New Jersey Moves Forward With Annual BGS Auction

New Jersey Moves Forward With Annual BGS Auction

Source: Cozen O’Connor’s Energy, Environmental and Utilities Group “News Concerning Recent Developments in Energy and Environmental Law” Newsletter, August 16, 2011

On May 16, 2011, the New Jersey Board of Public Utilities (BPU) initiated the annual process for New Jersey’s four Electric Distribution Companies (EDCs) to participate in auctions to procure billions of dollars of electric supply to service their basic generation service (BGS) customers for the period starting June 1, 2012. BGS auctions have been held each February since 2002.

Two auctions will take place. The BGS-CIPEP auction will procure energy for large customers on an hourly price plan and the BGS-FP will procure energy for small commercial and residential customers on a fixed-price plan. BPU must approve the results of the auctions.

The four EDCs, Public Service Electric and Gas Company, Jersey Central Power & Light Company, Atlantic City Electric Company, and Rockland Electric Company, submitted a joint proposal to BPU on July 1, 2011, which contained their rate proposals, the proposed Auction Rules, and Supplier Master Agreements, to be used by energy generators who wish to participate in the auction process.

New Jersey’s Rate Counsel submitted a discovery request to the EDCs on July 22, 2011 and were required to respond by August 9, 2011. (A full calendar of upcoming BGS deadlines can be found here.) In past years during BGS proceedings, the Rate Counsel has consistently advocated for the establishment of a portfolio manager to manage supply procurement for BGS-FP customers. Rate Counsel has stated that the addition of a portfolio manager would allow greater flexibility in securing resources outside of the BGS auction process, which could translate into potential ratepayer cost savings. General information on the BGS auction can be found here.

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