While the promise of lower energy bills is often cited as one of the reasons to embrace shale development in the UK, shrinking energy prices have already become a reality for energy consumers in the state of New Jersey, USA, where the availability of cheap and abundant natural gas from the Marcellus formation, has allowed New Jersey’s Public Service Electric and Gas (PSE&G) to pass the savings on to their customers.
The state’s oldest and largest regulated gas and electric delivery utility announced last week that it is providing a bill credit for the next three months for its residential gas supply customers that will cut the average bill for the typical residential gas heating customer by about 31 per cent. The company will provide its residential customers who purchase gas supply from PSE&G a 28-cents per therm bill credit for usage during November, December and January.
A typical residential gas heating customer using 91 therms in November, 165 therms in December and 165 therms in January would see a total bill credit of approximately $118. Depending on meter reading schedules, many customers will see some of the credit in November, December and January with the remainder in February.
These bill credits are in addition to the reduction the utility has already put into effect on October 1, 2014, which reduced its gas supply rate to 45 cents per therm from 54 cents – its lowest rate in 14 years.
“Since 2009, PSE&G’s residential gas customers have benefited from steady reductions in the cost of natural gas,” said Jorge Cardenas, PSE&G vice president of asset management and centralized services.
“We’re able to provide additional savings this winter given the continued availability of low-cost gas from the nearby Marcellus Shale Formation in Pennsylvania. In addition, our transportation and storage capabilities and the way we manage our pipeline contracts have enabled us to seize this opportunity to once again reduce costs for our customers.
“While there’s no guarantee that these savings will be available in future years, we are pleased to pass them on to our customers as temperatures are dropping and they strive to keep their winter heating bills affordable,” Cardenas said.
PSE&G makes no profit on the sale of natural gas. The utility passes along what it pays for the gas to customers. Costs of natural gas supply account for about half of the customer’s monthly bill.
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