New Jersey Natural Gas Company files new pricing plan for distributed generation

WALL, N.J., Aug. 2. 2001 – New Jersey Natural Gas Company (NJNG), the principal subsidiary of New Jersey Resources Corporation (NYSE: NJR – news), filed with the New Jersey Board of Public Utilities (BPU) a new pricing plan for both residential and commercial customers using natural gas to fuel distributed generation (DG) technologies.

NJNG was the first in its state to propose a special DG pricing structure for residential customers.

For the past several years, NJNG has supported the development and deployment of DG technologies because of the large-scale benefits these on-site electric generators can deliver. As products including natural gas-fired microturbines, reciprocating engines, full-scale turbines and fuel cells enter the market, NJNG is supporting customers in their ability to make informed decisions about these new technologies.

“The proposed pricing structure will help us advance DG technologies as another alternative to meet customers’ electric needs,” said Laurence M. Downes, chairman and CEO of NJNG. “The new pricing plan, combined with the rebates now available under the state’s Comprehensive Resource Analysis program, will allow customers to see an earlier return on their investment in alternative energy sources.”

The Company believes that broader use of DG can offer several opportunities by working in conjunction with traditional grid-powered electricity. “DG can help electric utilities improve their system reliability during times of peak demand,” said Downes. “Also, since most DG technologies use natural gas, companies like ours can improve the overall efficiency of their distribution systems. Longer term, as DG products gain greater acceptance, customers may see lower prices for both electricity and natural gas. They can also gain improved power quality and reliability, increasingly demanded in the Information Age.”

Microturbines, reciprocating engines and fuel cells are all part of the DG family and are fast becoming viable alternate energy choices for business customers who want clean, cost-effective power and require a high level of reliability. NJR installed one of the first commercially available models of the Capstone MicroTurbineà¢â€ž- in April 1999 and added a second unit last year. The units operate 24 hours a day, seven days a week, using natural gas to generate a portion of the electricity required to power NJR’s headquarters in Wall, New Jersey.

DG’s environmental benefits have also been cited as an advantage. For instance, a typical four bedroom home that uses a fuel cell for power can achieve the same environmental benefits as taking two cars off the state’s highways. “You can see why we’re excited about the potential of DG to radically redefine the energy industry,” said Downes.

According to Blossom Peretz, New Jersey’s ratepayer advocate, “The office of the Ratepayer Advocate, as well as state and federal officials and commissions across the country, are studying the importance and benefits of distributed generation as an alternative source of energy.”

NJNG’s DG plan proposes different prices for residential and commercial customers, and the potential savings vary depending on volume and season of consumption. The load characteristics of DG provide the opportunity to offer a rate lower than NJNG’s traditional sales service.

NJNG has been working with a number of customers interested in DG systems. Beta Realty will be installing a number of reciprocating engines at a northern New Jersey facility sometime before October, and NJNG will be running the natural gas service to support the generation. Brian Archibald, general manager of Beta Realty said, “Reliability, consistency of power and cost savings were major factors in our decision to go with DG.”

NJNG’s pricing plan was filed with the BPU last week. The Company is hopeful that action will be taken by the end of the year. In the meantime, NJNG, through its Natural Solutionsà¢â€ž- program, is reaching out to a broad range of DG manufacturers and suppliers to help educate customers and increase the awareness of DG as a reliable energy source. “We look forward to moving ahead with our efforts and working collaboratively with the state’s regulators on this important issue,” said Downes.

New Jersey Natural Gas Company (NJNG), one of the fastest-growing local distribution companies in the United States, is the principal subsidiary of New Jersey Resources Corporation. Since 1952, natural gas customers in central and northern New Jersey have relied on NJNG to keep them warm and ensure they have the energy they need to run their homes and businesses. NJNG provides energy services to over 420,000 residential, commercial and industrial customers in New Jersey’s Monmouth and Ocean counties and parts of Morris and Middlesex counties, maintains an underground pipeline system of approximately 6,000 miles and has added nearly 12,000 new customers annually for the past six years. NJNG is also a leader in the off-system sales and capacity release markets. More information about NJNG can be accessed through its Web site at www.njliving.com

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