Analysis of 2016 BGS Auction

New Jersey Division of Rate Counsel
Project completed May 2016

Since 2005, Synapse has provided analysis of New Jersey's Basic Generation Service (BGS) procurement options for the New Jersey Division of Rate Counsel. The BGS procurement process includes annual auctions held by the State of New Jersey for the procurement of fixed-price, basic electric generation service (BGS-FP). BGS-FP service is the name of the rate plan for those residential and small commercial customers who choose not to use a competitive supplier for their electricity needs. Synapse's BGS procurement analysis takes into consideration the BGS auction process and other factors relevant to procurement options for NJ BGS customers. Synapse's analyses include assessment of procurement options in other states; futures markets for electricity, natural gas, and coal; recent auction/RFP results for BGS-FP-equivalent services from other states; PJM technical issues affecting BGS procurement considerations; and other relevant issues. Synapse’s analysis of the 2016 BGS Auction examined the price divergence observed between the PSE&G service territory and the other electric distribution companies. Synapse found that higher prices for the PSE&G territory are related to significantly high transmission charges compared to other New Jersey Electric Distribution Company utilities.