New Jersey BGS Default Service Auction Prices Up To 10% Lower Versus Prior Contracts Being Replaced

New Jersey's 2018 procurement of contracts for one-third of the fixed priced Basic Generation Service (BGS) default electric service portfolio resulted in contracts that are 5 percent to 9 percent less expensive than the expiring contracts from the 2015 BGS auction.

For Fixed Price customers (below 500 kW), the 2018 BGS auction procured 36-month tranches for the period starting June 1, 2018, with pricing as follows:

2018 FP Auction Prices
Utility     Closing Price    Tranches
              (¢/kWh)        Procured
ACE            8.123               7
JCP&L          7.311              20
PSE&G          9.177              29
RECO           8.594               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. The energy secured in the fixed-price auction will meet one-third of the state's residential and small business electric load requirements for the next three energy years, starting June 1, 2018. The remaining two-thirds of customer supply requirements for the 12-month time period beginning June 1, 2018 will be met by electric supply secured in the BGS auctions of 2016 and 2017.

The new 2018 fixed price tranches replace tranches procured in 2015 which had the following prices:

2015 FP Auction Prices
Utility     2015 Closing Price 
              (¢/kWh)
ACE            8.606 
JCP&L          8.042 
PSE&G          9.954 
RECO           9.066 

When comparing the 2018 fixed price auction results to the 2017 fixed price auction, winning prices for each of the four EDCs increased between 1.1% and 7.6%

For hourly-priced CIEP customers (500 kW and higher), when compared to last year, the prices for all four EDCs are higher mostly due to higher capacity prices, as the BGS auction procured 12-month tranches for the period starting June 1, 2018, with pricing as follows:

CIEP Auction 2018 Prices
Utility       Closing Price   Tranches
               ($/Mw-day)     Procured
ACE              289.99            4
JCP&L            276.21           12
PSE&G            287.76           25
RECO             300.82            1

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

BP Energy Company
Calpine Energy Services LP
ConocoPhillips Company
DTE Energy Trading, Inc.
Direct Energy Business Marketing LLC
Exelon Generation Company, LLC
Hartree Partners, L.P.
Macquarie Energy LLC
NextEra Energy Marketing, LLC
PSEG Energy Resources & Trade LLC

The 2017 BGS-CIEP Auction winners were:

ConocoPhillips Company
DTE Energy Trading, Inc.
Exelon Generation Company, LLC
Hartree Partners, L.P.
NextEra Energy Marketing, LLC