The shape of power companies in New Jersey has changed as the Energy Choice and Competition Act has evolved. Prior to electric choice New Jersey consumers were forced to buy their power supply from monopolies who were regulated by the NJ Board of Public Utilities. NJ electric choice has allowed new power companies to enter the market, however the old regulated power companies still serve a very important role.
The previously regulated power companies of New Jersey – PSE&G, JCP&L, Atlantic City Electric, Rockland Electric – were once responsible for all phases of the energy business for their given territories. This included purchasing power from generation facilities and then delivering that power to homes and businesses throughout New Jersey.
New Jersey electric choice has taken the power purchase responsibility away from the original power companies, such as PSE&G, so that they can focus on delivering the power to properties, as well as responding to power failures and emergencies. Choice allows customers to purchase power from a variety of NJ power companies, some of which might focus on providing electricity at the cheapest rate, while some might market themselves as clean power companies who sell green energy.
However, even if you choose to buy your power from an alternative power company, you still remain a customer of PSE&G due to their state granted responsibility of power delivery. The PSEG electric bill is divided into “Delivery Charges” and “Supply Charges”. The delivery charges remain regulated by the NJ Board of Public Utilities. These charges are the same no matter which electric company a consumer chooses.
The supply charges are open to competition. If you do not shop for competitive electricity prices you pay a default rate through PSE&G. However, PSE&G does not profit form the Supply default rates, known as the Basic Generation Service (BGS) rates. Many people are unwilling to shop for lower electricity prices because they want to remain loyal to PSEG, however PSEG wants their customer to find lower electricity rates as their bottom lines are not effected when their customers choose competitive power companies.
In addition to acting as the sole power delivery company in their territory, PSE&G is also responsible for sending the monthly electricity bill to customers. After a competitive power supply rate is chosen, the selected rate simply replaces the BGS default rate on the PSE&G electric bill. PSE&G still has an important role in the New Jersey electricity market. Choice simply gives New Jersey consumers options; they can elect to do nothing and pay PSE&G default rates, or they can power shop and lower their electric bill or shop for green energy options, the choice is yours!
Here are current low electric rate offers for PSE&G residential customers: