TRENTON, N.J. — Governor Mikie Sherrill declared a state of emergency over utility costs on January 20. She signed Executive Order No. 1 and directed the Board of Public Utilities to issue Residential Universal Bill Credits no later than July 1, 2026 to offset electricity supply rate increases due to take effect in 2026. She cited a 33% jump in average residential electricity prices between June 2023 and June 2025.
So when PSE&G announced on June 5 that it wants to cut residential gas heating bills by 5% effective October 1, the headline sounded like relief. The utility said it would maintain the “lowest gas bills in the state and region” for approximately 1.9 million gas customers across 15 counties: Bergen, Burlington, Camden, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union. PSE&G has announced an October gas bill reduction in 2019, 2023, 2024, and now 2026.
The announcement leaves out what customers are already paying. A PSE&G customer in northern New Jersey opened a March 2026 bill and saw a total of $206.10. The gas itself—175.967 therms—cost $63.97. The delivery charges cost $142.13. That is more than double the gas cost.
The supply charge for the gas came to $0.363534 per therm. That rate belongs to the supply year that began October 1, 2025. The board had set the previous year's rate at $0.326205 in April 2025 after the full annual review, including hearings, a settlement, and an administrative law judge's sign-off. That rate covered the supply year ending September 30, 2025.
PSE&G filed its next annual petition in May 2025 for the supply year beginning October 1. The rate on the March bill came through a different path. Under a 2003 board order, the utility can self-implement increases up to 5% of the total bill twice per year, effective December 1 and February 1, with one month's notice to regulators and no public hearing. Rate Counsel and board staff receive advance notice and can challenge the increase.
The company self-implemented a rate of $0.363539 per therm on December 1, 2025. It held the rate flat on February 1, 2026, declining a second increase. The board published a final order on May 21, 2026, adopting an administrative law judge's initial decision from April 27, 2026.
The first increase raised the supply charge above the annual settlement rate from the previous year.
Now PSE&G proposes a 5% reduction in total residential gas heating bills effective October 1, 2026. The 5% figure is a total bill estimate. The supply rate would drop enough to produce that effect. The delivery rate flows from a separate process and does not change with this filing. PSE&G has not published the exact new per-therm rate or the dollar savings for a typical customer.
On the March 2026 bill, the gas itself cost $63.97. If PSE&G applied the 5% cut proportionally from the current supply rate, the new rate would land at roughly $0.345 per therm, still 5.9% higher than the $0.326205 rate from the previous supply year. A customer who paid $32.62 for the gas itself in September 2025 would pay roughly $34.50 after the proposed cut. For a customer using the same amount of gas, the total bill would remain above last year's level because the supply rate has not fully returned to the previous year's settlement level.
Your PSE&G bill is two separate costs wearing one hat. The first is the cost of the gas itself, the supply charge. That is what PSE&G pays to buy gas from the Marcellus Shale in Pennsylvania, plus an administrative add-on. The second is the cost of bringing it to your house, the delivery charge. That includes the monthly service fee, the distribution charge for the pipes, and a balancing charge of $0.100751 per balancing use therm. The supply charge is a pass-through. The delivery charge is where the company earns its regulated return and funds infrastructure.
PSE&G says it keeps bills low by buying most of its gas from Pennsylvania's Marcellus Shale, stockpiling it cheap in summer and drawing it down in winter. The board-approved 2024/2025 supply rate of $0.326205 was indeed lower than competitors. New Jersey Natural Gas charges 45.7 cents per therm for the supply. South Jersey Gas charges 58.7 cents. Elizabethtown Gas charges 69.62 cents. The March 2026 bill shows at least one PSE&G customer was paying $0.363534, higher than the company’s own previous rate but still lower than competitors.
The proposed 5% cut would only affect the supply side. The delivery side would stay where it is. On the March 2026 bill, the delivery portion was $142.13 against $63.97 for the gas. Even after the cut, the delivery side would still be the larger half of the bill.
PSE&G is spending $1.4 billion on gas pipe replacement through 2028 under the Gas System Modernization Program. That program began in January 2026. The delivery rate funds it. The delivery charge is not part of the 5% reduction. It remains at its current level, and the infrastructure program will eventually require additional delivery rate recovery. The supply charge can fall while the delivery charge continues to fund the pipes.
The same board that allowed the gas supply increase to take effect is now juggling three major decisions simultaneously. It must rule on PSE&G's proposed 5% gas cut from the higher level. It is weighing an 11.95% rate hike from New Jersey American Water that would add $10.02 per month for water and $8.20 for wastewater for a population of approximately 2.9 million, supporting over $1.4 billion in infrastructure investment. Public hearings on that case ended May 27. And the board is still implementing Governor Sherrill's emergency order to offset electricity spikes that began with the June 1 billing cycle.
The board has not published a docket number for the June 5 gas filing. Annual BGSS petitions typically require public hearings and a full board review before rates take effect. The board has not set a decision date on the gas cut or the water hike, nor has it announced any hearing dates.
PSE&G has not published the exact new rate for October 2026. The 5% reduction is a proposal, not a promise.
Meanwhile, your bill is still due next month.
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Sources
• Governor of New Jersey, Executive Order No. 1 (January 20, 2026)
• New Jersey Board of Public Utilities, Generic BGSS Order (BPU Docket GX01050304) (January 6, 2003)
• Public Service Electric & Gas (PSE&G), "PSE&G to Lower Residential Gas Bills This Fall" (October 2019)
• PSE&G, "PSE&G Proposes Lowering Gas Bills by 4%, Effective October 1" (June 1, 2023)
• PSE&G, "PSE&G Lowering Gas Bills by About 5%, Effective Oct. 1" (September 26, 2024)
• New Jersey Board of Public Utilities, Order Approving Stipulation for Final Rates (BPU Docket GR24050364) (April 23, 2025)
• Public Service Enterprise Group (PSEG), Investor Update (February 25, 2025) – PSEG is the parent company of PSE&G
• New Jersey Board of Public Utilities, Public Notice of Filing and Hearings (BPU Docket GR25050314) (May 30, 2025)
• New Jersey Board of Public Utilities, Residential Universal Bill Credit Order (BPU Docket QO25070389) (August 13, 2025)
• PSEG, Investor Update (December 2025)
• PSEG, Fourth Quarter and Full Year 2025 Earnings Release (February 26, 2026)
• New Jersey Board of Public Utilities, Order Adopting Initial Decision and Stipulation for Final Rates (BPU Docket GR25050314) (May 21, 2026)
• New Jersey Board of Public Utilities, BPU newsroom, electricity supply rate increases effective June 1, 2026 (June 1, 2026)
• PSE&G, "PSE&G Proposes Lowering Gas Bills by 5%" (June 5, 2026)
• Two River Times, "Public Questions New Jersey American Water Proposed Rate Hike" (June 5, 2026)
• Anonymized PSE&G customer, PSE&G residential gas billing statement (March 2026), provided to NJBallot
• New Jersey Natural Gas, Residential Price Table (December 2025)
• South Jersey Gas, Price to Compare (February 2026)
• Elizabethtown Gas, BGSS Prices per therm (February 2026)
• PRNewswire, "New Jersey American Water Files Rate Request" (January 16, 2026), BPU Docket WR26010010