TAC provided stability to SJG's earnings by normalizing the impact of colder-than-normal and warmer-than-normal weather during the winter season. The adjustment was applicable to prior years ending in September 2006, when the TAC was replaced by the CIP.

South Jersey Gas is the principal subsidiary of South Jersey Industries (NYSE:SJI) and provides natural gas service to over 332,000 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.

Source: Business Wire

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