NJ To Pay More For Heat As State Approves Gas Rate Hikes for Millions

NEW JERSEY — As inflation continues to take its toll, millions of New Jerseyans will also see higher heating bills. Many residents will pay higher rates on natural gas after state regulators unanimously approved rate hikes of up to 25 percent after energy companies argued that rising costs have forced them to raise prices.

PSE&G received approval for the largest rate increase at 24 percent. The energy company is New Jersey's largest utility, with 1.9 million gas customers. The average residential bill for PSE&G is currently about $101 per month.

The New Jersey Board of Public Utilities OKed rate hikes for four different utility companies at Sept. 7's meeting:

• PSE&G (monthly bills will increase by $24.77, or 24 percent)
• New Jersey Natural Gas (up $21.01 per month, or 15 percent)
• Elizabethtown Gas (up $25.33 per month, or 22 percent)
• South Jersey Gas (up $31.49 per month, or 18.6 percent)

The new rates go into effect Oct. 1, as rising living costs remain a concern for New Jerseyans. Nationally, inflation slowed down in August for the second-straight month, but prices remained 8.3 percent higher than the prior year, according to the federal Consumer Price Index report.

The utility companies have argued that rising costs in natural gas forced them to increase rates.

"World events and increased demand have led to significant volatility in the natural gas commodity markets, putting upward pressure on the supply chain," a spokesperson for PSE&G told northjersey.com.

The spike in natural gas prices, which reached their highest levels since 2008, features several factors at play. The oil, fuel and coal markets hit turbulence amid the international fallout of Russia invading Ukraine.

Russia slashed natural gas flows to Europe in response to Western sanctions. The United States responded by increasing exports of liquefied natural gas to Europe but hasn't added enough capacity to meet the export demand, which has sparked a price surge for Americans, as well, according to Reuters.

The United States also endured scorching temperatures this summer, which forced Americans to crank up air conditioning. This hurt inventory levels more, but U.S. oil and gas companies have been spending less on expensive drilling projects and more on dividends and buybacks for shareholders.

"We need more U.S. natural gas production," Rob Thummel, senior portfolio manager at Tortoise Capital Advisors, told CNN Business. "The production levels are too low."

Watch Sept. 7's Board of Public Utilities meeting below: