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WALL, N.J. – New Jersey Natural Gas (NJNG), the principal subsidiary of New Jersey Resources (NYSE: NJR), today notified the New Jersey Board of Public Utilities (BPU) of plans to increase prices by 5 percent, effective December 1, 2004. The price increase is necessary because of higher wholesale natural gas prices on the New York Mercantile Exchange. Wholesale prices have risen by as much as 15 percent since NJNG’s most recent increase in October and by about 31 percent since June 2004, when the October increase was requested.

“We know customers are counting on us for affordability, and we go to great lengths to avoid raising prices. This increase is required strictly because of higher natural gas prices on the wholesale market,” said Laurence M. Downes, chairman and CEO of New Jersey Natural Gas. “Even though rising energy costs are driven by the market and beyond our control, we remain committed to doing all we can to reduce the impacts of wholesale price trends on our customers,” Mr. Downes said.

As a regulated utility, NJNG does not add any profit margin to the wholesale price of natural gas. The increase is based on NJNG’s ongoing review of how closely Basic Gas Supply Service prices would cover natural gas purchased on behalf of customers. The BPU allows the state’s natural gas utilities to implement price increases of up to 5 percent if needed, effective in December 2004 and February 2005, and decreases at any time.

With the increase, NJNG’s price for a residential heating customer will rise 5 percent, from $1.1682 to $1.2299 per therm. For an average customer using 1,100 therms per year, the increase will add about $5.66 to a monthly bill, amounting to $67.87 annually.

Market Volatility
Industry experts attribute some of the most recent rises in prices for both oil and natural gas to interruptions in production stemming from damage in the Gulf of Mexico caused by Hurricane Ivan in September 2004. To help offset price swings and higher prices on the wholesale market, NJNG maintains a balanced portfolio of natural gas supply contracts.

“By successfully managing our storage contracts and effectively using our hedging program, we estimate we have saved our customers about $70 million in natural gas costs, preventing the need for an additional 10 percent increase in our prices, given present market conditions,” said Joseph P. Shields, senior vice president – energy services.

Helping Customers
Natural gas costs make up the majority of customers’ bills, with amounts for service delivery and other charges accounting for the rest. NJNG has not increased traditional base rates for operating and administrative costs in over 10 years. During this time:

• NJNG has invested over half a billion dollars in new capital to meet the needs of system reliability and a growing customer base.
• NJNG has added over 131,507 new customers and 12,112 existing customers converting nongas equipment from other fuels, by focusing on operating efficiently and ensuring the cost of adding customers is supported by the expected new margin they will generate.

Despite increases in wholesale prices, NJNG is able to moderate the impact of price volatility on customers through effective natural gas purchasing strategies and expertise on the wholesale market. NJNG further helps to reduce the impacts of higher prices on customers through innovative programs developed with the BPU and the Division of the Ratepayer Advocate.

• NJNG sells natural gas and contracts for pipeline space in other markets when not required to serve the company’s core market.
• Margins from these sales offset a portion of customers’ costs and serve to reduce exposure to higher market prices.
• Since their inception in 1992, these programs have saved NJNG’s customers more than $230 million, or approximately 4 percent on their bills each year.

NJNG also assists customers with managing natural gas costs through the budget plan, energy assistance programs and conservation information.

• Customers who opt to use NJNG’s budget payment plan can spread their estimated annual natural gas costs over 12 equal payments at no additional charge.
• For customers facing financial hardship, there are several programs, including NJNG’s Gift of Warmth fund, which provide heating assistance for income-eligible households as well as those experiencing temporary difficulties, such as unemployment or illness.
• NJNG also offers ways to help make homes more energy-efficient, including low- and no-cost tips. More information is available by calling 1-800-221-0051 or visiting the NJNG Web site at njliving.com, where links may be found to additional online resources, such as www.njcleanenergy.com, for information on the New Jersey Clean Energy Program, and www.rpa.state.nj.us, the Division of the Ratepayer Advocate’s Web site.

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.