Atlantic City Electric is seeking a rate increase that would raise a typical customer’s monthly bill by 8%.
The requested increase in the electricity delivery rate, announced by the company Nov. 21, was made to the state Board of Public Utilities, which will rule on it.
The rate increase would “reflect upgrades and technology enhancements that help continue ensuring safe and reliable service across South Jersey,” according to a company release.
The release also says that the new rates include recovery of the utility’s cost of providing “accessibility to energy assistance as well as programs that help customers save money and energy.” Energy assistance programs have costs that are spread across all ratepayers.
The filing for the increase includes recovery of costs for what ACE terms “major projects to strengthen the grid in South Jersey.” These projects include modernization of substations in Brigantine, Cape May City and a substation supporting Gloucester and Camden counties. The filing also includes ongoing cost recovery for ACE’s Smart Energy Network.
The rate increase for a typical customer using 643 kilowatt hours per month would be a monthly bill increase of 8%, or about $12.96, the company said.
The rate request follows a recent fee approval by the BPU for a gradual three-year increase that moves from just under $1 a month to just over $5 a month in the period from 2024 to 2027. That fee increase is to support the implementation of energy efficiency programs in line with the state’s energy master plan. The programs are known as Triennium 2.
The year prior to June 1, 2024, saw the BPU approve various rate increases that resulted in a cumulative 15% hike on the average customer’s bill. The increases touched off a summer season in which ratepayers complained about “something more at work” resulting in the doubling and tripling of bills for many, who then brought their cases to elected officials.
Rep. Jeff Van Drew (R-2) held a hearing in South Jersey demanding a better understanding of the factors driving up electricity bills. Hearings were held as well in Trenton. There were demands for a public session before the BPU for ratepayers to express their concerns.
Ire is often directed at Atlantic City Electric even though the utility, one of four publicly regulated power distribution utilities in New Jersey, controls only a portion of the bill that customers get. ACE is responsible for the distribution of electricity to homes and businesses within its regulated area. The local utility, part of the Exelon Corp. family of six distribution utilities, does not set the supply costs for power, which is an area where rates have been rapidly growing.
ACE collects a total bill that includes its own charges for distribution, supply costs set at auctions and approved by the BPU, and various fees that are often tied to state energy plan initiatives. The collective but separate setting of rate increases has a cumulative impact on ratepayers.
That impact has led the New Jersey Office of Rate Counsel to argue that the state is taking the easy way out by allowing the costs associated with or caused by its energy transition goals to unfairly fall on the shoulders of ratepayers.
Reports of significant increases in the costs associated with electricity capacity are warnings that another round of hikes is just around the corner. A ninefold increase in rates at the most recent PJM Interconnection auction will eventually find its way into some form of hike in supply rates on customer bills before June 1, 2025. PJM is the grid operator for 13 states, including New Jersey.
That auction result led Exelon’s chief executive officer, Calvin Butler, to tell analysts on a call that prices for supply in 2025 might rise higher than they did in 2024.
The distribution rate increase request announced Nov. 21 is just a step in a multipart hike in ratepayers’ bills. The increases come from different sources and are not all within the control of ACE. The one entity that sees them all and is called on to approve each of them in the BPU.
For ACE, the rate increase request helps “ensure the lights stay on when a customer needs them.” The company’s release also includes a reminder that the utility has a number of programs like budget billing and energy efficiency that can assist customers who need help dealing with their electric bills.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
