Power bills expected to drop slightly

TOM JOHNSON, ENERGY/ENVIRONMENT WRITER | FEBRUARY 10, 2022

NJ Spotlight News

For most utility customers, electric bills will remain stable or possibly decline a bit this June when new rates kick in for the ensuing 12 months.

The modest drop in prices — ranging from 1.1% to 2.8% on a customer’s overall bill depending on the electric utility — affects 92% of residential and small commercial consumers in the state who do not shop for their own power in the competitive markets.

For those ratepayers, the price they pay for electricity is determined, in part, by the results of the 21st annual power auction held by the New Jersey Board of Public Utilities earlier this month. While prices for power purchased by the BPU increased by between 18% and 22%, the overall cost to customers was driven down by several factors.

One factor is the energy secured in the past few days in this auction will only meet one-third of the state’s residential and small-business electric load requirements over the next three years, beginning June 1. The other two-thirds needed to supply customers is being met with energy contracts secured in previous auctions in 2020 and 2021 when prices were lower, depressing the impact of higher electric prices on bills.

Capacity prices come down

The other big factor in lowering overall consumer costs is that capacity prices, another component of a customer’s overall energy bill, dropped significantly last year. Capacity helps ensure regulators have enough power to keep the lights on when electric demand spikes, such as on hot summer days.

“Overall, the 2022 auction was extremely successful and beneficial to residents,’’ said BPU President Joseph Fiordaliso. “The average bill is based, in part, upon the results of the last three auctions. As a result, ratepayers will experience a decrease in energy costs.’’

For most customers, the auction results will reduce their monthly bills by a few dollars. For Jersey Central Power & Light, the typical residential customer will save $1.06 a month (1.1%); an Atlantic City Electric customer, $2.54 a month (1.9 %); a Public Service Electric & Gas customer, $3.34 (2.8 %); and a Rockland Electric customer, $2.99 (2.4%).

There was a second auction for large commercial and industrial customers that resulted in somewhat lower prices, primarily attributed to lower capacity prices too, according to officials. In both auctions, commitments for up to 7,687 megawatts of power were secured.

The increase in energy prices is largely attributed to recent spikes in the cost of natural gas, which is the most widely used fuel to generate electricity throughout the PJM power grid, the nation’s largest.

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published this page in News and Politics 2022-02-10 03:31:24 -0800