RATES AND REGULATORY ACTIONS

9 Months Ended

Sep. 30, 2019

Public Utilities, General Disclosures [Abstract]

RATES AND REGULATORY ACTIONS

RATES AND REGULATORY ACTIONS:

SJG and ETG are subject to the rules and regulations of the BPU. ELK is subject to the rules and regulations of the MPSC.

SJG:

In September 2018, the BPU issued an Order approving, on a provisional basis, SJG's request for a $65.5 million increase in the gas cost recoveries associated with the 2018-2019 BGSS year, effective October 1, 2018. The matter was thereafter referred to the Office of Administrative Law for further proceedings.  Also, in December 2018, SJG submitted a notice of intent to self-implement a BGSS rate adjustment based on a 5% increase of the monthly bill of a typical residential customer; that adjustment took effect on February 1, 2019. In May 2019, the BPU issued an Order authorizing SJG to spread the $65.5 million recovery of gas costs over a two-year period, resulting in a reduction in the BGSS rate effective May 15, 2019, and a one-time bill credit of approximately $24.0 million.

In June 2019, SJG filed its annual EET rate adjustment petition, requesting a $1.3 million increase in revenues to continue recovering the costs of, and the allowed return on, investments associated with its EEPs. The matter is currently pending BPU approval.

In June 2019, SJG filed its first annual Tax Act Rider petition, requesting a rate adjustment to refund approximately $6.8 million related to SJG’s excess deferred income taxes, resulting from the change in the Federal corporate tax rate from 35% to 21% associated with the Tax Reform. The matter is currently pending BPU approval.

In July 2019, SJG filed its annual SBC petition, requesting a net $3.9 million increase, including tax, in SBC-related revenues. The SBC is comprised of three sub-components: the RAC, the CLEP, and the TIC. The matter is currently pending BPU approval.

In September 2019, the BPU approved the following SJG requests:

•A $27.6 million decrease in BGSS annual revenues and a $7.6 million decrease in CIP annual revenues, both effective October 1, 2019, on a provisional basis, associated with the 2019-2020 BGSS/CIP year, which runs from October 1, 2019 through September 30, 2020.

•An increase in annual revenues from base rates of $6.7 million to reflect the roll-in of $64.5 million of AIRP II investments made from July 2018 through June 2019, effective October 1, 2019.

•An increase in annual revenues from base rates of $2.9 million to reflect the roll-in of $27.4 million of SHARP II investments made from June 2018 through June 2019, effective October 1, 2019.

•The Statewide USF annual 2019-2020 budget for all the State’s gas utilities, which included an increase of approximately $1.0 million in SJG’s USF recoveries, effective October 1, 2019.

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.

ETG:

In April 2019, ETG filed a petition with the BPU requesting a base rate revenue increase of approximately $65.0 million to recognize the infrastructure investments made to maintain the safety and reliability of its natural gas system. The petition reflects approximately $346.0 million in net plant additions not reflected in ETG’s current rates. The matter is currently pending BPU approval.

In April 2019, the BPU issued an Order approving a revenue increase of $1.3 million associated with ETG’s annual EEP rate adjustment filing, effective May 1, 2019.

In May 2019, the BPU issued an Order approving a revenue increase of $6.9 million associated with ETG’s annual RAC rate adjustment filing, effective June 1, 2019.

In June 2019, the BPU issued an Order approving a $300.0 million IIP effective July 1, 2019. The Order authorized the recovery of costs associated with ETG’s investments of approximately $300.0 million between 2019-2024 to replace its cast-iron and bare steel vintage main and related services. The Order provides for annual recovery of ETG's investments through a separate rate mechanism.

In July 2019, ETG filed its annual RAC rate adjustment petition, requesting a $6.1 million increase in revenues to continue recovering the costs of remediation. This matter is currently pending BPU approval.

In July 2019, ETG filed its annual EEP rate adjustment petition, requesting a $1.0 million increase in revenues to continue recovering the costs of, and the allowed return on, investments associated with its EEPs. This matter is currently pending BPU approval.

In July 2019, ETG filed its annual WNC/CEP/OSMC rate adjustment petition, requesting a $1.9 million decrease in revenues to return an over collection in each of these riders. This matter is currently pending BPU approval.

In September 2019, the BPU issued an order approving the Statewide USF annual 2019-2020 budget for all the State’s gas utilities, which included an increase of approximately $0.8 million in ETG’s USF recoveries, effective October 1, 2019.

There have been no other significant regulatory actions or changes to the Utilities' rate structure since December 31, 2018. See Note 10 to the Consolidated Financial Statements in Item 8 of SJI's and SJG's Annual Report on Form 10-K for the year ended December 31, 2018.