New Jersey Natural Gas to raise rates due to spike in wholesale prices
New Jersey Natural Gas (NJNG) will implement a 5 percent increase for residential and some small business gas customers starting Feb. 1, 2019.
The increase is due to a spike in wholesale natural gas prices. The wholesale natural gas prices for the winter months of December 2018 through March 2019 have increased by as much as 44 percent. The potential for sustained cold weather this winter in a market with constrained access to supply and growing peak day demand has contributed to the price surge. The average residential heating customer using 100 therms a month will see their bill go from $96.57 to $101.40 effective Feb. 1.
“Colder winter weather has come early and is having a significant impact on wholesale natural gas prices,” Steve Westhoven, president and COO of New Jersey Natural Gas, said. “While we are committed to utilizing effective purchasing strategies to manage supply, mitigate market impacts, and serve our customers, we, unfortunately, have no control over wholesale natural gas market prices. Even with this BGSS (Basic Gas Supply Service) increase, customers’ bills are still roughly 40 percent lower than 2008.”
New Jersey’s utilities are allowed to implement rate adjustments of up to 5 percent in December and February to keep pace with any wholesale natural gas market trends. NJNG secured the price for the majority of its anticipated natural gas supply for the winter during the summer months when prices are typically lower. However, it is not sufficient to meet the increased demand and offset the impact of the higher prices.
