New Jersey Basic Generation Service Rates to Fall at 3 Utilities, Increase at PSE&G Only Due to Transmission

New Jersey basic generation service electric rates will again decrease on June 1 for three of the state's utilities, with only PSE&G seeing a slight increase in rates unrelated to competitive generation costs, according to the result of the BPU's Basic Generation Service Auction.

For fixed price customers (below 500 kW), the BGS auction procured 36-month tranches for the period starting June 1, 2014, with pricing as follows:

Utility       Closing Price      Tranches Sold
                (¢/kWh)
ACE              8.780                 8
JCP&L            8.444                15
PSE&G            9.739                28
RECO             9.561                 2

Final fixed price BGS rates will reflect a blend of the above prices and prices from the two prior BGS auctions, under a blending process.

According to the BPU, the new blended rates will result in the following total bill impacts for residential customers starting June 1, 2015

Utility       % Increase
ACE            (2.75%)
JCP&L          (1.70%)
PSE&G           1.1%
RECO           (0.7%)

For ACE, JCP&L, and RECO, the rates from the 2014 BGS auction are slightly higher than those in the two most recent auctions, but well below the 2011 BGS auction prices that they are replacing in the laddered portfolio.

The BPU said that the increase at PSE&G reflects the increased cost of new transmission facilities, which are equally applicable to competitive retail suppliers.

For CIEP customers (500 kW and higher), the BGS auction procured 12-month tranches for the period starting June 1, 2014, with pricing as follows:

Utility       Closing Price   Tranches Sold
               ($/Mw-day)
ACE              235.22            4
JCP&L            254.79           13
PSE&G            284.04           22 [27 per news release]
RECO             290.41            1

As of December 2013, approximately 86% of the CIEP load is being served by competitive retail suppliers.

The winning bidders of the Fixed Price (FP) Auction were:

BP Energy Company
Citigroup Energy Inc.
Exelon Generation Company, LLC
NextEra Energy Power Marketing, LLC
Noble Americas Gas & Power Corp.
NRG Power Marketing LLC
PSEG Energy Resources & Trade LLC
TransCanada Power Marketing Ltd.

The BGS-CIEP Auction winners were:

ConocoPhillips Company
DTE Energy Trading, Inc.
Exelon Generation Company, LLC
PPL EnergyPlus, LLC
PSEG Energy Resources & Trade LLC