Electric bills should remain relatively flat this June for most residential and small commercial customers in New Jersey when new rates take effect.
The 20th annual power auctions conducted by the New Jersey Board of Public Utilities resulted in small decreases in monthly bills for Jersey Central Power & Light customers (59 cents) and those of Rockland Electric (44 cents).
Atlantic City Electric customers will see monthly bills rise by 29 cents, while Public Service Electric & Gas bills will climb by $3.65, the latter a result of how the state’s largest utility allocates costs among rate classes and differences between expiring and new contracts.
Overall, BPU President Joseph Fiordaliso said the so-called Basic Generation Service auctions, a process held every February to procure power for customers who do not shop for alternative supplies, was a success. The results stem from two separate auctions, one for residential customers and small to medium commercial customers, and the other for large commercial and industrial customers.
For those ratepayers, the board said the prices for all four of the electric utilities was lower than last year. These prices do not affect most large commercial and industrial users, who negotiate private contracts with energy suppliers to procure the power they need.
The BGS price determines, in part, the cost of electricity for most residents and many businesses for a 12-month period, beginning June 1. Those new one-year contract prices replace older one-year contracts from auctions three years ago, a step that aims to limit huge spikes in energy bills.
Utilities to handle transmission
One big change in this year’s auction was a decision by the BPU to move the costs for transmission, a big chunk of what everyone pays on their bills, out of the BGS auction. Ratepayers will still pay those costs, but the service will be provided by the four electric utilities.
The state has no authority to regulate transmission and increases in those costs, an issue that has been a recurring bone of contention between New Jersey and the Federal Energy Commission in recent years. With a new administration in Washington, Fiordaliso is hoping the federal agency is more cooperative with the state than in the past.
Rate Counsel Director Stefanie Brand said the auction appeared to be competitive. “There are not any great shifts, which is good,’’ she said. “Overall, it looks like the costs are going down a bit.’’
Unlike past auctions, this one did not include any power plants owned by the Public Service Enterprise Group among the winning bidders, although the company may have privately agreed to supply power from its generating stations to one of the other winning bidders.
In the past, PSEG has been a dominant factor in the annual auction. It is unclear whether the company submitted bids but was not selected or if it did not submit bids. The BPU does not disclose who bid into the auction but failed to win a contract.
PSEG’s three nuclear power plants in South Jersey typically supply about 40% of the state’s electricity and more than 90% of its carbon-free energy. It currently is seeking to retain $300 million in annual ratepayer subsidies in a case before the BPU, expected to be decided in April.
If the company fails to retain the subsidies, it has repeatedly warned it may close the plants because they are not financially viable, an option proponents of the subsidies argue could jeopardize achieving many of the Murphy administration’s clean-energy goals.
PSEG declined to explain its participation in the auctions. “We do not discuss our bidding strategy,’’ said Michael Jennings, a spokesman for Public Service Electric & Gas, a subsidiary of PSEG.