The New Jersey Board of Public Utilities (NJBPU) today approved the results of the State’s 21st annual electricity auction for Basic Generation Service (BGS), resulting in lower costs for electricity supplied to most residents and small and/or medium-sized businesses by Atlantic City Electric Company (ACE), Jersey Central Power & Light Company (JCP&L), Public Service Electric & Gas Company (PSE&G), and Rockland Electric Company (RECO), collectively, the New Jersey Electric Distribution Companies (EDCs).
“The average bill is based, in part, upon the results from the last three BGS auctions. As a result, in 2022, BGS ratepayers will experience a decrease in energy costs,” said Joseph L. Fiordaliso, president of the New Jersey Board of Public Utilities.
The BGS auction determines, in part, the cost of electricity for most New Jersey residents and many businesses for a 12-month period starting June 1, 2022. The average monthly BGS residential ratepayer bill is expected to remain stable for most customers. The average monthly bill will decrease anywhere from 1.1% to 2.8%. Specifically, ratepayers supplied by PSE&G will see an average estimated bill decrease of 2.8%, ratepayers supplied by JCP&L will see an average estimated bill decrease of 1.1%, ratepayers supplied by ACE will see an average estimated bill decrease of 1.9%, and ratepayers supplied by RECO will see an average estimated bill decrease of 2.4%.
The following table illustrates how the auction results will affect electricity supply costs for the average residential customer when the new rates take effect on June 1, 2022:
Monthly Impact of BGS Auction on Average Residential Accounts
|EDC||Usage (kWh)||Current Bill||Increase
|New Bill||Percent Change|
The Board’s approval of the BGS results covers two separate descending clock auctions conducted by NERA Economic Consulting beginning February 4 and ending February 7.
The auction for Commercial and Industrial Energy Price (CIEP) service for large commercial and industrial customers was conducted on February 4, and the auction for RSCP service for residential and small- to medium-sized commercial customers was conducted on February 7. Both auctions secured commitments for up to approximately 7,687 megawatts (MWs) of customer requirements.
The energy secured in the RSCP auction will meet one-third of the state’s residential and small business electric load requirements for the next three energy years, starting June 1, 2022. The remaining two-thirds of customer supply requirements for the 12-month time period beginning June 1, 2022 will be met by electric supply secured in the BGS Auctions held in 2020 and 2021. The supply acquired through the CIEP auction is for one year. The state’s four regulated EDCs do not earn a profit on the cost of the electric supply secured in the auctions. These costs are passed through directly to ratepayers.
For CIEP ratepayers, when compared to last year, the prices for all EDCs are lower. The CIEP price is primarily driven by the cost of electric generating capacity from PJM’s Reliability Pricing Model (RPM) Auction and the cost of meeting the State Renewable Portfolio Standard (RPS). Capacity prices for the coming 2022-2023 service year are lower for PSE&G, ACE, JCP&L and RECO. The CIEP price constitutes only a small portion of monthly bills of CIEP customers for the period from June 1, 2022 to May 31, 2023; the price of other components has remained fairly stable.
The CIEP product is a full requirements product. The energy portion of the product is priced at the spot price of energy. The price in the auction is meant to cover the costs of capacity and meeting the State RPS. As of June 2021, approximately 83% of the CIEP load is being provided through individual contracts with third-party suppliers. These contracts are negotiated in the competitive marketplace and are not affected by the CIEP auction results.
The winning bidders of the Residential and Small Commercial Pricing (RSCP) Auction are:
The BGS-CIEP Auction winners are:
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