How do New Utility Rates Affect Me?
New Jersey electric utility customers could be in luck next month! That’s because the New Jersey Board of Public Utilities (NJ BPU) has approved new state utility rates recently following the state energy auction. And, for customers of the state’s utility companies, bills look set to go down! Let’s dive into why this is happening, who it affects, and what’s the best thing for NJ electricity shoppers to do about it.
Why are Utility Rates Changing Anyway?
For two decades now, the NJ BPU has held annual energy auctions. These auctions allow regulated utilities (ACE, JCP&L, PSE&G, and RECO) to purchase electricity from generators. The NJ BPU then approves the purchasing rates as the Price to Compare (PTC). Utilities must pass this rate onto their consumers without any markup. Remember, these guys aren’t allowed to make a profit on the cost they secure at auction! So lower utility rates mean they’ve secured good prices on their end.
Now, these lower rates might come as a surprise! Aren’t utilities bills increasing substantially across the US? Here’s the thing: in New Jersey, electricity required for any given year, say 2022/3, is secured in a bidding process spread out over three years. It’s a process designed to blend out the impact that any market price spikes could have on consumers. And it explains why recent rate spikes aren’t biting NJ utilities customers quite so hard yet.
What Does this Mean for my Bills?
Let’s get to the juicy part. What kind of discounts can NJ utilities customers expect when this new PTC rate kicks in? Reports predict average estimated bill decreases of 2.8% for PSE&G customers, 2.4% for RECO, 1.9% for ACE, and 1.1% for JCP&L. These are substantial numbers under normal circumstances. But in the midst of an energy price crisis, they could prove a real lifeline!
What New Utility Rates Mean for You
So what does this good news mean for you, NJ electric shopper? Well, if you’re not a utilities customer, you’ll want to keep your eye on that lower PTC rate. That’s because there’s a chance it could offer a great deal relative to what’s available on the retail supplier market. But don’t take your eyes off that market, either. Retail suppliers will be watching the PTC too, and pushing to stay competitive. So you could get some even juicier deals by shopping around.
And, perhaps most importantly, don’t rest easy on this lower utilities rate! This whole auction process repeats annually, with the next one approaching in early 2023. With natural gas prices still rising, the knock-on effect on electric rates could be substantial next year. So bask in those lower bills. But, once again, keep clued up on your other options.
Enjoy Cheap Electric Rates Today!
The approval of new utility rates is great news for many NJ electricity consumers. Just be careful not to get too comfortable. These rosy new utility rates starting June 1 could change their hue next year as 2022’s price spikes begin to kick in. So always keep one eye on third party providers – and you can give them a browse now, over at www.NJenergyratings.com!