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HARVEY CEDARS, N.J. – New Jersey Natural Gas (NJNG), the principal subsidiary of New Jersey Resources (NYSE: NJR), is providing natural gas for a distributed generation (DG) project to support the power grid on Long Beach Island. Two 60-kilowatt (kW) natural gas microturbines, dedicated at a ceremony today, will produce added electricity for the grid and serve as a source of backup power for the Harvey Cedars Bible Conference Complex where they are located, while their waste heat is used for heating and hot water for the complex.

“We are pleased to be part of this innovative solution for adding capacity to the power grid to meet the growing electricity needs of our customers on Long Beach Island,” said Laurence M. Downes, chairman and CEO of NJNG. “The use of natural gas microturbines for the cogeneration of heat and electricity is a reliable and environmentally friendly approach to increase power supply in this area cost-effectively.”

Electric use on Long Beach Island is characterized by seasonal spikes with significantly higher usage during the summer than other times of the year. By producing electricity and heat on site, the microturbines offer reliable power economically and reduce the amount of power drawn from the traditional transmission and distribution system. Fueled by clean-burning natural gas, the microturbines also help air quality by producing fewer nitrogen oxide (NOX) emissions than traditional power plants. NOX is the major component of smog.

The microturbines were installed as part of a $1.6 million project to demonstrate how DG could be used to enhance the reliability and quality of service on Long Beach Island. The project was approved by the New Jersey Board of Public Utilities (BPU) in 2002 and funded by Conectiv Power Delivery, a PHI Holdings company, with matching funds from the U.S. Department of Energy. Electrotek Concepts of Arlington, Virginia is the project manager.

“This application of DG technology provides additional electricity for customers during the summer season, while improving the overall efficiency of the power delivery system,” said BPU President Jeanne M. Fox. “It is a model partnership that advances the goals set out by Governor James E. McGreevey for serving the needs of our state and supporting a clean environment.”

The Harvey Cedars Bible Conference Complex is open year round and has several buildings including a conference center, a dining hall, gymnasium, lodge, chapel, motel, indoor pool and maintenance building. The two microturbines will use about 92,000 therms per year of natural gas, which is the equivalent of the usage of approximately 84 homes. A therm is a measure of heat equivalent to 100,000 British thermal units, and the average home in the NJNG service area uses about 1,100 therms per year.

“This project demonstrates DG’s ability to improve system reliability during times of peak demand, working in conjunction with traditional grid-powered electricity,” Mr. Downes said. “As DG technologies gain greater acceptance, the potential benefits can increase in both electric and natural gas service for customers.”

DG technologies fueled by natural gas also have the potential to improve the overall efficiency of NJNG’s distribution system because peak use of electricity occurs during the summer, when demand for natural gas for heating is lowest. NJNG supports customers in making informed decisions about DG. A special pricing plan offered by NJNG and approved by the BPU in January 2003 offers a lower price for the delivery of natural gas used to fuel DG technologies.

Since April 1999, a 30 kW natural gas-powered microturbine has been serving a portion of the power needs of NJNG’s corporate headquarters, with a second 30 kW microturbine added in August 2000. The microturbines produce electricity using a natural gas turbine-driven generator. Both have operated continuously, with only the need for scheduled maintenance since their installation.

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 450,000 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.