Territories: New Jersey

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The Start of Deregulation

In 1999, the New Jersey state legislature passed the Electric Discount and Competition Act. This legislation allowed New Jersey customers to shop competitively for the supply of their electricity, rather than being forced to purchase from the local utility company (ie. PSE&G, JCP&L, O&R, ACE, etc.) New Jersey officially transitioned onto a deregulated power market in August 2003.

New Jersey EDC Map

Utility Companies & Rates

There are four major utility companies providing power to the state's electric users. For customers that do not choose a third-party supplier, the utility company will serve as their supplier by default. Utilities cannot earn any profit on the supply of power to its customers. Customers are broken into two main categories:

  • For customers with demands less than 1,000 KW, the local utility purchases power on their behalf each year.

    750 KW represents approximately $50,000 each month in electric supply*, and these customers are offered a fixed price that resets each June.
  • Customers over 1,000 KW purchase through through the CIEP program.

    CIEP, or Commercial and Industrial Energy Pricing, means that customers pay the real-time price per kilowatt hour (kWh) for each kWh of electric that they use that hour. CIEP pricing is extremely volatile and subject to the retail premium described below.

To further encourage businesses to take control of their electric spend and explore all options, all business with a peak load contribution greater than 750 KW are assessed a $0.005 / kWh "penalty" should they remain with the utility.

Third-Party Supplier Value in New Jersey

For customers with less than 1,000 KW peak annual demand (Rate classes GLP and LPLS), there is typical savings of up to 10% - 20% with a fixed price (What is a fixed price?) with a third-party supplier, and up to 35% with an indexed price (What is an index price?). LD Energy works with companies to determine the best way for your business to purchase, and helps you achieve savings with the best suppliers suited for your business, with a level of risk you a comfortable with.

For customers over 1,000 KW demand, alternative suppliers can help fix/hedge part or all of the cost for your electric for price stability, and long-term savings. Volatility in CIEP pricing can be difficult for one's bank account on a month by month basis. Over the long term, there is a upward trend in overall pricing, which can be hedged in today's market. Proper planning and hedging can help you create a long-term procurement strategy which can provide you budget stability and short-term / long-term savings.

 
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