N.J. Admin. Code § 2:50-4.2 - Payments for a fuel adjustment add-on

(a) All licensees shall pay to a New Jersey producer a fuel adjustment add-on for all New Jersey produced milk, which shall be calculated monthly by the Director in accordance with (b) below. The new fuel adjustment add-on for Class I milk will be officially announced on the Department's website at www.state.nj.us/agriculture the Friday before the 23rd of each month and will also be published in the New Jersey Register for the month in which the fuel adjustment add-on is effective. Should the 23rd of the month fall on a Friday, it will be announced on that day.

(b) The fuel adjustment add-on shall be calculated as follows:

1. Begin with the preceding month's diesel fuel price. The preceding month's diesel fuel price will be the price for the Central-Atlantic region as posted by the website of the Energy Information Administration of the U.S. Department of Energy, http://tonto.eia.doe.gov/dnav/pet/pet_pri_gnd_dcus_nus_w.htm, for the last full month prior to the month of calculation;

2. Subtract the base price of $ 1.403, which is the 2002 diesel fuel price for the Central-Atlantic region as posted on the website of the Energy Information Administration of the U.S. Department of Energy, http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emd_epd2d_pte_nus_dpg&f=m;

3. Calculate the premium by adding three cents for each 10 cents the fuel price increases over the base price or subtracting three cents for each 10 cents the fuel price decreases. To do this, take the difference between the preceding month's price and the base price and divide by 10. Round to the nearest whole number and multiply by three; and

4. Adjust the premium calculation to reflect the existing average Class I utilization, which shall be calculated monthly. The actual average Class I utilization calculation will be announced on the Department's website at www.state.nj.us/agriculture on the 14th of the month for the preceding month using the preceding month's production and processing figures. If the 14th of the month falls on a weekend or holiday, it will, be announced on the next business day. The fuel adjustment add-on amount actually payable to the New Jersey producer per hundred-weight for the preceding month will also be announced on the 14th of the month.

(c) An example calculation of how the fuel adjustment add-on will be calculated for February 2007, is as follows:

1. Begin with the December 2006 diesel price of $ 2.72 per gallon, which is the last full month prior to calculation;

2. Subtract the preceding month's diesel price from the base diesel price, as follows:

$ 2.72 (December diesel price) - $ 1.403 (base diesel price) = $ 1.317;

3. Divide the price difference by 10 cent intervals and round to the nearest whole number, as follows:

$ 1.317/10 cent intervals = 13.17 intervals (rounded to 13);

4. Multiply the number of intervals by three cents to arrive at the fuel adjustment add-on, as follows:

13 x $.03 per interval = $ 0.39;

5. Adjust the fuel adjustment add-on to reflect the current month's Class I utilization for New Jersey, as follows:

$ 0.39 x 0.76 (sample average Class I utilization) = $ 0.2964 (rounded to $ 0.30). For purposes of this example, it was assumed that the Class I utilization was 76 percent; however, the actual Class I utilization for February may be different than that used in this example; and

6. Thus, the fuel adjustment add-on for February 2007 is $ 0.30 per hundred-weight. Please note that as of the February 1, 2007, the original operative date of this subchapter, February's actual Class I Utilization has not yet been calculated and as a result, the actual fuel adjustment add-on amount payable to the New Jersey producer may differ from that listed in this subsection.

(d) This premium shall be payable directly to the New Jersey producer by the licensee in the final payment to the New Jersey producer in accordance with the final payment requirements at 7 CFR 1001.73. Adjustments shall be made for those licensees who overpay or underpay based on Class utilization in accordance with this subchapter. This premium will be in addition to and shall not replace any premiums paid to the New Jersey producer or those acting on behalf of the producer as of October 1, 2006.

(e) It shall be a violation of this subchapter for any licensee to change its premium program or divert milk to a different location for the purposes of circumventing this section or reducing the amount payable to a New Jersey producer pursuant to this section.

(f) The impact of the fuel adjustment add-on shall be reassessed by the Department beginning August 1, 2007.

Notes

N.J. Admin. Code § 2:50-4.2

Adopted by 54 N.J.R. 1704(a), effective 9/6/2022