SJG to Reduce Rates by 20.2%

Effective today, SJG will implement a Basic Gas Supply Service rate decrease of $0.22 per therm, or 13.3 percent, for residential heating customers. In addition, a credit of approximately $20 million will be applied to their October bills. The credit equates to a 5 percent reduction. Also effective today is a reduction in SJG's Conservation Incentive Program rates, granting a $0.03 per therm, or 1.9 percent rate reduction.

As a result of these BGSS and CIP rate changes, a residential heating customer will save $25.42 on a 100-therm monthly winter natural gas bill and will receive a BGSS credit of approximately $68 in October.

The BGSS clause serves as a method to pass along increases and decreases in gas costs directly to customers; therefore, SJG's income is not affected by BGSS rate adjustments. The company is able to provide the rate reduction and credit for two reasons. First, SJG received approval to release pipeline capacity, the cost of which was previously paid by customers. Second, the cost of natural gas is lower now than a year ago. Natural gas prices in 2008 were about $11 per dekatherm compared with the current price per dekatherm of about $3. SJG forecasts commodity prices remaining in the range of $4 to $6 over the next year.

Edward J. Graham, president and CEO of SJG stated, "We monitor natural gas prices daily and were able to secure lower priced gas, giving us the ability to provide a rate reduction and credit this year. We chose to split the reduction and provide a bill credit during October rather than spreading the entire reduction over a 12-month period. Receiving a lump sum credit will result in many customers having a very minimal payment or no payment at all in October, which will allow them to use their money for other expenses." Graham added, "SJG's BGSS rate has not been this low since 2003."

In October 2006, the NJBPU approved SJG's pilot CIP program, which encourages customers to use natural gas more efficiently by educating them about measures they can take to reduce natural gas consumption. The program also benefits investors by eliminating the link between the company's profits and the quantity of natural gas it sells. The proposed reduction in the CIP rate is due to winter weather impacts on revenue. Since the inception of the CIP program, customers saved approximately $122.2 million and almost $39.2 million of SJG's net income was protected.

South Jersey Gas is the principal subsidiary of South Jersey Industries (NYSE:SJI) and provides natural gas service to more than 340,000 residential, commercial and industrial customers in Atlantic, Cape May, Cumberland, Salem, and significant portions of Gloucester, Burlington and Camden counties in New Jersey. Visit http://www.southjerseygas.com to learn more about South Jersey Gas and its programs.

SOURCE: South Jersey Gas

South Jersey Gas 
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