Thursday, April 21, 2016

Mayors battle New Jersey Natural Gas rate hike

The chorus against a proposal by New Jersey Natural Gas to raise bills by 24 percent is in the middle of a crescendo.

A group made up of Jersey Shore mayors, local businesses and consumer and business groups held a news conference Wednesday to criticize the proposal and the Wall-based utility.

"As mayors we have to balance our budget every year and we always have to live within our means," said Belmar Mayor Matt Doherty, who brought the group, called the Say No to 24 Coalition, together in front of Federici's on 10th in Belmar. "If we ever thought about a 24 percent increase in property taxes ... you would be reading about us in our most recent obituary, both politically and realistically."

MORE: AARP slams proposed NJ Natural Gas rate hike

The proposal by New Jersey Natural Gas, which still must undergo regulatory hearings before an administrative law judge and be approved by the state Board of Public Utilities, would raise monthly heating bills by more than $21 on average. The utility said it will pay for improvements and maintenance of its natural gas distribution system.

The utility wants to raise its delivery rate, which covers its cost of operations and provides its profits, by almost $148 million.

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If approved, monthly bills for a customer using 100 therms would rise by $21.69, up to $117.91 a month from $96.22, an increase of 22 percent. The increase is approximately 24 percent for a year's worth of bills, jumping from $987.70 to $1,215.10. The utility said that even if the proposal is approved as submitted, customers' bills would still be 29 percent lower than in 2008, the last time the utility won approval for a rate increase. The difference was a result of lower natural gas prices.

EDITORIAL: Utility’s rate-hike request an outrage

Since 2008, the utility said it has spent about $806 million on its natural gas distribution and transmission system, including the replacement of 203 miles of unprotected steel and cast iron main and 25,000 service lines and meters and the installation of natural gas feeds and excess-flow valves, which will cut off service if there is a break in the line, to improve the resiliency of the system.

In a statement, New Jersey Natural Gas spokesman Michael Kinney said about 94 percent of the utility's request is related to its "substantial infrastructure investments, as well as costs associated with superstorm Sandy and other pipeline integrity programs. The rest covers the cost to run our business."

Brick Mayor John Ducey said the increase would leave residents with less money to spend on businesses, and hit senior citizens even harder. "The concerns they have isn't as small as I am going to spend one less meal a week, or something, out," he said. "It's more of what bill am I not going to pay."

It's excessive, he said. "It's too much for the middle class, too much for our senior citizens," Ducey said.

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The group has targeted the compensation of executives at New Jersey Resources, the parent company of New Jersey Natural Gas. The top five executives received nearly $13 million in compensation in 2015, up more than 125 percent from two years earlier, Doherty said. It makes the proposed increase "really outrageous and unacceptable," he said.

"We're talking about Wall Street salaries to manage the smallest gas utility in the state of New Jersey while asking small business owners, senior citizens and middle class families to pay 24 percent more in their gas rate," Doherty said. "Natural gas is not a luxury. It is not a privilege for us to have."

Kinney said executive incentive compensation is not included in rates.

"The idea that NJNG’s rate filing is driven by executive incentive compensation is false and not supported by any fact," he said in a statement. "What it was driven by was the strong performance of one of New Jersey Resources’ unregulated subsidiaries and is not paid for in any way by ratepayers."

Mike Federici, owner of Federici's in Belmar and Freehold, said he figures his natural gas bill will go up about $3,600. "It is not something that can be passed along to the customer," he said. Instead, it will cut his company's profits. "It's just the way it goes," he said.

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Belmar resident Ellen Ramey, 80, disagreed with efforts by the utility to raise rates. "I think it is truly unfair for them to raise the gas prices for senior citizens living on a fixed income," she said.

Last week, AARP New Jersey said it would fight the increase. Of particular concern was a move to collect money to pay for the utility's controversial Southern Reliability Link high-pressure gas transmission pipeline, which has not yet been built, and an 118 percent increase in the utility's monthly customer service charge, which will rise from $8.25 a month to $18.

The public can have their say about New Jersey Natural Gas' proposal at two public hearings. The first set is at 4 p.m. and again at 5:30 p.m. April 19 at the Rockaway Township Municipal Building, 65 Mount Hope Road, Rockaway Township, and the second is at 4 p.m. and again at 5:30 p.m. April 27 at the Freehold Township Municipal Building, 1 Municipal Plaza-Schanck Road, Freehold Township.

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