Once again, this winter is shaping up to be a season where natural gas customers can expect to pay less or about the same to heat their homes.
In annual filings with the New Jersey Board of Public Utilities, the state’s four gas utilities proposed cutting rates by as much as 5.2 percent beginning in October, the latest in a series of declines that have saved some customers as much as $674 since January 2009.
The steep drop in natural gas prices has been spurred by increased production of natural gas in neighboring Pennsylvania and other areas, largely a result of the discovery of new supplies of the fuel in the Marcellus Shale formation in the Keystone state and elsewhere.
With gas supplies plentiful and the weather milder than normal, customers have been benefitting from a drop in the price they pay for the fuel, and also from bill credits and rebates because the cost of the commodity keeps dropping.
The gas utilities are required to file their new tariffs for the winter season by June 1, but the rates are not acted on by the BPU until September, typically. In those intervening weeks, the price of the fuel has continued to decline, requiring some companies to give customers either bill credits or rebates.
For instance, New Jersey Natural Gas has issued $90.7 million in bill credits to residential and small commercial customers during the past winter, which equates to $207 for the average residential heating customer.
Public Service Electric & Gas, the state’s biggest gas company with 1.8 million customers, proposed the biggest rate reduction, one that would lower bills for the typical residential customer by 5.2 percent. The typical residential customer will save $59.56 annually, if the proposal is approved by BPU as is customary. The utilities do not make any profit on the gas they purchase for customers’ use, earning their return on the cost of it delivering to the home or business.
“These reductions are certainly good news for our customers, who are continuing to benefit from the lower costs of natural gas,” said Dave Daly, vice president of asset management and centralized services. “We’re pleased to pass along these savings at a time when the economy is still challenging our customers.”
Elizabethtown Gas customers could see their bills dip by an average of 2.3 percent, according to the utility. The reduction would lower the average residential customers’ bill by $2.61 a month.
NJG customers will pay about 2.4 percent more because of an increase in a program designed to promote conservation and energy efficiency practices. Still, the Wall Township utility said its customers would pay less this winter than last year because of a price reduction that went into effect last April. Because of that the typical residential customer will pay about 1.2 percent less than last fall, or $1.49 less each month.
South Jersey Gas said its customers would see about a 1.1 percent drop in gas prices this winter, reflecting a $1.44 dip in their monthly bills.
“With wholesale gas prices at historic lows, we are pleased to offer another overall rate reduction to our customers,” said Jeffrey DuBois, president of South Jersey Gas.
The low natural gas prices are reaping other benefits to consumers, too. Because much of the state’s electricity is produced by natural gas, the low prices are reflected in lower electric bills. For a typical PSE&G customer, the utility said it would save them $49.52 on an annual basis, a 3.6 percent reduction.