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WALL, N.J. – New Jersey Natural Gas (NJNG), the principal subsidiary of New Jersey Resources (NYSE:NJR), is making community leaders in its service territory aware of ways their residents can minimize the impact of rising natural gas prices this winter. The increase in price on natural gas supplies is a result of numerous factors, including the effects of hurricanes in the Gulf Coast.

“In recent weeks, we have seen already escalating energy costs skyrocket, taking a serious toll on natural gas prices,” said Laurence M. Downes, chairman and CEO of NJNG, in a letter sent to community leaders and elected officials. “I would like to take this opportunity to share with you some of the factors driving this trend, as well as tips to help customers manage their energy needs and costs this upcoming heating season.”

Production in the Gulf Coast region represents 20 percent of total natural gas production in the United States. Immediately following the hurricanes, as much as 16 percent of production in the region was shut down, which drove up prices on the market. That number has since decreased as floodwaters continue to recede, damage is accurately assessed and repaired and production resumes. The hurricanes, however, are not the only cause of rising prices. The summer temperatures were 15 percent warmer than normal throughout the nation, which increased the demand for natural gas to generate electricity for air conditioning and drove up wholesale market prices.

These factors, in combination with a natural gas market that has been tight for the past five years, making it susceptible to dramatic changes based on weather conditions, account for higher natural gas costs around the country.

Before natural gas prices increased due to the demand, NJNG had secured prices for 75 to 80 percent of the supply needed to keep our customers’ homes warm during the upcoming winter. This will help to minimize the impact of prices, however, due to the effects of supply and demand on price, it is increasingly important that customers be aware of ways they can be more energy conscious. In order to protect and preserve our natural resources, it is time to begin making fundamental changes in the way energy is consumed in homes and businesses.

Visitors to NJNG’s Web site, njliving.com, can find ways to make their homes more energy efficient, including low- and no-cost tips. A home energy analysis can help identify areas of the home that are susceptible to over-consumption. Children can even get involved through the Energy Hog program. Links to all these items, as well as additional resources, such as New Jersey’s Clean Energy Program and the Division of the Ratepayer Advocate, can also be found on the Web site.

NJNG also assists customers with managing their natural gas costs through various programs. NJNG’s Budget Plan helps families to better plan their energy expenses through equal payments over a 12-month period. Gift of Warmth provides heating assistance for NJNG’s income-eligible households, as well as those experiencing temporary difficulties, such as unemployment or illness. The federal government’s Low Income Home Energy Assistance Program (LIHEAP) also provides help to fixed and low-income families to help them pay their energy bills. The new Energy Policy Act of 2005 has expanded this program with the hope of providing assistance to more families than ever before. Information on these and other similar programs can be found by visiting njliving.com or calling 1-800-221-0051.

The following letter was sent to community leaders and elected officials in Monmouth, Ocean and Morris counties:

At New Jersey Natural Gas (NJNG), providing our customers with safe, reliable, affordable service is our top priority. In recent weeks, we have seen already escalating energy costs take a serious toll on natural gas prices. I would like to take this opportunity to share with you some of the factors driving this trend, as well as tips to help customers manage their energy needs and costs this upcoming heating season.    

Natural gas is America’s most popular home-heating fuel. In fact, more homes rely on natural gas heat than all other energy forms combined. Natural gas is also becoming the preferred choice for businesses, especially for electric power generation. As such, the demand for natural gas has never been greater.   

In recent years, the natural gas market has become extremely tight causing higher energy prices. A number of factors have contributed to this volatility including the increased use of natural gas to generate electricity. This summer’s warmer than normal weather and restrictive public policies with regard to the development of our nation’s reserve base have made it increasingly difficult to keep up with consumer demand.   

However, no single factor affects energy prices more than the weather. This year is no exception. Hurricanes Katrina and Rita caused escalated and volatile trading activity on the New York Mercantile Exchange. The storms disrupted natural gas production and have taken a toll on the natural gas industry. As a result, wholesale prices have risen significantly and, ultimately, customers will pay more this winter.

NJNG remains committed to working with our stakeholders to minimize the impact of market volatility and higher prices on our customers. Utilizing effective business strategies, NJNG secured the price of nearly 80 percent of the natural gas supply needed to keep our customers’ homes warm this winter prior to the increases caused by the hurricanes. Additionally, we offer a budget plan to help our customers better plan for their energy expenses by distributing costs evenly over a 12-month period.

While planning and effective business strategies are half the battle, there also needs to be a change in the way we think about energy consumption. Critical to that is conservation. NJNG offers useful tips to help reduce our customers’ energy costs and make homes more energy efficient, including:

• Set thermostats between 65 and 70 degrees during the winter and at 58 degrees when away from the house for more than a few hours. Bear in mind, warmer temperatures are recommended for homes with ill or elderly persons and infants.

• Seal leaks with caulk or weather stripping around doors, windows and other openings such as pipes or ducts.

• Change or clean furnace filters once a month during heating season.

• Set water heater temperatures at 120 degrees. By lowering the thermostat on the water heater to 120 degrees, families can cut water heating bills without sacrificing comfort.

• If radiators are located near cold walls, place a sheet of aluminum foil between the radiator and the wall to reflect heat back into the room.

We also make available important information on energy assistance programs such as NJNG’s Gift of Warmth initiative, the state’s NJ Shares program and the federal government’s Home Energy Assistance Program to help customers in need cover their energy expenses. To learn more about energy assistance programs in our coverage area please visit our Web site, njliving.com, or contact the agencies listed below:

Gift of Warmth
Monmouth and Middlesex  732-502-8855 or 732-775-4442
Morris    973-366-1131
Ocean    732-244-9041

NJ Shares   1-866-657-4273

Home Energy Assistance Program
Monmouth   732-502-8855 or 732-775-4442
Middlesex   732-828-4541
Morris    973-366-1131
Ocean    732-244 9041

With energy prices rising, NJNG is actively working to meet the market challenges and minimize the impact on our customers. It is important to remember that the increases being felt across the industry reflect the cost of the commodity and do not represent any profit for NJNG. We remain committed to providing our customers with safe, reliable service at the lowest possible price and will continue to work diligently to meet their needs each and every day.

Sincerely,

Laurence M. Downes
Chairman and CEO   

New Jersey Natural Gas (NJNG) is the principal subsidiary of New Jersey Resources (NYSE: NJR), a Fortune 1000 company and a member of the Forbes Platinum 400. NJNG is one of the fastest-growing local distribution companies in the United States, serving more than 459,000 customers in New Jersey’s Monmouth, Ocean, Middlesex and
Morris counties. This service area’s demographics and quality of life contribute greatly to NJNG’s growth. NJNG’s progress is a tribute to the dedicated employees who have shared their expertise and focus on quality through more than 50 years of serving customers and the community to make the company a leader in the competitive energy marketplace. For more information, visit NJNG’s Web site at njliving.com.