VICTOR EPSTEINNEWARK, N.J. (AP) ¿ New Jersey utility regulators approved the largest reduction in natural gas prices in state history Wednesday. The state Board of Public Utilities voted unanimously to share the savings from lower wholesale rates with retail consumers. The lower prices are effective immediately and are expected save the typical household $262 to $477 a year ¿ a reduction of 23 percent to 37 percent. "These are significant rate reductions that will provide immediate relief for customers struggling with the effects of the worldwide economic downturn," said Jeanne Fox, president of the state board that regulates utility rates. The savings come as consumers deal with the most severe U.S. economic contraction since The Great Depression. Demand for coal, natural gas and oil has fallen as factory work has slowed and consumers have grown thrifty. The mild summer and prospect of a warm winter also have played into fuel supply and demand. A typical New Jersey home that uses 1,000 therms of natural gas ¿ a standard measure of heat ¿ paid between $1,671 and $1,743 last year.
PSE&G, the state's largest utility, will charge 89 cents a therm as a result of Wednesday's vote, compared with $1.19 in October. That translates into a $262 annual savings for a typical home. Three smaller natural gas utilities in New Jersey adopted similar reductions. Customers of Elizabethtown Gas Co., a subsidiary of AGL Resources, are expected to save $477 on gas annually, compared to 2008. South Jersey Gas Co., a subsidiary of South Jersey Industries Inc., customers are expected to save $325, and New Jersey Natural Gas Co., a subsidiary of New Jersey Resources, customers are expected to save $365. "This is the biggest rate reduction for natural gas in New Jersey history," said Jerry May, director of the Division of Energy at the state Board of Public Utilities. "This will be felt in the coming winter." The overall reductions also reflect smaller cuts made earlier this year. The reductions approved Wednesday will save natural gas customers more than $500 million a year, according to the board.
"It's good news for all of us," board member Fred Butler said. Consumers are also in line for additional energy savings next year, when the board resets electricity prices because utilities are paying less for the fossil fuels they use to generate electricity. May said it's likely that electricity prices will decline when the board auctions off the right to sell power to residents and businesses for the next three years in February. Those savings won't show up until June. The Energy Information Agency expects wholesale electricity prices in the U.S. to decline through the end of this year. The shift began last year, when power consumption fell 1.6 percent. Government forecasters see consumption falling another 2.7 percent this year. "Lower wholesale gas prices are one consumer benefit of today's tough economic climate," said PSE&G Vice President Mark Kahrer. "Our customers can certainly use this good news."