Sandy less costly for N.J. Natural Gas than was feared

David P. Willis, Asbury Park (N.J.) Press | USATODAY

WALL, N.J. — New Jersey Natural Gas will spend less money to repair and restore its system damaged in superstorm Sandy.

Shortly after the storm, the utility, which has 6,700 miles of lines serving nearly 500,000 customers, said estimated repairs would cost $40 million to $60 million.

On Thursday, the utility's parent company, New Jersey Resources (NJR), said capital expenditures related to the hurricane now are estimated at $30 million to $40 million.

Following Sandy, the gas company surveyed the state of its system in New Jersey from Bay Head and Mantoloking through Seaside Park, as well as Long Beach Island.

"The damage was less severe than originally anticipated," company spokesman Michael Kinney said.

The lower estimates mean storm restoration efforts ultimately will cost the company's customers less. Bills won't go up as much as expected.

Under its rate regulation, New Jersey Natural Gas is allowed to pass along capital costs to customers through its base rate. A filing with the state Board of Pubic Utilities is expected no later than Nov. 15, 2015, New Jersey Resources said.

New Jersey Natural Gas replaced a large, mile-long distribution main in Mantoloking, which connects the area to the Bay Head and Point Pleasant region.

It also swapped out 2,000 feet of damaged cast iron and steel main lines in Manasquan.

In total, 270 miles of main were either re-pressurized for service or replaced.

"Most of the main we found was salvageable," Kinney said. "The main work is complete."

Utility workers also rebuilt or replaced 51,000 meters that might have been damaged or exposed to flooding, he said.

The utility has restored service to 31,714 customers who could be safely reconnected. But some areas, particularly in Toms River's Ortley Beach section and Normandy Beach, still are without service.

"What it comes down to is the damage that individual homes sustained," Kinney said. "When those homes are habitable and customers can safely accept it, we can restore the service."

The new forecast came as New Jersey Resources reported an expected drop in its fiscal first-quarter earnings.

Net earnings at New Jersey Resources for the quarter ended Dec. 31 were $35.5 million, or 85 cents a share, compared with $45.3 million, or $1.09 per share, during the same period in 2011.

Its stock price was up about 3% in midday trading on the New York Stock Exchange. It hit a 52-week low in mid-November after Sandy struck.

Its earnings decrease is primarily because of lower results at NJR Clean Energy Ventures and NJR Energy Services.