Public Service Electric and Gas Co. on Oct. 4 said it has reached a deal to keep bills for its residential gas and electricity customers stable.
The Public Service Enterprise Group Inc. subsidiary in January filed its first base rate review in eight years, asking the New Jersey Board of Public Utilities to increase electric and natural gas delivery rates by 1%. The proposal would have added about $19.70 a year to the combined electric and gas bill of a typical PSE&G residential customer.
The utility said the agreement provides for a net $13 million reduction in annual revenues after factoring in benefits from federal tax reform and other tax effects. If approved, PSE&G would get an additional $212 million in annual revenues — including recovery of storm costs that had been deferred until now — but return $225 million in tax savings due largely to tax reform.
PSE&G President and COO Dave Daly in a statement said the agreement is "good news" for customers, who continue to benefit from the company's efforts to control costs along with lower taxes PSE&G is now paying.
"We're also pleased that we can keep bills essentially flat and at levels that are about 30% lower than they were a decade ago, and more than 40% lower when adjusted for inflation," he said.
Should the board approve the agreement, PSE&G said a typical combined residential electric and gas customer can expect a reduction of 0.1%, or nearly $2, per year. Commercial and industrial electric customers on average will see no bill change, while gas customers on average will see a reduction of 1% to 2%.
PSE&G said thus far in 2018, customers have seen $262 million in annual rate reductions to reflect savings from federal tax reform enacted in 2017. As part of the rate settlement, PSE&G will provide an additional one-time $39 million credit to customers in November and December.
The settlement reached with staff of the board, the New Jersey Division of Rate Counsel and other parties in the case provides for a distribution rate base of $9.5 billion, a return on equity of 9.6% and a 54% equity ratio.
An administrative law judge will review the settlement before sending it to the board, which will consider the deal on Oct. 29. If approved by regulators, new rates would take effect on Nov. 1.