Are New Jersey’s High Rates Really Falling?

Believe it! Electricity rates really are heading down!

Currently, New Jersey households use less than the national average (8,902 kWh per year) and recently rated the 11th-highest residential electricity prices in the nation.

That’s down 1 from 2015. Ooooh…Aaaaah…Big deal.

But if you look at the big picture, it is becoming a big deal. As of April 2017, the average monthly utility bill in New Jersey is $105.65, according to the Energy Information Administration (EIA). That’s about 7% below the U.S. average of $114.09. According to BPU President Richard Mroz, “It’s the eighth consecutive year where we’ve seen … stable or reducing prices for consumers in New Jersey.” This summer, New Jersey electric utility customers (those paying BGS) will enjoy slightly lower prices on their cooling costs beginning June 1. BPU projections for average monthly bills show:

  • Atlantic City Electric — down $4.14 (3.32%)
  • PSEG — down by $3 (2.6%)
  • Rockland Electric — down by $7.67 (6.28%)
  • JCP&L — down $4.07 (4.2%)

Unpacking Electricity Prices

There’s actually two big reasons behind the stable and reducing prices. First is because natural gas generators are able to take advantage of cheap natural gas prices and crank out cheap electricity. Natural gas commodity prices have been low (less than $4/mmBTU) and staying low due to an abundance of domestically produced natural gas, most noticeably next door in Pennsylvania in the Marcellus shale. Plus, with pipeline improvements and new large-capacity natural gas generators, more electricity is being made in-state.

The other big reason is that more capacity has been added to transmission and distribution in New Jersey. Though costly and sometimes not welcome by some residents, overloading bulk power transmission capacity in the past caused transmission congestion. Not only did this increase the cost of electricity to ratepayers but also increased the frequency of outages.

The Big Deal—Third Party Suppliers

Not only are energy rates falling, but because of efficiency programs so is usage. The Bureau of Labor Statistics (BLS) reported for this past March that within “household energy, electricity prices declined 1.2 percent” and that for the year 2017 so far, March residential electricity prices were down 0.7%. While third party electricity suppliers don’t have the state BPU board overseeing their prices, they do have to compete for customers with the utilities and each other. So with falling prices and low usage, the competition for customer dollars among utilities and third party suppliers is getting fierce.

That means New Jersey customers are beating high electric bills!

Whether it’s an older couple wanting to compare Princeton electricity prices or a new grad getting their first apartment and looking for the cheapest electricity deal in East Orange, energy consumers who look at supplier ratings and reviews will be in a better position to snag better deals and incentives by signing up with a third party supplier than their local utility. By shopping carefully, comparing rates and incentives, and reading reviews, New Jersey electricity will save even money on their electric bills.

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