New Jersey Utilities File to Lower Hourly Pricing Cutoff to 500 kW

The New Jersey electric distribution companies have filed a proposed Basic Generation Service (BGS) procurement plan that includes the lowering of the threshold for hourly priced default service.

Specifically, the BPU had directed in a June order that the Commercial and Industrial Energy Pricing (CIEP) threshold, at and above which hourly pricing applies, be lowered to customers with a peak load share of at least 500 kW beginning June 1, 2013.

In compliance, the EDCs' joint proposed procurement plan filed on July 2 states that the CIEP cutoff will be changed to 500 kW. BGS customers with a Peak Load Contribution (PLC) of 500 kW or more will be required to take service under a BGS-CIEP tariff or rate.

Separately, the EDCs are proposing several complementary changes to reduce the likelihood that offers in the BGS-Fixed Price Auction will remain open for as long as they have in past auctions.

As proposed, the BGS-CIEP Auction will start on Friday and will be conducted at an accelerated pace the first day. Changes to the decrement formulas will enable the BGS-CIEP Auction to close early the following week.

The BGS-FP Auction is proposed to begin early on Monday so that no bids will remain open over the weekend. More rounds will be conducted on the first day than in previous years to enable substantial progress on Monday. Decrements will be fine-tuned for all EDCs to encourage price movements that are more comparable across EDCs, and to favor harmonization on the last active round of bidding for each EDC.

If the BGS-CIEP Auction closes before the BGS-FP Auction, the Auction Manager will accelerate the schedule of the BGS-FP Auction and reduce the length of rounds to bring the BGS-FP Auction to the most expeditious close possible without bidders becoming unduly rushed.

The BGS-Fixed Price auction will continue to procure approximately one-third of default service requirements for a 36-month period. The Fixed Price February 2013 auction will procure 36-month tranches for the period starting June 1, 2013.