Sponsored by:
Senator OWEN HENRY
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Requires BPU to allow certain bidding practices during basic generation service auctions.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning bidding in the basic generation service auction, and supplementing Title 48 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section:
“Basic generation service” or “BGS” means the same as those terms are defined in section 3 of P.L.1999, c.23 (C.48:3-51).
“Basic generation service provider” or “provider” means the same as those terms are defined in section 3 of P.L.1999, c.23 (C.48:3-51).
“Board” means the New Jersey Board of Public Utilities or any successor agency.
“Commercial and industrial energy pricing class customer” or “CIEP class customer” means the same as those terms are defined in section 3 of P.L.1999, c.23 (C.48:3-51).
“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes electricity to end users within the State.
b. Notwithstanding any law, rule, regulation, or order to the contrary, the board shall authorize a basic generation service provider to bid for one, two and three-year supply periods during a BGS auction. The board shall require the selection of the most price competitive bids. This subsection shall not apply to bids servicing CIEP class customers.
c. The board shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as may be necessary to implement the provisions of this section, including but not limited to, rules regarding the blending of previously secured three-year supply contracts with newly procured supply contracts.
2. This act shall take effect immediately.
STATEMENT
This bill requires the New Jersey Board of Public Utilities (board) to expand the bidding supply periods in basic generation service (BGS) auctions for certain customers. Currently, the BGS auction for Residential Small Commercial Pricing (RSCP) customers includes a staggered three-year rolling procurement process, where a RSCP customer’s bill reflects the average of three, three-year term contracts.
This bill allows electric generation service providers to bid for one, two, and three-year supply periods in BGS auctions for RSCP customers and requires the selection of the most price competitive bids.
It is the sponsor’s belief that three-year supply periods may increase the cost of electricity, as there may be upward pressure on pricing due to a need to account for certain unknowns. It is the sponsor’s belief that shortened timing for supply periods, as seen in similar auctions in certain other states, may present an opportunity to provide lower utility costs for certain New Jersey BGS customers.