NJ Natural Gas Request For 24 Percent Rate Increase Ripped

A request by New Jersey Natural Gas for a 24 percent increase in its delivery rates to cover the cost of infrastructure upgrades -- including the controversial pipeline in the Pinelands -- is being blasted by legislators, an environmental group, and AARP.

New Jersey Natural Gas made the request to the state Board of Public Utilities in November. The request would add $21.69 per month to the bill of the average residential customer using 100 therms a month, according to a news release from the company.

"Delivery rates are the portion of the customer’s bill designed to cover NJNG’s delivery costs, including operating and maintenance expenses, as well as the cost of constructing its infrastructure, which includes the opportunity to earn a profit on investments in infrastructure used to provide service to customers," the news release said.

Utilities do not make a profit on the sale of the natural gas commodity, labeled "Basic Gas Supply Service" on bills, which is passed through to customers.

But state Senator Jim Holzapfel and Assemblymen Dave Wolfe and Greg McGuckin, who represent the 10th District, say the increase will have crippling effects on Ocean County residents, especially senior citizens.

"Many of the constituents in our district, senior citizens in particular, live on fixed incomes and this proposed rate hike will create another unnecessary financial burden for those struggling to make ends meet," the three said in a letter to BPU President Richard Mroz. "We also oppose the proposal to raise the customer service charge by 118 percent. This increase is not based on usage thus taking away and drastically limiting the customer’s ability to control the cost of their bill."

The Sierra Club also has criticized the proposal, saying its primary purpose is to fund the Southern Reliability Link pipeline. The 30-mile, 30-inch pipeline would begin in Chesterfield, Burlington County and run through the Pinelands to the shore to connect to the utility system in Manchester .

The Sierra Club has vigorously opposed the pipeline, which was approved by the Board of Public Utilities in January.

“This pipeline is threat to communities and public safety, yet NJNG wants the people to pay for it,” Jeff Tittel, Sierra Club executive director, said in a news release from the organization. The Sierra Club says the pipeline is "only part of the bigger push for fracking and dirty infrastructure."

The Southern Reliability Link would connect to the Garden State Expansion compressor station in Chesterfield, the Sierra Club says, adding Transco has not yet received federal approval to build the compressor station.

“NJNG wants ratepayers to pay to build this pipeline before Transco has gotten FERC approval for the Garden State Expansion compressor station. What if they build this pipeline but then don't get FERC approval for the GSE? We will be stuck with a pipeline that goes nowhere. We will have paid money to do nothing other than ruin the Pinelands,” Tittel said.

NJNG says it has spent more than $806 million on infrastructure since 2008, replacing 203 miles of unprotected steel and cast iron main and over 25,000 services, and expected to replace a total of 275 miles of such facilities, and it eliminated 100 percent of its cast iron main by the end of 2015, according to news releases.

The company, in its news release announcing the rate increase request, said it has not requested a delivery rate increase since 2007, and said customers' bills will still be 29 percent lower than they were in 2008, because the price of natural gas has fallen so much.

"Providing our customers with safe, reliable service is the most important thing we do,” said Laurence M. Downes, chairman and CEO of New Jersey Natural Gas. “The investments we make strengthen our system and provide greater resiliency to our customers and the communities we serve.”

“We have requested this increase so we are able to adequately meet the necessary future infrastructure investments to ensure the same safe, reliable service our customers expect and deserve,” Downes said.

"As a utility company it is the utility’s job to maintain and provide adequate and safe service for its customers. This includes investing in infrastructure like the pipeline connecting to Manchester utility’s system without shifting that burden to the ratepayer," Holzapfel, Wolfe and McGuckin said in their letter to Mroz.

There are public hearings on the requests scheduled in the next few weeks.

On April 19, there will be hearings at 4 p.m. and 5:30 p.m. at the Rockaway Township Municipal Building, 65 Mount Hope Road, Rockaway Township.

There will be a second set on April 27, again at 4 p.m. and 5:30 p.m. at the Freehold Township Municipal Building, 1 Municipal Plaza-Schanck Road, Freehold Township.