New Jersey Natural Gas (NJNG) on Friday filed a request with the New Jersey Board of Public Utilities (BPU) seeking an increase of approximately $148 million to its delivery rates. The increase would cover primarily the cost of constructing, operating and maintaining its infrastructure, the company said.

“This adjustment will help NJNG recover these costs and continue to provide its customers with safe, reliable, resilient service,” NJNG says.

If approved, it would result in an overall increase of approximately 24 percent on the typical customer’s annual bill.

Under the proposed rate filing, the average residential customer using 100 therms a month would pay about $21.69 more per month. Delivery rates are the portion of the customer’s bill designed to cover NJNG’s delivery costs, including operating and maintenance expenses, as well as the cost of constructing its infrastructure, which includes the opportunity to earn a profit on investments in infrastructure used to provide service to customers. Typically, natural gas bills consist of two main parts — the delivery charges are the cost of delivering the natural gas and maintaining the delivery and other systems, and the Basic Gas Supply Service (BGSS) is the portion of the bill that goes toward purchasing the natural gas commodity itself. Utilities do not make a profit on the sale of the natural gas commodity, which is passed through to customers.

This filing, assuming the normal BPU review process, will not have any impact on this winter’s heating bills. In fact, during the heating season, the typical residential and small commercial customer’s bill is expected to be 17 percent lower on an annual basis as a result of a $76 million BGSS bill credit implemented by NJNG. The BGSS credit, which reflects lower natural gas supply costs, is in effect for natural gas usage between November 1, 2015 and February 29, 2016, and expected to save the average customer approximately $166 over the four-month period.

“Providing our customers with safe, reliable service is the most important thing we do,” said Laurence M. Downes, chairman and CEO of New Jersey Natural Gas. “The investments we make strengthen our system and provide greater resiliency to our customers and the communities we serve.”

“We have requested this increase so we are able to adequately meet the necessary future infrastructure investments to ensure the same safe, reliable service our customers expect and deserve,” Downes continued. “Customers should know that even with the proposed change their bills would still be 29 percent lower than they were when our last rate case was approved — thanks to the decline in wholesale natural gas prices.”

“NJNG has not filed a general request to increase delivery rates since 2007. Over that time, NJNG has worked hard to manage its business efficiently and effectively, employing capital and cost-control strategies that have helped avoid the need to file for a change to its delivery rates. The timing of this filing is driven by NJNG’s substantial capital investment in infrastructure over the past seven years, as well as the company’s agreement to file a rate case no later than November 15, 2015 in accordance with the BPU’s Order in the matter for approval of the Safety Acceleration and Facility Enhancement (SAFE) and New Jersey Reinvestment in Facility Enhancements (NJ RISE) programs.

NJNG’s capital investments are critical to its ability to ensure and enhance the safety and overall reliability of its operations. From 2008 through 2015, NJNG has invested approximately $806 million in its natural gas transmission and distribution system. This includes expenditures for customer growth, as well as system improvements, reinforcements, replacements and retirements.

Over the seven-year period, NJNG experienced an average customer growth rate of approximately 1.5 percent annually. These new customer additions necessitated the installation of new mains, meter services and other distribution facilities. Additionally, it has a number of ongoing capital projects, including SAFE and NJ RISE. Two other important projects include the Howell liquefaction project and the Southern Reliability Link (SRL). These projects will significantly strengthen NJNG’s system and provide greater reliability and resiliency to the customers and communities it serves.

The BPU-approved SAFE and NJ RISE programs are focused on the replacement of aged infrastructure and storm readiness efforts. Through SAFE, NJNG has replaced approximately 203 miles of unprotected steel and cast iron main and over 25,000 services. It is on track to replace a total of 275 miles of such facilities, and will have eliminated 100 percent of its cast iron main by the end of December 2015. NJ RISE is NJNG’s response to the BPU calling upon the state’s utilities to assess storm mitigation efforts in the aftermath of Superstorm Sandy. It is designed to improve the overall durability, resiliency, integrity and safety of NJNG’s infrastructure, making it less susceptible to extreme weather conditions.

In its filing, NJNG requested an extension of the SAFE program to replace approximately 276 miles of remaining unprotected steel main and associated services. If approved, this $200 million capital investment program will be completed over the five years subsequent to the resolution of the rate case and further enhance the safety of NJNG’s system, as well as benefit local and state economies.

NJNG’s Howell liquefaction project will improve the reliability of its peak supply and provide savings for customers through lower costs. Additionally, the facility will eliminate the need to truck in 700 deliveries of liquefied natural gas annually. The project is currently in the construction phase and expected to be operational by April 2016. The SRL, the 30-mile transmission pipeline project, will strengthen NJNG’s system by adding a second feed from a separate interstate supplier, thereby significantly enhancing its reliability and resiliency. NJNG has submitted its petitions to construct, operate and maintain the SRL with the BPU. Pending approval, the Company plans to place it into service by the end of 2016.

Under normal conditions, the BPU’s review of NJNG rate filing could take up to 10 months.”

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