The cost of heating a house with natural gas is rising sharply this winter, ranging from $21 a month to as much as $31 per month, depending on which of the state’s four gas utilities supply the fuel.
In unanimously approving the provisional increases that are effective next month, New Jersey Board of Public Utility commissioners blamed global geopolitical events for the spike without mentioning the obvious — the Russian invasion of the Ukraine and its cutoff of most gas supplies to western Europe.
Higher commodity prices also factored into why customers will pay more, as did increases in transmission costs on interstate pipelines. The four utilities do not make a profit on purchasing gas, only on delivering it to customers through their local distribution systems.
Timing is everything
Nevertheless, the higher bills come at a time when consumers are paying more for food, gasoline and other energy bills
“These steep increases are really going to hurt,’’ said Eveyn Liebman, an associate director of AARP in New Jersey, citing higher inflation and higher cost of living in the state. “This is only going to make life worse for people already facing hard times.’’
Here is how much more the typical residential customer will pay: For New Jersey Natural Gas, monthly bills will rise $21.01 or 15%; for Public Service Electric & Gas, monthly bills will rise $24.77 or 24%; at Elizabethtown Gas, customers will pay $25.33 more or 22% each month; and South Jersey Gas customers’ bills will increase $31.49 monthly or 18.6%.
Those increases could exacerbate ratepayers’ ability to pay their bills, already high by some accounts. For example, at PSE&G, the average residential bill is now about $101 per month; for South Jersey Gas, it’s about $169 each month.
Do the math
“It’s simple math,’’ said Brian Lipman, director of the New Jersey Division of Rate Counsel. “More people are going to have trouble paying their bills. That is a hefty increase.’’ It already is a problem for just under 1 million utility customers who are still in arrears following the economic slowdown caused by the COVID-19 pandemic.
The boost in natural gas prices also will increase what customers pay for electricity, since the fuel generally sets the wholesale price for electricity, according to Lipman. “It won’t be as dramatic as we see here though,’’ he said.
PS&EG attributed the spike in gas prices to a 200% increase in gas prices. World events and increased demand have led to significant volatility in the natural gas markets, according to Rebecca Mazzarella, a spokeswoman for PSE&G.
“The war in Ukraine is definitely a factor,’’ Lipman said.
No matter the causes, Liebman argued the spike in energy costs ought to force the BPU to explore expanding the energy assistance program the state has to help customers pay their bills. As a result of the health emergency, the state expanded who can apply for assistance, according to BPU President Joseph Fiordaliso.
Fellow BPU Commissioner Bob Gordon said the rising costs of fossil fuels creates an incentive to move more aggressively on expanding efforts to reduce energy usage and energy assistance programs. “It is further evidence we have to move in the direction of clean energy,’’ he said.
Natural gas is an inherently volatile commodity whose bottom line is bad for the planet, according to Doug O’Malley, director of Environment New Jersey. “Rising gas prices are the exact reason why we need to enhance building electrification,’’ he said.
