Discounted Electricity Rates, New Shopping Options Attract New Jersey Consumers

A recent Philadelphia Inquirer article shows that New Jersey’s competitive market is creating economic benefits for all electricity consumers, as evidenced by the entry of three new major power suppliers into the market resulting in an exponential growth in the number of customers who have switched to power suppliers.
 
While switching among the state’s commercial and industrial (C&I) customers has become common in the state, switching rates among residential customers has skyrocketed in the last year. According to the article, approximately 213 residential customers had switched to discount suppliers in 2009, but that number now stands at more than 16,000 – and the figure has doubled since June.
 
These increases have been stimulated by an influx of alternative power suppliers into the state, attracted by the differences between the spot market prices for energy and the state’s three-year basic generator service (BGS) auction price of energy. New Jersey’s customers already benefit from the state’s ability to renegotiate electricity prices on a rolling three-year schedule, but as competitive power suppliers see lower prices available, they have been incentivized to offer rates to consumers that are discounted below the rates available from incumbent utilities.
 
"The price differential and the opportunity to save money might make it attractive to consumers and certainly makes it attractive to third-party suppliers," Lee Solomon, President of the New Jersey Board of Public Utilities (NJBPU) recently said.  "As long as there is that cost incentive, that price difference between the spot market price and the third-year BGS auction price there will be an interest and there will be some switching.  The market is driving it right now."
 
More than 30 alternative power suppliers have been certified by the NJBPU to offer electricity to consumers, promising innovative and green energy plans as well as significant savings of up to 12 percent on utility bills. This continues a positive storyline for New Jersey, which has repeatedly benefited from tremendous environmental and economic benefits through competition.

Joel Malina | September 13, 2010