PSEG will update their BGS rates for electricity customers on default rate service on October 1, 2017, which will mark the beginning of the PSEG winter rate period. The New Jersey utility updates their BGS rates – which stands for “Basic Generation Service” – twice a year on the first of October and June. BGS prices are determined by a series of auctions that occur over a three year period which helps smooths out large fluctuations in the wholesale energy markets that might occur.
Alternative electricity suppliers are offering rates that compare well to PSEG’s BGS default prices. The competitive rates can reduce PSEG customer’s electricity bills as the alternative supplier’s rate replaces the BGS price when a switch is made. Competitive PSEG electric suppliers are often able to undercut the utilities supply price for electricity by reacting quicker to drops in the wholesale energy market. Competitive suppliers purchase large blocks of energy through the wholesale market and then sell it to consumers through the retail market set up through the New Jersey Energy Restructuring and Competition Act.
Electricity choice in the PSEG service area has resulted in lower electric bills for customers who are shopping for rates provided by competitive New Jersey electricity suppliers. In addition to lower electricity rates some suppliers are also selling rate products that have added incentives to customers such as cash gift cards. Despite the numerous incentives, as of June 2017 only 11.8% of residential PSEG customers were purchasing their power from an alternative supplier. The switch percentage in PSEG is well behind other competitive markets both in New Jersey and other energy choice states.
The longer New Jersey electricity suppliers are able to offer fixed rates that are below the PSEG BGS price, the more customers will likely start shopping for the first time. Consumers are still under educated on the benefits of electricity choice as well as the procedures. Customers may not know that they can easily reduce the supply portion of their PSEG electric bill by 10% with a few clicks on their phone or computer through the electricrate.com online comparison tool. Below are competitive electricity rates offered by suppliers who are licensed in New Jersey.