Public Service Electric and Gas Company ("PSE&G"), a
subsidiary of
Public Service Enterprise Group Inc.
(
PEG
), has made a filing with the New Jersey Board of Public Utilities.
In the filing, the company has requested the Board to lower the
winter natural gas bills additionally by 5.2% per month for its
residential customers. If approved, the proposed gas rate reduction
will be effective from October 1, 2012.
Per the request, a typical residential customer that utilizes
160 therms of natural gas in a winter month, or 1,050 therms per
year, will save $9.08 per month amounting to annual savings of
$59.56.
If the appeal is granted, it would mark the ninth consecutive
rate decrease since 2009 bringing cumulative savings to $674. Due
to plummeting market prices for gas, the company had lowered its
residential gas bills for the eighth time for a typical residential
customer by 4.6%, or approximately $8.53 per winter month, in
November 2011. As a result, effective from December 2011, a typical
residential gas customer had to pay a monthly bill of $173.97.
Additionally, as a result of the February Basic Generation
Service auction that has been approved by the Board of Public
Utilities, a reduction in electricity prices has come into effect
immediately. Consequently, a typical PSE&G residential electric
customer's monthly summer bill will be down 2.8% or $3.90 to
$138.67. Yearly, it will be decrease by $49.52 or 3.6%.
A rate decrease is undoubtedly good news for the customers. The
company asserts that it sells natural gas without making any
profits. Also, we are encouraged by Public Service Enterprise
Group's robust portfolio of regulated and non-regulated utility
assets that offer a steady earnings base and significant long-term
growth prospects. Going forward, we expect the company's growth to
be driven by a low-cost nuclear fleet, assumed rate relief and
added generating capacities.
However, the increasing cost of coal, higher pension &
financial costs, and power-price volatility are areas of concern.
The company presently retains a short-term Zacks #3 Rank (Hold)
that corresponds with our long-term Neutral recommendation on the
stock.
Based in Newark, New Jersey, Public Service Enterprise Group is
a diversified utility holding company. Its operations are mostly
located in the Northeastern and Mid-Atlantic parts of the
U.S. Some of its main competitors are
Consolidated Edison Inc.
(
ED
) and
FirstEnergy Corp.
(
FE
).
CONSOL EDISON (ED): Free Stock Analysis Report
FIRSTENERGY CP (FE): Free Stock Analysis Report
PUBLIC SV ENTRP (PEG): Free Stock Analysis
Report
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