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Lower Heating Bills This Winter Due to More Than Just Cheaper Natural Gas

While plentiful supplies are helping to drive down costs to consumers, smarter management and storage are also contributing to lower prices

richard mroz
Credit: Governor's Office/Tim Larsen
Richard Mroz, president of the state's Board of Public Utilities

Consumers will pay less for natural gas this winter, since the state has approved new rates for utilities beginning next month.

The decline in the price of the fuel continues a trend in which costs have dropped dramatically in recent years, largely because of ample supplies of cheaper gas found in the Marcellus Shale formation in neighboring Pennsylvania and other states.

In approving the new rates on Friday, New Jersey Board of Public Utilities officials also credited policies adopted by the state that encourage gas companies to more effectively manage supplies and storage and pass on savings to customers.

“The reductions reflect changes in the prevailing market,’’ said Jerry May, director of the BPU’s Division of Energy, referring to what he called the “boatloads of supplies in neighboring states. “It’s more than just market forces making this happen.’’

For residential customers, the saving range from $52.52 a year for those served by Public Service Electric & Gas to $152.71 annually for those served by South Jersey Gas. The yearly savings for customers at New Jersey Natural Gas will amount to $140.20, and $84.20 at Elizabethtown Gas.

“Lower wholesale gas prices, coupled with effective gas-supply portfolio management, are the primary drivers of this reduction in rates,’’ said Jeffrey DuBois, president of South Jersey Gas.

“It is a significant reduction,’’ said BPU President Richard Mroz, noting the drop also reflects a decline in a special rate in a program designed to help customers conserve how much fuel they use. It also comes despite the BPU allowing South Jersey Gas to recover $36 million in investments in making its system more resilient, he said.

“All and all, today is a good day for the ratepayers of New Jersey,’’ said BPU Commissioner Joseph Fiordaliso.

The latest reductions reflect a trend that has been going on for some time. At South Jersey Gas, annual residential customer bills are on average nearly 30 percent lower than they were 10 years ago, DuBois said. At PSE&G, residential gas bills have decreased by 47 percent since 2009, according to Brooke Houston, a spokesman for the company.

“Natural gas prices have dropped significantly, and we are pleased to pass on our cost savings to our customers,’’ Houston said.

The state’s gas utilities do not make any profit on the gas they purchase for customers, instead earning money on the fuel delivered to homes and businesses. The utilities originally filed for the new rates in late May and early June.

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