In 1997, energy deregulation became an idea in the state of New Jersey, with the Energy Master Plan in place. This plan was created with the focus on all New Jersey residents being able to be able to pick their electricity provider by 2001.
Then, later on in 1999, energy deregulation finally began. As part of the Electric Deregulation and Energy Competition Act, New Jersey joined only a small number of states that made the switch. Electricity rates were set at 5.3 cents per kilowatt, half the price that people were previously paying.
There was also the launch of NJ Powerswitch. This website provides consumers with advice on how to shop for energy, tips on saving energy and supplier lists.
However, many residents in New Jersey are still unaware they can switch energy suppliers. Looking at the statistics of customers switching suppliers, it is surprising that only about 20% of electric customers have switched in the state. With so many benefits, such as saving roughly 20% on electric rates, customers are missing out.
For those that did switch, Conectiv has stated that the deregulation has reduced their customer’s rates by 10.2 per cent. This has resulted in savings of up to $290 million from 1999 to 2003.
In New Jersey, there are more than 85 electricity suppliers to choose from. All of these suppliers will be offering different benefits to customers to try and compete for their business. This creates cheaper prices due to competition. Some of these suppliers include:
- Clearview Energy
- Constellation
- Frontier Utilities
- Verde Energy USA
For the maintenance and supply of electricity in the state, the responsibility was given to four utility companies in New Jersey. They are:
- Atlantic City Electric (ACE)
- Jersey Central Power and Light (JCPL)
- Public Service Electric and Gas (PSEG)
- Orange & Rockland
When looking at the current electricity rates for New Jersey, in October 2021, the average commercial electricity rate was17% higher than the national average at 13.57 ¢/kWh. For residential electricity, rates were 22% higher than the national average at 16.99 ¢/kWh.
One of the benefits that have been seen with other states is that renewable energy sources become more popular with increasing suppliers competing on the market. Many states have adopted renewable energy schemes and projects.
In 2019, 5% of New Jersey’s total electricity generation was from renewable resources, with solar power being the leading renewable energy source. In the same year, New Jersey was ranked seventh among the states in installed solar photovoltaic capacity.
However, roughly 75% of consumers in New Jersey use natural gas as their primary heating fuel. Natural gas, combined with nuclear energy accounted for 94% of the electricity generated at utility-scale.
The BPU or Board of Public Utilities is the agency that regulates the utilities in New Jersey. They oversee critical services including water, electricity, natural gas and cable television. The Board ensures that services are safe, as well as setting reasonable rates for customers in New Jersey.