New Jersey Default Service Rates Fall, Bills To Be Higher on Capacity Costs

New Jersey's Basic Generation Service auction generally produced lower energy prices for three-year contracts to serve one-third of Fixed Price (under 500 kW) customers for the period starting June 1, 2016, with the exception of Public Service Electric & Gas, but higher capacity performance costs associated with prior-year tranches will drive default supply bills higher in most service areas

For Fixed Price customers (below 500 kW), the BGS auction procured 36-month tranches for the period starting June 1, 2016, with pricing as follows:

Utility       Closing Price      Tranches Sold
                (¢/kWh)
ACE              8.214                 7
JCP&L            7.485                18
PSE&G            9.638                28
RECO             8.502                 1

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.

These new tranches replace tranches procured in 2013 which had the following prices:

Utility       2013 Closing Price      
                (¢/kWh)
ACE              8.727
JCP&L            8.370
PSE&G            9.218
RECO             9.258

According to the BPU, as a result of PJM’s Capacity Performance construct, average residential estimated bills for all four EDCs will increase by about $2 per month. With the lower auction prices and the capacity cost increases factored in, ratepayers served by Jersey Central Power and Light (JCP&L) will see an average estimated bill decrease of 1.2%. Ratepayers served by Atlantic City Electric (ACE) and Rockland Electric Company (RECO) will see average estimated bill increases of 1.14% and 0.7%, respectively. Those ratepayers supplied by Public Service Electric & Gas (PSE&G) will see an average estimated bill increase of 3.5%.

Without PJM’s Capacity Performance construct, the estimated change in monthly bills would have ranged from a decrease of 3.4% to an increase of 1.3%, the BPU said

For hourly-priced CIEP customers (500 kW and higher), the BGS auction procured 12-month tranches for the period starting June 1, 2016, with pricing as follows:

Utility       Closing Price   Tranches Sold
               ($/Mw-day)
ACE              258.61            5
JCP&L            259.24           13
PSE&G            335.33           26
RECO             277.50            1

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

BP Energy Company
BTG Pactual Commodities (US) LLC
Calpine Energy Services LP
DTE Energy Trading, Inc.
Exelon Generation Company, LLC
Macquarie Energy LLC
NextEra Energy Power Marketing, LLC
PSEG Energy Resources & Trade LLC
Talen Energy Marketing LLC
TransCanada Power Marketing Ltd.

The 2015 BGS-CIEP Auction winners were:

BTG Pactual Commodities (US) LLC
ConocoPhillips Company
DTE Energy Trading, Inc.
Exelon Generation Company, LLC
NextEra Energy Power Marketing, LLC
PSEG Energy Resources & Trade LLC