Pilot Natural Gas Project in New Jersey

Written By Thomas Ponco on Monday, June 18, 2012 | 9:30 PM

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Published June 19, 2012

By Philippe Crowe

New Jersey Natural Gas (NJNG) yesterday received approval from the New Jersey Board of Public Utilities (BPU) to implement a pilot program to help stimulate the market for natural gas vehicles (NGV) in the state and the benefits they provide.

Under this program, NJNG will invest up to $10 million over the next 12 months to build between five and seven compressed natural gas (CNG) refueling stations at host facilities throughout its service territory. The use of NGVs, particularly for commercial fleets, will help reduce emissions and is being touted as providing a viable and economically valuable alternative to traditional petroleum-based vehicles.

The need for greater fuel diversity has never been more important,” said Laurence M. Downes, chairman and CEO of New Jersey Natural Gas. “I would like to commend the Board of Public Utilities for their approval of this pilot program and their leadership in advancing the goals of the state’s Energy Master Plan. With the availability and price benefit of today’s natural gas, we have an opportunity to help grow our economy and protect our environment by encouraging the market for alternative fuel vehicles, and that’s good for New Jersey and our future.”

Increasing the use of NGVs to meet the state’s transportation needs provides a cost effective and environmentally cleaner choice of fuel. Compressed natural gas can reduce fuel costs between 30 and 50 percent over petroleum, a tremendous savings for businesses and individuals. Additionally, according to the American Gas Association natural gas powered vehicles produce up to 30 percent fewer greenhouse gas emissions than diesel, which is better for the environment.

One of the major obstacles to the increased use of NGVs has been a lack of refueling infrastructure. Currently, there are only three refueling stations in New Jersey that are open to the public. With this pilot program, NJNG aims to help grow the market for NGVs in the state.

Beginning immediately, NJNG will work to identify companies in Monmouth, Ocean and Morris counties that currently use or plan to use NGVs in their fleet operations, such as waste hauling vehicles, buses and delivery trucks, to host the refueling stations. These facilities could be private companies or public or municipal entities. NJNG will install, own and maintain the infrastructure, and the host company will be required to make the station open to the public and use initially at least 20 percent of the refueling capacity.

Customers will not see any change to their bill in 2012 resulting from yesterday’s approval. NJNG will submit a cost recovery filing to the BPU in the first quarter of 2013, requesting a base rate change. A portion of the proceeds from the utilization of the CNG equipment, along with any available federal and state incentives, will be credited back to the ratepayers to help offset the cost of this investment. The total anticipated impact for the average residential customer using 1000 therms (1 therm = 100,000 BTU) annually will be no more than three-tenths of one percent, or approximately $3.50

This investment will also serve to bolster the economy by creating and retaining both direct and indirect jobs. Building new refueling infrastructure provides construction work along with the growth opportunities for equipment manufacturers, and increased demand for natural gas vehicles necessitates increased vehicle production and sale, all of which provides direct and indirect economic benefits for local businesses and suppliers.

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