COURT HOUSE – Get ready to pay more for electricity beginning June 1. That reality was the result of this year’s auction for Basic Generation Service (BGS). The results of the auction were approved by the New Jersey Board of Public Utilities (NJBPU) Feb. 8.
The average Atlantic City Electric residential customer using 650 kilowatt hours will see an increase of 4.1% or a move from $135.51 to $141 per month.
While the rate increase for Atlantic City Electric was not the highest among the New Jersey electrical utilities, the absolute price of the average residential use of 650 kilowatt hours is the highest in the state. Atlantic City Electric has the highest per kilowatt hour cost. A myriad of factors go into setting that per kilowatt hour cost.
Atlantic City Electric is one of four New Jersey electric distribution companies (EDCs). Each year, the company participates in a statewide auction process to satisfy its customer’s BGS needs. The winning bidders become BGS providers in the area of their bid. There are several winning bidders each year across a spectrum of service areas for each EDC.
The NJBPU conducts these auctions each year, and the rates approved are for three years. This means that one-third of the residential portfolio is at auction each year. The practice helps to moderate annual increases.
In years like this one, when market forces are driving up energy costs, the increases “roll into the price more slowly,” according to an NJBPU consultant at the meeting.