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NJBPU Approves Rate Changes for South Jersey Gas

Safety and reliability initiatives progress; wholesale natural gas savings passed to customers

FOLSOM, N.J., September 22, 2017 – The New Jersey Board of Public Utilities today approved changes to several rate mechanisms for South Jersey Gas, a subsidiary of South Jersey Industries (NYSE: SJI). The rate changes are driven primarily by investments to improve safety, reliability, and service for customers, wholesale natural gas prices, and the Company’s Conservation Incentive Program.
As a result, a typical residential customer will see an average monthly increase of $0.97 or 1.2 percent on an annual basis, effective Oct. 1, 2017. Even with this increase, annual customer residential bills today are, on average, at their lowest levels in 10 years. The changes in rates resulted from three primary components.
First, the BPU approved a decrease in the cost of wholesale natural gas or Basic Gas Supply Service (BGSS). This reduction is driven by lower gas costs. The BGSS clause serves as a method to pass along increases or decreases in gas costs to customers; therefore, South Jersey Gas’ income is not affected by BGSS rate adjustments or credits.

“South Jersey Gas’ effective management of our supply portfolio allows us to pass those savings directly to customers,” said Dave Robbins, president of South Jersey Gas. “Lower costs continue due to the abundant supplies unlocked from the neighboring Marcellus shale.”
Robbins stressed that South Jersey Gas’ top priority is to operate a safe and reliable delivery system for customers. 

Second, the BPU approved an increase to South Jersey Gas’ Conservation Incentive Program (CIP).  The CIP encourages customers to use natural gas more efficiently and reduce consumption, and includes a weather adjustment mechanism to account for changes in usage. Since the CIP was introduced in 2006, South Jersey Gas’ customers have reduced their natural gas use by 69 billion cubic feet and saved approximately $693 million in energy costs. 

Third, the Company also received BPU approval to adjust its base rates to reflect approximately $81 million of infrastructure investments related to its Storm Hardening and Reliability Program (SHARP) and Accelerated Infrastructure Replacement Program (AIRP II).

Those SHARP and AIRP system improvements included replacing aging mains, ensuring compliance with state and federal system integrity and safety regulations, as well as fortifying the system in coastal communities against severe weather and flooding. Under the SHARP and AIRP II, the Company installed 174 miles of new mains and replaced more than 16,646 service lines since August 2014.

“We are extremely proud of our overall system improvements, and that those coastal communities’ service is better protected against future storms and saltwater intrusion,” Robbins said. 

Through AIRP II, South Jersey Gas will complete the accelerated replacement of all bare steel and cast iron mains in its system by 2021. As a result, the Company will achieve its safety and reliability goals within 12 years, as opposed to what would have taken 50 years under standard programs.

About South Jersey Gas

South Jersey Gas, subsidiary of South Jersey Industries (NYSE:SJI), delivers safe, reliable, affordable natural gas and promotes energy efficiency to approximately 381,000 residential, commercial and industrial customers in Atlantic, Cape May, Cumberland, Salem, and portions of Gloucester, Burlington and Camden counties in New Jersey. Visit www.southjerseygas.com to learn more about South Jersey Gas and its programs.

Media Contact Information

Media Relations:
Telephone: 609-561-9000 x4496

Investor Contact:
Dan Fidell (609) 561-9000 x7027

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