Higher Natural Gas Prices Expected to Temporarily Hike Elizabethtown Gas Bills.

Energy Editors/Business Editors

UNION, N.J.--(BUSINESS WIRE)--June 1, 2004

Company's Request for Increased Rates in October Could Be Offset

by Decrease in February

Customers of Elizabethtown Gas Company, a division within NUI Corporation (NYSE:NUI), can expect to see a higher gas cost component on their bills between October 2004 and January 2005, but a probable reduction beginning in February 2005, according to a filing made by the company today with the New Jersey Board of Public Utilities (BPU).

The filing represents an annual adjustment in Elizabethtown Gas' Basic Gas Supply Service (BGSS) rate -- the part of the bill covering the cost of the natural gas supplies that the company purchases for its customers. Elizabethtown does not earn a profit on the BGSS rate; it is simply a dollar-for-dollar pass-through of the company's gas costs.

In its filing, Elizabethtown Gas proposes to increase its current BGSS rate by 5.15 cents per therm, from 76.93 cents per therm to 82.08 cents per therm, effective October 1, 2004. A typical residential heating customer using 100 therms per month would see an increase of $5.15, or about 4.2 percent, in their current monthly bill of $122.52. The percentage and dollar amount of the increase will vary for customers with higher or lower usage.

In February 2005, however, Elizabethtown Gas expects to reduce its rates by 6.5 cents per therm with the expiration of its Gas Cost Underrecovery Adjustment (GCUA), a surcharge imposed three years ago to extend the recovery period for high-priced natural gas supplies purchased by New Jersey's gas utilities during the winter of 2000-01. Although the GCUA and BGSS are separate recovery mechanisms, their rates are combined on the customer's bill under the heading of "Basic Gas." The expiration of the GCUA surcharge is expected to bring the Basic Gas rate back below its current level.

Victor A. Fortkiewicz, president of NUI Utilities, Inc., the NUI subsidiary that includes Elizabethtown Gas, said the proposed BGSS increase is related to recent trends in energy prices. "We're seeing higher prices for all forms of energy, whether it's gasoline for more than $2.00 a gallon or natural gas for $6.50 per thousand cubic feet," he said. "In both those cases, you're seeing prices that are substantially higher than they were the previous year."

Fortkiewicz emphasized that the pass-through nature of the BGSS in no way affects Elizabethtown Gas' commitment to keep the rate as low as possible. "We purchase the lowest priced gas supplies available, consistent with our responsibility of providing reliable service to all our customers. In addition, the majority of the gas we are purchasing for delivery to customers next winter will be price-protected through hedging or the strategic use of storage facilities, guarding our customers against future increases and ensuring that we won't be at the mercy of the volatile commodity market at the most critical time of year," he said.

The proposed increase in the BGSS rate will begin one month after Elizabethtown Gas customers receive the first installment of a refund arising out of a settlement between NUI and the BPU over issues raised in a focused audit of Elizabethtown Gas, NUI Utilities, Inc. and NUI Corporation. Elizabethtown Gas is awaiting approval from the BPU on a proposal it recently submitted for applying the refund as a credit on its customers' September bills.

Fortkiewicz noted, "Some people may wonder why we're issuing the focused audit credit in September, raising the BGSS rate in October, and then eliminating the GCUA in February, instead of just rolling everything together and coming up with one bottom-line rate for the entire year. It's a good question, but the answer is that all three of these items are separate, involving the recovery of gas costs over different periods of time and a refund related to other issues. As a result, each item must be timed and accounted for separately."

Elizabethtown Gas Company is the New Jersey division of NUI Utilities, Inc., which is a subsidiary of NUI Corporation. Elizabethtown Gas serves more than 260,000 customers in Union, Middlesex, Sussex, Warren, Hunterdon, Morris and Mercer counties. NUI Corporation, based in Bedminster, NJ, is a diversified energy company that operates natural gas utilities and businesses involved in natural gas storage and pipeline activities. NUI Corporation is currently for sale, with a definitive agreement to sell the company anticipated in the third quarter of calendar 2004.

This press release contains forward-looking statements, including statements related to the potential sale of NUI Corporation, estimated increases in customer bills, and the estimated decrease in the BGSS rate as a result of expiration of the GCUA surcharge. These statements are based on management's current expectations and information currently available and are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. Factors that may make the actual results differ from anticipated results include, but are not limited to, the ability of the company to identify a buyer of the company and negotiate a definitive agreement for the sale of NUI Corporation; those factors set forth in NUI Corporation's Form 10-K, Form 10-Q and its other filings with the Securities and Exchange Commission; fluctuations in the wholesale price of natural gas supplies; variations from normal weather conditions and other uncertainties, all of which are difficult to predict and some of which are beyond NUI Corporation's control. For these reasons, you should not rely on these forward-looking statements when making investment decisions. The words "expect," "believe," "project," "anticipate," "intend," "should," "could," "will," and variations of such words and similar expressions, are intended to identify forward-looking statements. NUI Corporation does not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise.