Many New Jersey Businesses to Experience an Increase in Electric Supply Rates in January, 2018
Is your fixed rate energy contract really fixed? In most cases, the answer is an astounding NO!
PSE&G, New Jersey’s largest public utility recently published its annual transmission formula update for 2018. The new formula will become effective on January 1, 2018. It will result in a measurable increase in the Network Integrated Transmission Service (NITS) component of electric supply rates. This means most businesses that participate in the NJ Energy Choice program by choosing a 3rd party electricity supplier will see an increase in the supply portion of their monthly electric bill starting with the February invoice which is for January usage.
In most cases, energy contract language allows for adjustments to fixed rate contracts due to a change in law, which this would qualify. Due to the sharp increase of the size of the NITS adjustments some suppliers mention it specifically in their fix rate contracts. The adjustment is a pass through charge. It is usually listed as a line item labeled adjustment on a utility invoice. Most suppliers are expeditious in adjusting their billing systems. However some are slower in adjusting their billing systems and will retroactively pass through the increase later in the year.
After analyzing the new formula, NJGEC has determined the following. The impact on fixed supply rates could be in excess of 7% or over a half a cent per kWh. Consequently this will impact an account with an annual usage of 250,000 kWh by $1500 or more.
Due to the fact that not all 3rd party suppliers are expeditious in updating their pricing curves, it is essential to beware of electric rate contract quotes that appear to be measurable lower than the majority of supplier quotes. Quite often this is due to a supplier’s failure to update their pricing curves in a timely manner. Unfortunately, some suppliers delay updating curves to gain a competitive advantage taking advantage of inexperienced brokers and unsuspecting customers. This is one of the many reasons to work with an experienced energy consultant, like NJGEC. We strive to deliver transparency allowing you the ability to make an apples to apples comparison. In contrast many brokers, especially the multi-level marketers and electronic auction platforms fail to deliver such transparency.
If you have any questions or want to determine if this increase will impact your company’s electric supply rates, call NJGEC. We will provide a complimentary energy strategy analysis.