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New Jersey Bill to Replace Three-Year Default Service Portfolio With Shorter-Term Contracts Advances From Committee
A bill which would replace New Jersey's current 36-month laddered default service portfolio with short-term contracts was reported out of the New Jersey Assembly's Telecommunications and Utilities Committee last week.
Bill A-4552, sponsored by Assembly Utilities Chairman Upendra Chivukula, would fully eliminate the use of laddered 36-month contracts for residential electric Basic Generation Service by the June 1, 2016 to May 31, 2017 delivery year. At that time, only 12-month contracts would be used for BGS (with existing 36-month contracts replaced with 12-month contracts as they roll-off starting in 2014/15).
For fixed price (FP) non-residential customers, BGS would be supplied exclusively through quarterly contracts starting on June 1, 2016. During a transition period, quarterly contracts would be used to replace existing 36-month contracts as they roll-off through June 1, 2016.
Additionally, the bill would lower the mandatory hourly pricing threshold for default service (CIEP class) to 400 kW no later than June 1, 2014.
The bill would require the CIEP threshold to be lowered to 250 kW no later than June 1, 2016. The BPU would be authorized to further lower the CIEP threshold, but would not be authorized to increase the CIEP threshold.
The bill would also require the offering of non-recourse POR by both electric and gas utilities by June 1, 2014, for customers on utility consolidated billing. Suppliers would not be required to utilize UCB.
The bill would authorize a POR discount rate limited to the recovery of implementation costs and an uncollectible cost component, except an uncollectible discount would not be authorized where a utility continues to collect uncollectibles in a nonbypassable rate.
The BPU would be required to implement a separate discount rate for, "each customer class."
Utilities would not be permitted to remove customers from utility consolidated billing due to non-payment unless both the customer and the electric power or gas supplier consent. Utilities would be authorized to disconnect service for non-payment of supplier charges on UCB.
The bill would also direct the BPU to develop an online comparison database of utility commodity prices and supplier offers, which has previously been in development by the BPU.
The bill's advancement from committee comes just as the current session is about to close, but is seen as a building block for efforts in the next session.
"A-4552 is critical to the future growth of New Jersey's competitive retail energy market and consumers' ability to exercise a choice for energy products that provide value and meet their specific needs," Jay Kooper, New Jersey State Chairman for the Retail Energy Supply Association, said in testimony before the Utilities committee last week.
"The lack of market-reflective pricing in a default service structure or, put another way, a default service based on a highly artificial pricing structure that bears no relation to current market prices, is a significant barrier to sustainable competition," Kooper said.
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January 13, 2014
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com
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