South Jersey Gas, subsidiary of South Jersey Industries (NYSE:SJI), filed a petition today with the New Jersey Board of Public Utilities to expand a program it began in 2009 as a way to help stimulate the economy while also boosting the efficiency, reliability and safety of its natural gas system.
“Since we began our infrastructure investment program in 2009, SJG has spent approximately $180 million to enhance the performance and safety of our system, create jobs and support the local economy,” said Jeffrey E. DuBois, president of South Jersey Gas. “The program proposed in this petition serves as a natural extension of that program and we look forward to continuing our work with the NJBPU and the Division of Rate Counsel to further advance our system’s safety and reliability,” he added.
As part of its newly proposed Accelerated Infrastructure Replacement Program, SJG plans infrastructure improvement projects over the next five years totaling approximately $250 million that are incremental to the company’s normal capital projects scheduled over that same time period. These expenditures will focus on the replacement, on an accelerated basis, of aging cast iron and bare steel infrastructure. SJG plans to spend $50 million per year to perform this work.
The company would be able to recover the costs associated with these improvements through annual rate adjustments. As part of the program, SJG would be able to earn a return of and a return on these infrastructure investments.The program is expected to result in an initial increase of approximately 0.7 percent to the average residential customer’s monthly bill, which would not take place until October 2013. For a customer using 100 therms of gas in a month, that increase translates into approximately $0.96 per bill. SJG expects current historically low natural gas prices to remain stable in the near term due to the availability of Marcellus Shale gas, which could offset the potential increase.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts