TOM JOHNSON |reports for NJ Spotlight
Increases projected to be modest, after most recent power auction, but BPU does raise concerns about money utilities are pumping into transmission
New Jersey residential and small-commercial customers will likely see their monthly electric bills increase slightly this June, a mild reversal of the past few years when prices were relatively stable or dipped because of low natural gas prices.
Nevertheless, New Jersey Board of Public Utility officials described the 19th annual power auction conducted by the agency as an overall success, despite concerns that increasing investments in transmission upgrades are beginning to take a toll on customers.
“The cost of transmission has been out of hand and has been for a long time,’’ said BPU President Joseph Fiordaliso. “The rate of return is too high,’’ he added, referring to what utilities earn for making those investments.
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In the end, three of the four electric utilities will see their residential and small-commercial customers’ bills increase, topped by the state’s biggest utility, Public Service Electric & Gas, whose typical residential customers will see bills climb about 4.4%, or $5.20 more per month. The increases take effect on June 1.
Bills from Jersey Central Power & Light, the state’s second-largest electric utility with more than 1 million customers, will increase by 2.4% or by $2.09 a month; typical bills for Atlantic City Electric’s residential customers will rise by 0.3% or 40 cents monthly, while Rockland Electric customers will experience a drop of 1.6%, or $1.89 per month.
Costs for commercial customers
For larger commercial and industrial customers who buy electricity from independent suppliers, costs also will increase when compared to previous years, largely a result of increased demands to supply power from renewable sources and higher costs to provide the capacity to keep the lights on.
The boost in bills was largely foreseen by a consultant hired by the BPU who projected rising energy prices could boost costs as well as higher transmission expenses, most evidently seen by PSE&G customers.
“We expected to see higher prices and that’s what we got,’’ said Frank Mossburg, managing director of Bates White, which had been hired by the board to oversee the auction. The higher charges also were caused by lower prices expiring under contracts purchased three years ago in a prior auction.
PSE&G pumps money into transmission
Transmission was a factor in all of the increases, but none more significant than PSE&G, which has been investing huge amounts of capital into transmission upgrades. In a five-year plan outlined last year, it sought to invest $5 billion in transmission upgrades.
But PSE&G argued that despite the increase, customers still spend less than they did more than a decade ago.
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