Competitive electricity auction lowers bills in New Jersey

Electricity bills in New Jersey are falling and Lee Solomon, President of the New Jersey Board of Public Utilities, credits competition. Solomon cited the state’s tenth annual electricity auction for Basic Generation Service, as well as favorable market conditions, as the primary factors behind lowered costs for residents and businesses.
 
Two auctions covered about 8,600 megawatts of power, one for fixed-price service for three years and the other for hourly-priced service for one year. Residential and small business electric bills, after declining last year by about 1 percent, will drop across the board again: a 3.5 percent savings for Public Service Electric and Gas customers, 4.47 percent for Atlantic Electric, 4.63 percent for Jersey Central Power and Light, and 3.4 percent for Rockland Electric Company. The new rates go into effect on June 1.
 
The market-based auction approach involves local utilities accepting yearly competitive bids for new service contracts. Contracts are awarded to the suppliers who are able to offer the most competitive prices, and the savings are passed directly on to consumers. Yearly competitive bidding also allows power suppliers to benefit from increasingly affordable forms of alternative electricity generation and provides incentive for innovation and investment. 
 
Solomon pledged that the board “will continue to make every effort to drive ratepayers’ utility costs down and improve the state’s economic competitiveness.” Through this year’s auction, he’s seen firsthand that New Jersey’s competitive marketplace continues to pay off for residents and businesses alike.
 

Joel Malina | February 14, 2011