This last recommendation is included because prudent financial hedging should be an integral component of gas purchasing strategies. Indeed, one utility, New Jersey Natural Gas Company, hedged a portion of its gas supply for this winter, resulting in substantial savings for its customers. Public Service successfully included hedging strategies in its gas portfolio over the past few years, but for some reason, decided not to do so this year. Hedging is an essential component of a prudent gas purchasing strategy. A purchasing strategy which includes hedging should be required for all of the utilities.
South Jersey has no one to blame but itself for being in such an under-recovered position.
It would be highly unfair to charge South Jersey's ratepayers now for this under-recovery at a time when high natural gas prices will already result in larger than normal gas bills. Further, South Jersey's request for an immediate ruling on its request to charge ratepayers interest on this under recovery is wholly inappropriate. The proper role of provisional relief is to address an emergency situation. South Jersey's request for interest will affect LGAC rates for future years but need not be resolved now to address an immediate emergency. In summary, the Ratepayer Advocate believes that the above proposal is fair to both the utilities and their customers.