Consumer Electric Bills Headed South for Slight Dip in Monthly Charges
Cheaper natural gas, more efficient power plants, expanded power grid play part in reduced charges for residential customers
Once again this year, consumers will see a slight dip in their electric bills, beginning in June.
The state announced Friday that monthly bills for most residential customers will drop anywhere from $3 a month to as much as $7.67, according to the New Jersey Board of Public Utilities.
The decline is tied to lower natural-gas prices; the advent of new, more efficient power plants; and the expansion of the transmission network — all factors that have helped drive down energy prices and reduce congestion on the power grid, which can spike prices.
The fall in prices marks the eighth time in as many years that charges have dropped or remained stable, a trend welcomed by the Christie administration, which has made lowering some of the nation’s highest energy bills one of its top priorities. The costs to consumers stem from the prices locked in by electric utilities that purchase the power they need for customers at an online auction overseen by the state.
With power prices dropping, the agency has been able to make billions of dollars of investments in modernizing the infrastructure of the state’s four electric utilities: updating poles, wires and equipment to deliver electricity to customers more reliably.
“It’s very good news,’’ said BPU President Richard Mroz, who noted the decline came despite actions by the regional power grid operator, PJM Interconnection, and the Federal Energy Regulatory Commission, which have increased wholesale electricity prices. The state has opposed many of those measures, but mostly without success.
Nevertheless, news of the continuing drop in costs to consumers was welcome. New Jersey typically ranks among the top 10 in energy costs nationwide.
“It might be a little lower than many people might have expected,’’ said Paul Patterson, an energy analyst who follows the annual auction. “It is part of a continuing trend where you see less congestion and lower prices leading to customers’ savings.’’
Customers of Rockland Electric, the state’s smallest utility, will see the biggest savings, with their monthly residential bill dropping by 6.3 percent, or $7.67. Public Service Electric & Gas customers, which has 2 million customers, will lower bills by 2.6 percent or $3 a month. Jersey Central Power & Light’s residential bills will fall by 4.2 percent, or $4.07 per month, and Atlantic City Electric’s bills by 3.3 percent or $4.14.
“Our customers are benefitting from the lower costs of energy and capacity, even as PSE&G is upgrading its transmission and distribution systems to maintain reliability,’’ said Jorge Cardenas, a vice president of the utility.
In a separate auction conducted for commercial and industrial customers, prices also fell when compared to the previous year, according to the BPU. The primary factor was, a component that ensures there is enough electricity available to meet demand when it peaks.
All told, the utilities ended up spending approximately $6 billion to buy power for their customers. They do not make a profit on the transaction, merely passing the cost on to ratepayers. There were 10 winning bidders in the residential auction, and six in the commercial and industrial process.