Gas, Electricity Tax Break For NJ Homeowners Proposed: What To Know

NEW JERSEY - A new bill introduced this week in the New Jersey Senate is proposing a tax moratorium for residential customers who use natural gas and electricity to heat their homes this holiday season.

The sponsors of S3354, Joseph Pennacchio (R-24) and Declan O'Scanlon Jr. (R-13), say the tax break is necessary after higher gas rates went into effect on Oct. 1, after state regulators approved double-digit hikes for four gas providers serving millions of residential customers across the Garden State. Nearly 2 million customers were impacted when the state’s largest utility, PSE&G, increased rates by 25 percent. Read more: NJ To Pay More For Heat As State Approves Gas Rate Hikes for Millions

Similarly, the New Jersey Board of Public Utilities approved rate hikes for three other utility companies during a September meeting. These increases include:

• New Jersey Natural Gas (up $21.01 per month, or 15 percent)
• Elizabethtown Gas (up $25.33 per month, or 22 percent)
• South Jersey Gas (up $31.49 per month, or 18.6 percent)

“The Board of Public Utilities approved the massive price hike, and the State unfairly profits from the high cost of home heating,” Pennacchio said in a statement. “It is not fair to families who are already struggling in a threatening fiscal environment. We won’t tolerate the State reaping revenue rewards from detrimental price hikes that compound the financial pressures on residents who are already staggering in the face of out-of-control inflation and run-away interest rates.”

Census Bureau estimates show that over 2.5 million New Jersey housing units rely on natural gas to heat their homes in the winter, with another 555,363 homes relying on electricity and 240,765 opting for fuel oil or kerosene.

The spike in natural gas prices, which reached their highest levels since 2008, features several factors at play. The oil, fuel and coal markets hit turbulence amid the international fallout of Russia invading Ukraine.

The United States also faced scorching temperatures this summer, which forced customers to crank up air conditioning. This hurt inventory levels more, but U.S. oil and gas companies have been spending less on expensive drilling projects and more on dividends and buybacks for shareholders.

“Adding sales tax on top of the exploding rates rubs salt in the wounds for state residents who are caught in an economic whirlpool,” said O’Scanlon (R-13). “Families are being hit from all sides, with inflation driving up the cost of food and gasoline, and climbing inter rates impacting the price of housing, automobiles, and credit card purchases. People are desperate for some relief, and this bill is a step in the right direction.” Read more: Inflation Is Eating Up NJ's Unspent Pandemic Funds, GOP Lawmakers Say

The state Department of Community Affairs has separately enacted a Winter Termination Program to prevent service discontinuation for some eligible customers in assistance programs receiving residential electric, sewer and water service from Nov. 15 through March 15. To check eligibility, click here.

–With reporting by Josh Bakan.