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New Jersey Completes Third Consecutive Auction of Basic Generation Service for its Electricity Customers; $24 Million Annual Savings Projected

The state of New Jersey has announced that its electricity customers will receive nearly 12,800 megawatts of electricity, valued at $5.1 billion, during the next three years from 15 different competitive wholesale and retail power suppliers. These totals were the result of the state’s annual electricity auction, which was certified by the New Jersey Board of Public Utilities (NJBPU) earlier this month.

The 2004 auction marks the third consecutive year that the state has successfully completed a competitive procurement process for basic electric power generation service to meet demand for New Jersey customers. Further, the process confirms that energy consumers reap significant benefits when properly conducted competitive procurement programs are the result of a fair, transparent and accurate process.

“New Jersey is the only state in the country to secure its entire electric needs with an auction,” said NJBPU President Jeanne M. Fox. “We have once again been able to take advantage of a very robust and active energy market at the wholesale level and get the best possible electric prices for our homes and businesses.”

Much like the state’s 2003 program, the 2004 process featured two simultaneous multiple-round auctions—a fixed-price service for small- and medium-sized customers, and an hourly priced service for the state’s largest customers, known as the commercial/industrial energy prices (CIEP) group. Successful bids ranged from about 5.3 cents to 5.6 cents per kilowatt-hour. Despite a significant increase in natural gas prices during 2003, the NJBPU reported that consumers will save approximately $24 million annually.

The winning bidders in the CIEP group were Consolidated Edison, Constellation Power Source, Dominion Retail, PPL EnergyPlus, PSEG Energy Resources & Trade and Select Energy. In the fixed-price group, the winning bidders were BP Energy, Conectiv Energy Supply, Consolidated Edison Energy, Constellation Power Source, DTE Energy Trading, FPL Energy, J. Aron & Co., Morgan Stanley Capital Group, NRG New Jersey Energy Sales, PSEG Energy Resources & Trade, Reliant Energy Services and Select Energy.

For more information on the New Jersey program, refer to the NJBPU Web site at www.bpu.state.nj.us. For more information on competitive procurement of electricity generally, contact Samantha Slater at sslater@epsa.org, or call 202.628.8200.