New Jersey Resources'NJR subsidiary New Jersey Natural Gas ("NJNG") announced New Jersey Board of Public Utilities' ("BPU") approval to decrease its Energy-Efficiency (EE) rate. The net effect of this rate change will result in an overall annual decrease of $13.40 or 1.3% in the EE rate.
The current drop in rates comes in addition to 0.7% reduction to the customers' bill approved by the commission in September 2017. The new reduced rate is expected to come into effect from Nov 1, 2017. Notably, NJNG's makes investment in energy-efficient equipment upgrades and whole-house improvements through The SAVEGREEN Project (SAVEGREEN).
Energy Efficiency Through SAVEGREEN
NJNG launched The SAVEGREEN Project (SAVEGREEN) in support of its ongoing efforts to provide customers with the knowledge and money-saving incentives to make the right energy choices for families, homes, businesses and communities.
Through The SAVEGREEN Project, launched in 2009, the company provides rebates up to $500 to customers for installing gas furnace, gas boiler, or a gas water heater in their homes and for other purposes. Though the program, over 49,000 customers have benefited from energy-efficiency upgrades and resulted in economic gain worth millions in New Jersey.
Effect of the Rate Drop
Although weather can sometimes prove to be a headwind for the utility operators, it plays a vital role in driving demand for the utility services. A mild winter and cool summer reduces the demand for utilities. However, a normal winter and summer season assures higher demand for the same.
As such a drop in the EE rates will ensure NJNG remains committed toward helping customers to lower their bills as much as possible heading into the winter season. With colder temperatures, customers are likely to increase heating activities, like installing additional heat and hot water systemsthereby driving the demand for gas.
The company is able to pass on the benefits of lower costs of production to its customers through the SAVEGREEN Project. With the aforementioned rate drop, a typical residential heat customer using 1,000 therms of energy annually will see their bill decrease from $1,062.88 to 1,056.78 per year, a savings of $6.10 or 0.6%.
New Jersey Resources' shares have rallied 36% in the last 12 months, outperforming the industry 's gain of 17.5%.
Zacks Rank & Other Stocks to Consider
New Jersey Resources carries a Zacks Rank #3 (Hold). Some other top-ranked stocks from the same space worth considering are MDU Resources Group, Inc. MDU . ONEOK, Inc. OKE , Spire Inc. SR all of which carry a Zacks Rank #2 (Buy).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
MDU Resources delivered a four-quarter average positive surprise of nearly 0.3%. Its 2017 current quarter estimates have risen by four cents to 50 cents per share in the last 90 days.
ONEOK delivered a four-quarter average positive surprise of 2.7%. Its 2017 current year estimates have risen by 3.8% to $1.65 per share in the last 30 days.
Spire delivered a four-quarter average positive surprise of 1.8%. Its 2017 current year estimates have risen by four cents to $3.57 per share in the last 90 days.
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