A 5% rate reduction in your electric bill beginning August 1 marks the first step in sweeping changes that will bring a minimum of 10% rate reductions within three years and may offer even greater savings to New Jersey consumers who "shop" for electricity.

With that in mind, the Division of the Ratepayer Advocate, which represents all utility customers in the State of New Jersey, offers this Q&A "tour" of the new electric marketplace.

What’s happening?

A new law -- the Electric Discount and Energy Competition Act -- gives New Jersey consumers the ability to "shop" for generation -- the portion of their utility service that represents the electricity itself -- from an energy supplier other than their current utility.

All consumers will have the option of choosing a natural gas supplier by the end of December 1999.

The new law also gives all New Jersey consumers a 5% discount in their total electric bill beginning August 1st. (You’ll find the reduction reflected in the bill you receive in September.) Within three years, New Jersey’s electric utilities are required to reduce all customer electric rates by at least an additional 5%.

 When will I have a choice of energy suppliers?

Sometime this Fall. At present, new energy suppliers are seeking to obtain licenses that will allow them to sell electricity in New Jersey.

 What exactly is changing?

Consumers will have the option of "shopping" for the portion of their utility service that represents the electricity itself. This represents between 1/4 and 1/3 of an average customer’s bill.

No consumer is required to shop. Customers can choose to stay with their current utility. Consumers who purchase electricity from energy suppliers other than their local utility may be able to save more money.

 How can I get a list of energy suppliers offering service where I live?

Beginning in mid-September, call your local utility and request an energy choice enrollment package. The enrollment package includes a list of suppliers offering service to customers in your area, as well as other important information that will help you compare supplier offers. You can also obtain a list of suppliers by accessing the Board of Public Utilities’ website at www.njin.net/njbpu.

 Can I save more money by "shopping" for electricity?

You will be able to find out how much you can save when you ask your local utility for an enrollment package. Call the suppliers you will find listed in that package to learn about their rates. Because new energy suppliers are just beginning to enter the New Jersey market, it is not yet possible to say how much more you will be able to save by "shopping" for electricity.

Will different companies be putting up new power lines in my neighborhood?

No. Your local electric utility will continue to provide the system for delivering electricity to your home or business (wires, poles, etc.). Your local utility will remain responsible for insuring that electricity reaches customers’ homes or businesses.

Whom do I call if the lights go out?

Call your local utility -- which continues to own and operate the electric wires -- whether or not you still purchase electricity from a new supplier.

 What if my new energy provider disconnects my service or if I’m not happy with my new provider?

You will not be without electricity. In either of these cases, your traditional utility will be required to provide you with basic generation service.

Once I’ve switched to a new supplier, can I switch to another supplier or back to my local utility?

Residential customers can switch to a new supplier or back to their traditional utility at any time. Check the terms and conditions of your agreement. You may be subject to early cancellation or termination fees from the supplier if you switch before the contract term ends.

 Will my bill change?

Probably. Your new electric bill will separate out charges for generation (the electricity itself) from distribution/transmission (the delivery of power). You may have the option of receiving a separate bill for generation service from an energy supplier. Finally, other charges that have always been incorporated as part of your bill may for the first time be listed as line items.

If you have a question about your bill, contact the company that sent it to you.

What is "aggregation"?

Business groups, independent business people, local governments and other organizations will be forming "aggregations" -- groups that combine their purchasing electric power to obtain more favorable rates or terms than individuals or businesses acting alone.

 What is "green power"?

"Green power" refers to electricity produced from renewable resources, such as wind, solar, biomass and hydroelectric facilities.

By purchasing from an electric service provider that sells green power, you help increase the overall production of green power and help reduce pollution.

 Will their still be a "winter moratorium" to avoid the shut off of electric service during cold weather months for low-income customers unable to pay their bills?

Yes. The legislation requires utilities to continue their winter moratorium programs. New Jersey utilities are not permitted to discontinue electric service to homes from November to March 1, even when a customer has a significantly overdue bill.

 What if no new energy suppliers offer service in my area?

The new law insures that every resident and business will continue to receive electric service. New Jersey’s traditional utilities will be required to offer electric service to all customers within their traditional service areas.