TRENTON - The New Jersey Board of Public Utilities (NJBPU) today announced the results of New Jersey’s 24^th annual electricity auction for Basic Generation Service (BGS), resulting in higher costs for electricity supplied to most residents and small and/or medium-sized businesses by New Jersey’s four regulated Electric Distribution Companies (EDCs).

“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,” said Christine Guhl-Sadovy, President of the NJBPU. “PJM’s recent capacity auction results are the main driver of these increases. The Murphy Administration will continue to aggressively push and hold PJM accountable to address rising costs by expediting interconnection and implementing additional market reforms, all of which will help drive down costs for ratepayers which is a priority for the BPU.”

The BGS auction determines, in part, the cost of electricity for most New Jersey residents and many businesses for a 12-month period starting June 1, 2025.  The NJBPU’s authority over the auction is limited to certifying the results as consistent with market trends and does not extend to influence pricing. Winning prices for all four EDCs increased compared to last year’s auction, with the average monthly bill projected to increase between 17.23% and 20.20% depending on the service territory. The state’s four regulated EDCs do not earn a profit on the cost of the electric supply secured in the auctions.  These costs are passed through directly to ratepayers.  A variety of factors led to this result, including increases in the PJM-determined cost of capacity caused by rapidly increasing electricity demand growth driven by data center growth and other factors throughout the region, lagging PJM interconnection queue timelines for new resources, and flawed market dynamics.  

"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, which have a substantial impact on New Jersey families and businesses, especially those least able to afford it," said Brian Lipman, Director, New Jersey Rate Counsel. "There are a number of factors that led to these higher prices, but a significant driver is PJM and its failure to fix the capacity market.  The last PJM capacity market auction cleared at its highest price in history.  While some of that is due to an anticipated increase in the demand for electricity, most of the increase is due to PJM’s failure to fix its market rules or timely interconnect new generation supply.  This was not simply an issue of supply and demand as PJM’s continued failure to fix its market rules and interconnection queue will lead to even higher prices in the future and slow our ability to build out our electrical infrastructure. The Board’s authority is limited at the federal and regional level, but must carefully examine every state-level filing before it with an eye towards affordability."

These price increases have occurred despite months of advocacy by the Murphy Administration and other States in the PJM region to reduce costs. In January, Governor Murphy called on PJM to take immediate action to respond to the escalating cost crisis.  In October, Governor Murphy and governors from Pennsylvania, Illinois, Maryland, and Delaware called for urgent action in PJM to curb record-high electricity prices. As a result of a complaint from Pennsylvania Governor Josh Shapiro filed with the Federal Energy Regulatory Commission (FERC) against PJM and letters from PJM founding member governors criticizing flaws in PJM’s auction that threatened to impose significant new price increases, PJM agreed to a price cap to save consumers across the region $21 billion over two years.

The average monthly bill for a residential ratepayer using BGS service is expected to increase for most customers.  Specifically, ratepayers supplied by PSE&G will see an average estimated bill increase of 17.24%, ratepayers supplied by JCP&L will see an average estimated bill increase of 20.20%, ratepayers supplied by ACE will see an average estimated bill increase of 17.23%, and ratepayers supplied by RECO will see an average estimated bill increase of 18.18%.

If you or someone you know is having difficulty paying their utility bills, there are several assistance programs available: Universal Service Fund, Fresh Start Program, Payment Assistance for Gas and Electric (PAGE) Program, Low Income Home Energy Assistance Program, Lifeline, NJ Shares, and NJ Comfort Partners.  Additionally, the Winter Termination Program is a utility-led program that protects qualifying ratepayers from service disruption during the winter months from November 15 until March 15.  A more detailed description of these programs, as well as the requirements and guidelines can be found on the NJBPU’s website at https://nj.gov/bpu/assistance/programs/.

The following table illustrates how the auction results will affect electricity supply costs for the average residential customer when the new rates take effect on June 1, 2025:

Monthly Impact of BGS Auction on Average Residential Accounts

The BGS results cover two separate descending clock auctions conducted by NERA (National Economic Research Associates) beginning February 7 and ending February 10.  The auction for Commercial and Industrial Energy Price (CIEP) service for large commercial and industrial customers was conducted on February 7, and the auction for Residential Small Commercial Pricing (RSCP) service for residential and small- to medium-sized commercial customers was conducted on February 10.  Both auctions secured commitments for approximately 7,556 megawatts (MWs) of customer requirements.

The energy secured in the RSCP 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, 2025.  The remaining two-thirds of customer supply requirements for the 12-month time period beginning June 1, 2025 will be met by electric supply secured in the BGS Auctions held in 2023 and 2024.  The supply acquired through the CIEP auction is for one year. 

For CIEP ratepayers, when compared to last year, the prices for all EDCs are higher.  The CIEP price is primarily driven by the cost of electric generating capacity from PJM’s Reliability Pricing Model (RPM) Auction and the cost of meeting the State Renewable Portfolio Standard (RPS).  The CIEP price constitutes only a small portion of monthly bills of CIEP customers for the period from June 1, 2025 to May 31, 2026.

The CIEP product is a full requirements product.  The energy portion of the product is priced at the spot price of energy.  The price in the auction is meant to cover the costs of capacity and meeting the State RPS.  As of June 2024, approximately 82.53% of the CIEP load is being provided through individual contracts with third-party suppliers. These contracts are negotiated in the competitive marketplace and are not affected by the CIEP auction results.

BGS-RSCP 36-Month Tranches:

BGS-CIEP 1-year Tranches:

The winning bidders of the Residential and Small Commercial Pricing (RSCP) Auction are:

Axpo U.S. LLC

Boston Energy Trading and Marketing LLC

BP Energy Company

ConocoPhillips Company

Constellation Energy Generation, LLC

DTE Energy Trading, Inc.

Engelhart CTP (US) LLC

Five Elements Energy II LLC

Hartree Partners, L.P.

Macquarie Energy, LLC

NextEra Energy Marketing, LLC

The BGS-CIEP Auction winners are:

About the New Jersey Board of Public Utilities (NJBPU)

NJBPU is a state agency and regulatory authority mandated to ensure safe, adequate and proper utility services at reasonable rates for New Jersey customers. Critical services regulated by NJBPU include natural gas, electricity, water, wastewater, telecommunications and cable television. The Board has general oversight and responsibility for monitoring utility service, responding to consumer complaints, and investigating utility accidents. To find out more about NJBPU, visit our website at www.nj.gov/bpu.