The New Jersey Board of Public Utilities (NJBPU) has announced the results of the state's 24th annual electricity auction for Basic Generation Service (BGS). The auction has led to increased electricity costs for most residents and small to medium-sized businesses served by New Jersey's four regulated Electric Distribution Companies (EDCs).
Christine Guhl-Sadovy, President of the NJBPU, stated, "This week’s BGS auction results are the culmination of several issues: rapidly increasing demand for electricity, coupled with limited supply growth due to lagging new generation interconnection, and flawed market dynamics in the PJM region." She emphasized that PJM's recent capacity auction results are a significant factor driving these increases. The Murphy Administration is committed to holding PJM accountable and implementing reforms to reduce costs for ratepayers.
The BGS auction influences electricity costs for a 12-month period starting June 1, 2025. Although NJBPU certifies the auction results as consistent with market trends, it does not influence pricing. Winning prices for all four EDCs have risen compared to last year's auction. The average monthly bill is expected to increase between 17.23% and 20.20%, depending on the service territory.
Brian Lipman, Director of New Jersey Rate Counsel, expressed concern about the price hikes: "Rate Counsel is deeply concerned about the outcome of the auction. There was a significant increase in prices, with the average electric ratepayer seeing an increase of over $20.00 per month." He attributed much of this rise to PJM's failure to address market rules and interconnection issues.
Despite advocacy efforts by Governor Murphy and other states in the PJM region, including calls for immediate action from PJM to curb rising costs, prices have continued to climb. In response to pressure from regional governors and a complaint filed by Pennsylvania Governor Josh Shapiro with FERC against PJM, a price cap was agreed upon by PJM.
For residential ratepayers using BGS service supplied by PSE&G, JCP&L, ACE, and RECO, estimated bill increases range from 17.23% to 20.20%. Assistance programs are available for those struggling with utility bills.
The auctions conducted by NERA secured commitments for approximately 7,556 megawatts (MWs) of customer requirements across two separate descending clock auctions: one for Commercial and Industrial Energy Price (CIEP) service on February 7 and another for Residential Small Commercial Pricing (RSCP) service on February 10.
The energy acquired through these auctions will meet one-third of New Jersey's residential and small business electric load requirements starting June 1, 2025. CIEP ratepayers will see higher prices driven primarily by electric generating capacity costs from PJM’s Reliability Pricing Model Auction.
NJBPU remains responsible for ensuring safe utility services at reasonable rates while responding to consumer complaints and monitoring utility services within New Jersey.
