Low Prices Keep Natural Gas in NJ’s Energy Picture

Tom Johnson | January 26, 2012 | Energy & Environment
Plentiful gas supplies and a warm winter mean rebates for ratepayers

Here’s a reason why New Jersey’s energy policy may be shaped by natural gas, at least in the immediate future.

The nearly half-million customers of New Jersey Natural Gas will receive another credit next month on their utility bills. When combined with credits from the previous two months, the typical residential ratepayer will see their cumulative bills trimmed by a total of $206, from $558 to $353, a savings of 37 percent.

With supplies plentiful and the weather warmer than normal this winter, gas utilities have been handing out credits or rebates this winter like candy at Halloween, or so it seems.

Earlier this month, Public Service Electric & Gas said it would provide its own credit to customers’ bills in February, which will save customers about $30. It is the eighth credit its 1.8 million customers have received in the past 12 months, a trend that has saved the typical residential customer $614, or cut their bills by 35 percent.

The Christie administration views natural gas as playing a central role in the state’s energy future, a policy that New Jersey Resources, the owner of NJNG, hardily embraces. Other utilities do likewise.

The state’s recently adopted energy master plan backs developing new natural gas fired plants to drive down electricity prices, converting fleets of vehicles to natural gas, and upgrading and expanding the natural gas pipeline infrastructure in New Jersey.

In a state saddled with some of the highest electric bills in the nation, it is an argument likely to resonate with many consumers, especially those struggling to make ends meet.

“Natural gas is positioned to meet the country’s growing energy needs,’’ said Laurence Downes, chairman and chief executive office of New Jersey Natural Resources, citing the emergence shale gas, which has driven down prices from as high as $14 a dekatherm a few years ago to $2.60 yesterday.

“Shale gas over the last few years has really changed the game,’’ said Downes yesterday, in response to a question from a shareholder at the company’s annual meeting at the PNC Bank Arts Center in Holmdel. “As we look to the future, natural gas looks very bright.’’

That view is disputed by environmentalists who worry the discovery of vast shale gas deposits in the Marcellus Shale formations in Pennsylvania and upstate New York could lead to contamination of the drinking water supplies for 15 million people. They claim a controversial drilling technique, dubbed hydraulic fracturing or “fracking,’’ could pollute water supplies by the injection of billions of gallons of water and chemicals in an effort to extract the fuel.

Downes sought to deflect that concern when asked about it by another shareholder. “When you look at all the natural gas wells, fracking has been around this country for the last 60 years,’’ he said. “The debate is going to continue.’’

The environmental community also does not support the expansion of natural gas pipelines, some of which are cutting through national parks, watersheds that provide drinking water for millions, and state parkland. They insist there is enough supply to meet demand, and rather than expanding the use of a fossil fuel which contributes to global climate change, the state should focus its efforts on reducing energy consumption and cleaner sources of energy, such as solar power.

New Jersey Resources, while insisting natural gas is at the core of its business, also is heavily involved in conservation and solar, according to Downes. Its energy efficiency and conservation programs have saved its customers nearly three-quarters of a billion dollars, he said. It also has invested in solar, building nearly 10 megawatts of solar facilities around New Jersey.

The company also wants to help the state achieve its goal of increasing the use of alternative fuels to reduce dependence on oil. The Wall Township utility has submitted a filing with state regulators requesting approval to invest up to $15 million to build compressed natural gas vehicle refueling stations in Monmouth, Ocean and Morris counties at private and public facilities throughout its service territory.