– Auction outcome results in lower electricity prices across nearly all sectors –
– Today, the New Jersey Board of Public Utilities (Board) unanimously approved the results of the state's tenth annual electricity auction for Basic Generation Service (BGS). The auction determines, in part, the cost of electricity for most New Jersey residents and businesses. The Board’s approval will result in lower prices for the electricity commodity supplied to most residents and businesses for the twelve-month period starting June 1, 2011.
"New Jersey’s competitive auction for electricity, along with relevant market conditions, has resulted in lower electricity costs for most residents and businesses across the state," said Board President Lee Solomon. "While the auction results are good news for most ratepayers, the Board will continue to make every effort to drive ratepayers’ utility costs down and improve the State’s economic competitiveness."
The Board's approval covers the results of two separate descending clock auctions conducted during the past four business days. The first auction, which began on February 3 and ended on February 8, was for Commercial and Industrial Price (CIEP) service used by large commercial and industrial customers. The second auction, which began on February 4 and ended on February 8, was for fixed price (FP) service, which is used primarily by residential and small to medium sized commercial customers. This year, the value of both auctions totaled approximately $7 billion, which represents approximately 8,600 megawatts (MWs) of electric generating capacity.
The average price obtained in this year’s FP auction ($0.09528 per Kwh) was lower than the average obtained in last year’s auction ($0.09607 per Kwh). It was also significantly lower than the electricity procured in the 2008 auction ($0.11328 per Kwh), which will be replaced by supplies from this year’s auction. These prices only affect a portion of the cost of electricity for residential customers. Therefore, the auction will result in relatively small changes in overall residential electric bills.
For example, a typical residential customer monthly bill in the Public Service Electric and Gas (PSE&G)’s service area, will go from $122.57 per month to $118.30 per month, a 3.5 percent decrease, whereas a typical bill in the Jersey Central Power and Light (JCP&L) territory will go from $119.32 per month to $113.79 per month, a 4.63 percent decrease.