PSE&G electricity customers in New Jersey paying basic generation service rates, the PSE&G default rate, are paying among the highest electric rates in the country.  The basic generation service rates are supply electricity rates that PSE&G charges customers who have not selected and alternative electric generation supplier.  These default rates are based on a series of auctions that PSEG holds for their customers.  Electricity suppliers compete to provide rates for a percentage of the PSEG default customers.

PSE&G passes the supply rates from the electricity companies who win at the auction directly on to customers.  So even when a customer pays the basic generation service default rate, they are still paying money for their supply service to another electric supplier other than PSE&G.

Lower electric rates can be selected by customers who take the time to shop and find their own electricity supplier.  When the auction for default rates takes place electricity suppliers have to take into account that a certain percentage of customers will leave the basic generation service during the year.  For example, if an electric company wins the right to provide default service for 100,000 customers starting in June, they have to put a premium on the price taking into account that there is a probability that 15% of these customers might sign a contract with an alternative electricity supplier who is offering a lower electric rate.

When electricity suppliers market their service and rates to individual customers, they do not have to include a premium since they are pricing for one entity.  This results in lower rates and savings on the PSE&G electric bill.

Here are some current offers and savings for electricity customers in PSE&G:

Today PSE&G serves as the electricity delivery company for over two million residential and business energy customers living in New Jersey, including major suburbs of New York City and Philadelphia.  PSEG used to be a full functioning regulated electricity company, taking care of all aspects of electricity, generation, transmission, distribution, and customer service.  Now that New Jersey has enacted energy choice, PSE&G is now only in charge of delivering power, transmission and distribution, to their customers.

While New Jersey customers have a choice of who supplies their electricity they do not have a choice of who delivers the power to their homes and businesses.  Many consumers in the PSE&G service territory are reluctant to shop for lower electric rates because they feel loyal to PSE&G.  This is the wrong way to view electricity deregulation.  Even when a customer chooses an alternative electricity company to provide power, that person still remains a customer of PSE&G as PSE&G continues to act as the electric utility company delivery power to the property.

When a PSE&G customer receives their electric bill they will notice that the bill is divided into two sections; delivery and supply.  The delivery charges are those charged by PSEG to deliver power as well as maintain the lines and wires.  The electricity delivery charges are regulated by the New Jersey Board of Public Utilities.  The supply section of the electric bill is the part that customers have a choice and can compare electricity rates among other companies.  PSEG customers who do shop pay a default electric rate that PSEG is tasked with charging.  PSE&G does not receive a profit from these default supply charges as stipulated in the New Jersey Electricity Choice and Competition Act.

In addition to PSEG’s service of delivering power and providing default supply rates, they also continue to provide customers with their monthly electric bill.  Even after a PSEG customer chooses an alternative electricity company to provide their electric supply service, the customer will continue to receive one electric bill from PSE&G, in most cases.  It is possible that the alternative electric supplier will want to send their own invoice in which case you will receive two bill, one from PSE&G and one from the chosen supplier.  However, in most cases the competitive electricity companies choose to have their charges billed as a separate line on the PSE&G bill.

The competitive electricity company’s rate takes the place of the PSEG default supply rate, and if the chosen rate is lower than the default rate the customer saves money on their electric bill.  Here are some competitive electric rates that are currently lower than PSE&G default rates.

Rockland Electric delivers electricity to just under 63,000 residences in northern New Jersey.  Though electricity choice has existed in New Jersey for several years, competitive electricity companies have just recently started offering competitive electricity rates in the Rockland Electric area.

Though, as of December 2010, only 1.8 percent of the residential customers have chosen an alternative electric supplier, Rockland Electric residential customers can save as much as 18% versus the Rockland default rates.  Rockland Electric offers default electricity rates for those customers who do not shop and compare electricity offers.

People have been slow to shop the competitive energy market in the area mostly because they are unaware of their choices.  Of the four incumbent electricity utility companies in New Jersey, Rockland Electric is by far the smallest.  Because of this, the competitive electricity suppliers are focusing more of their marketing efforts on the bigger utility areas of PSEG and JCPL, even though the greatest savings opportunities currently exist for Rockland customers.

It is expected that more and more Rockland Electric customers will shop for lower rates in 2011 as they become more familiar with their electricity choice options.

Rockland Electric Price to Compare – $0.1215
	$0.097 /Kwh	20% Savings

PSEG electricity customers are finally able to save money on their electricity bills by choosing a lower rate than the default PSEG rates.

In recent years, electricity suppliers had been slow to enter New Jersey electricity market.  Now that the electricity companies are able to offer electric rates that are lower than the  utility basic generation service rates, companies have entered the market and are offering their service to PSEG customers.

To see if money will be saved, customers should look at the “Supply” section on their PSEG bill.  There they will find the electric rates that can be compared to alternative electricity company offers.  Electric savings are currently being offered by as much as 12.4%, but not all offers result in saving, so it is important for customers to compare rates.  Some PSEG bill payers are even choosing to pay more on their electricity bill for the right to buy 100% wind power or other forms of green energy.

Customers who shop for lower power rates might also find promotions that can further sweeten the deal on top of electric bill savings.  PSEG customers will still receive their electric bill from PSEG even after they switch electric suppliers.

The best offers, (lowest rates plus promotions) for fixed and variable electric rates, that we have found are below:

PSEG electricity customers can save money on the supply portion of their electric bill by buying their power from an alternative supplier.  PSEG default electric rates, labeled Basic Generation Service (BGS) by the state of New Jersey, are currently higher than some competitive offers.

The delivery portion of the bill remains regulated and serviced by PSE&G.  Some electric companies offer dual billing in which you receive one bill from PSEG Energy for the delivery portion, and a separate bill for the supply charges from the alternative electricity company.

The more popular choice is to receive single, or consolidated, billing where you get one bill per month from PSEG.  On the PSEG electric bill the delivery charges would remain the same, and the supply charges would be that of the alternative electric supplier who you sign a contract with.

PSE&G posts the total “Price to Compare” at the bottom of the electric bill even after a customer has chosen an alternative electric supplier to provide electricity.  By doing this, a customer can see how much money they are actually saving every month.

PSEG electricity customers on default service will pay $0.11481 per KWh from now until the end of May 2011.  They will then pay about $0.1200 (depending on their total usage) in the summer months of June through September.

PSEG customers can save money by choosing:

Seven years after New Jersey officially deregulated their electricity market, residences of the state are finally seeing competitive electric rates that can save them real dollars off of their monthly electric bill.

If you are a customer of PSE&G, JCP&L, Rockland Electric, or Atlantic City Electric, savings can be found by shopping the competitive electricity market for lower prices.  Alternative electric suppliers had been slow to enter the New Jersey market for a variety of reasons.  However, a significant drop in wholesale electric prices combined with high utility default rates, have given electricity companies a great reason to get licensed by the state and market their services and rates to New Jersey customers.

Residential customers can choose between a variable electric rate that can fluctuate month to month but gives the customer the option to leave the service at any time, or a fixed electric rate that locks in your rate for a specific period of time, usually anywhere from 4-24 months.

Here are the residential electricity rates available in New Jersey at this time:
PSEG Rates

JCPL Rates

Atlantic City Electric Rates

Some of the companies are running introductory offers with cashback bonuses.

For a low variable rate with a $50 Cashback Bonus introductory offer, click here.
Low fixed rate offers with a Visa Prepaid card up to $75 can be found here

In most cases, including the offers above, even after you switch electric suppliers you will still get your monthly electric bill from your utility company.  The utility companies (PSEG, JCPL, Rockland, Atlantic City Electric) are still regulated lines and wires company and are responsible for billing residential electric customers.  They only provide a default electric rate to residential customers because they are required to do so by the state under the terms of the New Jersey Competition and Electric Choice Bill.

This article pertains to commercial and industrial electricity customers in deregulated markets where Integrys Energy is active, including but not limited to Maryland, New Jersey, Pennsylvania, Connecticut, Delaware, and New York.

Integrys Energy has offered electricity contracts with misleading rate quotes to commercial and industrial customers.  If you are deciding to use Integrys Energy as your supplier it is extremely important that you either review the contract thoroughly, or work with a consultant or energy broker who is equipped to do so.

As a business electricity customer, here is what you need to know:

Every deregulated electricity state divides their bill into two basic parts, the regulated delivery part and the competitive supply part.  Depending on who is your local regulated utility will depend on how these charges are viewed on your bill.  Sometimes, like in the case of PSEG in New Jersey, the two parts are clearly divided.  Other times, like in the case of PPL in Pennsylvania, the charges are not so clearly separated.

The competitive supply portion of the bill can further be separated into several components (energy charge, transmission, capacity, line losses, etc.).  When you receive a competitive rate offer from an energy supplier, the rate should include every component of the competitive supply portion.  However, what some suppliers do is give a quote that only includes a portion, and then passes on the rest of the charges in a subsection on the bill.

So for example, you might get an offer from Electric Supplier (A) for a rate of 8 cents that includes every aspect of the competitive supply part.  Then Electric Supplier (B) might offer you a rate of 7 cents that only includes part, say the energy charge, of the competitive supply part.  The remaining part of the competitive supply part (transmission, capacity, line losses) will show up on the bill in a different section, and all of a sudden 7 cents is really 9.5 cents.

Integrys Energy practices the method of Electric Supplier (B) from the example above.  Recently I reviewed a contract that they presented to a customer.  After reviewing the contract I found that the customer would have paid exactly double to what they thought they would have paid.  This is because Integrys divided the competive supply part into two sections, and gave both sections the same exact rate.  This was extremely misleading as the implementation of the exact rate for two different sections was designed to make it appear as if everything would be charged the single rate once.  But after taking a closer look, I was able to see that there would in fact be two separate charges.

To summarize the above paragraph, had the customer signed they would have paid:

6 cents per KWh for (energy commodity)

6 cents per KWH for (capacity, transmission, line losses)

12 cents total

The sales person representing Integrys presented the rate as 6 cents.  The customer thought that the 6 cents was a great offer compared to the 8 cents offer they were getting from another legitimate supplier (the 8 cents offer was found to include the entire portion of the competitive supply part).  In reality the 8 cents should have been compared to 12 cents, and not 6 cents.

People making electricity decisions for businesses need to be aware of these deceitful practices.

A simple way to do this is to email the sales person and ask them:  Does the rate include energy, capacity, transmission, line losses, and all other components of the utility price to compare?

Anything less than a “yes” means that there will be some surprises.

New Jersey electric customers have more rate options than ever before.  The four local utilities – PSE&G, JCP&L, Atlantic City Electric, Rockland Electric – all have default electric rates that are higher than competitive market rates for power.

Despite this opportunity for savings, only 3.3% (as of September 2010) of all New Jersey customers have switched away from default service on to lower rate structures.  Larger businesses have been quicker to switch as the Board of Public Utilities in New Jersey reports about 72% of the states largest customers (those using above 10o0 KW demand) have contracted out with alternative suppliers.

The consumers who can really benefit from electricity deregulation in NJ are the small business and residential customers.  The switch rate with these classes are extremely low.  Though New Jersey has had a deregulated electricity market for several years now, there has only been real savings opportunities available over the last 20 months or so.  NJ Electricity choice is still a new idea for many NJ residents.

What people in New Jersey should understand is that their local utility company is no longer responsible for their supply charges.  The utility companies, such as PSE&G and JCP&L, want their customers to shop for lower electric rates.  They do not profit off of the default service that they offer to customers who do not shop.  The utility companies are now soley in the business of delivering power.

We have found that most small businesses in New Jersey can expect to see savings between 10-20% if they take the time to shop the electricity market and compare prices.  Residential customers, depending on their utility, can see savings between 5-15%.

ElectricityWatch recommends customers look for electric prices that are fixed.
PSEG Rates

JCPL Rates

Atlantic City Electric Rates

Residential electricity customers in the PSE&G utility area are finding significant savings on the electric bills.  The summer of 2010 is the first summer in New Jersey where there has been real electricity choice for residential consumers.  Though power choices are still limited compared to some other deregulated states (Texas, Connecticut, Pennsylvania, New York, Maryland) New Jersey customers have found that energy deregulation can be a good when attempting to have lower electricity bills.

The lowest option for PSEG residential customers can always be found on our electricity prices page.  We have seen rates as low as  10.75 compared to the PSEG default price to compare rate of 12.24 for the summer months of June through September.  Bigger households have to pay even more as their rates rise to 13.21 cents per kilowatt hour after the consume 600 KWH every month, which is about how much a 1 bedroom apartment would use in the summer.  These results in savings between 12-19%.

Here are the current rates we found (updated daily):

PSE&G residential rates will be about 12.27 from October 2010 to May 2011.  What most people don’t realize is that even after you switch electric companies and start paying a lower rate, you remain a PSEG customer as they continue to monitor the lines and wires for the electricity and the billing component.  So at the end of the day, the only thing that changes is that you pay a lower New Jersey electric bill.

Though participation in the New Jersey electric choice program has been slow when considering the significant savings available, things have started to pick up as more people start to realize the electric savings potential.

States that have decided to deregulate, or restructure, their electricity utilities are giving their consumers the opportunity to lower their electric bills.  Misunderstanding how to lower the electric bill has been a problem for some of these electric rate payers.

As a simple review, the electric bill is divided into two main sections; the delivery (lines and wires) section and the retail supply section.  The delivery section is the portion of the bill, usually between 20-30% of the total charge, that is paid to the utility company for delivering the power through the lines and wires.  These charges are still regulated by the state.

The energy charge, also called supply charge, makes up the majority of the bill and is the section that has been deregulated.  It is here where customers can lower their electric bill by finding an alternative electric company that will supply electric power at a lower price per kilowatt hour than the current default electric rate that the incumbent utility offers.

Most default rates are set for a specific period of time.  You can lower your electric bill by finding out how long the default rate will be at a certain amount per kilowatt hour and then finding an alternative provider who will offer a lower electric rate for that period.  For example, the default rate for customers who are served by the utility PPL in Pennsylvania is $0.10402 per kilowatt hour for the entire year of 2010.  Locking in a fixed rate of $0.09 per kilowatt for any period in 2010 will give the customer a lower electric bill by 13.5% off of the energy supply portion of the bill.  It might be wise to lock in a low electric rate for a period that goes beyond the expiration of the current default rate if you think energy prices are headed up.

States where you can currently lower your electric bill against the utility default rate include Pennsylvania, Connecticut, New Jersey, Maryland and Delaware.  There are also saving available in Texas if you have not shopped the competitive electric market within the past two years.