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RATES AND REGULATORY ACTIONS
9 Months Ended
Sep. 30, 2017
Public Utilities, General Disclosures [Abstract]  
RATES AND REGULATORY ACTIONS
RATES AND REGULATORY ACTIONS:

SJG is subject to the rules and regulations of the New Jersey Board of Public Utilities (BPU).

In October 2017, SJG settled its base rate case, pursuant to which the BPU granted SJG a base rate increase, effective November 1, 2017, of $39.5 million, which was predicated in part upon a 6.80% rate of return on rate base that included a 9.60% return on common equity. The BPU Order allows SJG to recover revenues associated with certain infrastructure and system improvement investments made and the related expenses incurred since the approval of its previous base rate case proceeding in September 2014.

In January 2017, the BPU issued an order approving SJG’s request to extend the expiration date of its Energy Efficiency Programs (EEPs) from August 2017 to December 2018, without any modification to the programs or the amount of the previously authorized budget of $36.3 million, inclusive of operation and maintenance expenses.

In April 2017, SJG provided a Basic Gas Supply Service (BGSS) bill credit of approximately $8.0 million to its residential and small commercial customers. The credit was in addition to the overall rate reduction that was approved by the BPU and took effect in October 2016.

In June 2017, SJG filed its annual Energy Efficiency Tracker (EET) rate adjustment petition, requesting a $3.0 million increase in revenues to continue recovering the costs of, and the allowed return on, prior investments associated with its EEP. The petition is currently pending BPU approval.

In July 2017, SJG made its annual 2017-2018 Societal Benefits Clause (SBC) filing, requesting an $8.0 million increase in annual revenues. The SBC is comprised of sub-components, including the Remediation Adjustment Clause (RAC), the Clean Energy Program (CLEP) and the Transportation Initiation Clause (TIC). The related petition is currently pending BPU approval.

In September 2017, the BPU approved the following SJG requests:

A $4.7 million decrease in BGSS annual revenues and a $0.2 million increase in Conservation Incentive Program (CIP) annual revenues, both effective October 1, 2017 and associated with the 2017-2018 BGSS/CIP year, which runs from October 1, 2017 through September 30, 2018.

An increase in annual revenues from base rates of $5.0 million to reflect the roll-in of $46.1 million of Accelerated Infrastructure Replacement Program (AIRP II) investments made from October 2016 through June 2017, effective October 1, 2017.

An increase in annual revenues from base rates of $3.6 million to reflect the roll-in of $33.3 million of Storm Hardening and Reliability Program (SHARP) investments made from July 2016 through June 2017, effective October 1, 2017.

The statewide Universal Service Fund (USF) annual 2017-2018 budget for all the State's gas utilities. which includes a $2.0 million decrease in SJG's USF recoveries, effective October 1, 2017.

The BGSS, CIP and USF approvals discussed above do not impact SJG's earnings. They represent changes in the cash requirements of SJG corresponding to cost changes and/or previously over/under recoveries from ratepayers associated with each respective mechanism.

There have been no other significant regulatory actions or changes to SJG's rate structure since December 31, 2016. See Note 10 to the Consolidated Financial Statements in Item 8 of SJI's Annual Report on Form 10-K for the year ended December 31, 2016 and Note 3 to the Financial Statements in Item 8 of SJG’s Annual Report on Form 10-K for the year ended December 31, 2016.