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PSE&G BGS Supply Increase Cost Mitigation Will Apply Equal Credits To BGS, Shopping Customers
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Public Service Electric and Gas Company's (PSE&G) proposal for residential electric bill cost mitigation, due to increases in the New Jersey electric Basic Generation Service rates, would provide relief to customers through distribution-side bill credits applied to all residential customer bills, while maintaining the auction-based BGS rate on the supply side of the bill for non-shopping customers
PSE&G's mitigation, to apply to residential customers, is proposed to be known as the Temporary Supply Offset Clause (TSOC). The TSOC would be effective July 1, 2025, and would apply the credits for three months (the new, higher BGS rates start on June 1, 2025)
A PSE&G media representative confirmed to ECM that, as proposed by PSE&G, the credits would be provided on both BGS customer bills and shopping customer bills, with the amount of the credit not varying based on a customer's shopping status
PSE&G has proposed several levels of cost mitigation -- with proposals for credits that would serve to offset either 25%, 50%, or 100% of the increase in the BGS supply cost during the months of July, August, and September 2025
The credit would apply on a nonbypassable basis as a distribution rate credit. As previously reported, the BPU had directed that such cost mitigation shall occur on the "distribution" side of the bill
At a 100% offset of the BGS cost increase, the credit would be about 4 cents per kWh, while the 25% offset would result in a credit of about 1 cent per kWh
Recovery of the deferral resulting from the credits would be implemented on a nonbypassable basis starting in October
PSE&G's proposal remains subject to BPU approval
PSE&G has also committed to, or proposed for BPU consideration, various other measures meant to assist customers with the BGS rate increase, including expanded protections from service termination, foregoing recovery of any carrying costs for costs whose collection is essentially deferred due to the credits, and efforts to increase customer enrollment in universal service and equal payment plan programs
Also this week, New Jersey Governor Phil Murphy directed the BPU to open a new proceeding on resource adequacy, due to the PJM capacity price spikes which led to the higher BGS prices.
The Governor's office said that, in the new BPU proceeding, the BPU will:
• Evaluate proposals to swiftly bring more generation online
• Continue to determine how New Jersey can best achieve its reliability, equity, and clean energy objectives while keeping costs to consumers as low as possible, and whether New Jersey is best served the regional capacity market administered by PJM Interconnection
• Identify policy opportunities to mitigate increased ratepayers costs due to demand growth driven by data center proliferation in the PJM-region
Docket EX25040210
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NJ Gov. Directs BPU To Open Proceeding On Resource Adequacy
May 16, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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