I'm going to tell you something that should make you a little angry: New Jersey ranks in the top five most expensive states for commercial electricity, and yet most NJ businesses are still paying their default utility rate like there's no alternative. There is. It's called the third-party supply market, and it's been sitting there since 1999, waiting for you to notice.

New Jersey's Market Structure

New Jersey deregulated its electricity market back in 1999 with the Electric Discount and Energy Competition Act. The basic idea? Your utility still delivers the power, but you get to choose who supplies it. Four major Electric Distribution Companies (EDCs) handle the wires-and-poles side of things:

• PSE&G — New Jersey's largest utility, serving northern and central NJ including Newark, the Jersey Shore, and much of the I-95 corridor
• JCP&L (FirstEnergy) — Serving central and western NJ
• Atlantic City Electric (Exelon) — Serving southern NJ
• Rockland Electric — Serving a small portion of northern NJ

If you don't pick a supplier, you get the Basic Generation Service (BGS) rate — a default price set through an annual statewide auction. It's one of the biggest competitive procurements in PJM. Sounds fair enough, right? Well, here's the problem.

Why BGS Rates Are Not Your Best Option

The BGS auction is competitive, sure. But it's competitive for the average customer, not for you specifically. Suppliers in that auction are pricing to serve a big blended smoothie of residential, small commercial, and large commercial load all mixed together.

And here's the thing: if you're a commercial customer with predictable usage, concentrated operating hours, and a measurable demand profile, you're a much better bet for a supplier than that blended pool. You're lower risk. Lower risk means lower margins. Lower margins mean lower rates. It's not complicated.

How much lower? Across our NJ commercial portfolio, we consistently see supply savings of 12-22% versus BGS rates. And that's before we even touch capacity cost optimization or contract term management. So why are you still on BGS?

PJM Capacity Costs: New Jersey's Burden

Now let's talk about the part of your bill that nobody wants to explain to you. New Jersey sits in PJM's eastern footprint, where capacity costs run hot due to transmission constraints and load density. The state's capacity zones have historically cleared at premium prices in PJM's auctions, and there's no sign of that changing.

For NJ commercial customers, capacity charges can eat up 20-30% of your total electric costs. Let that sink in. Nearly a third of your bill might be capacity, and most businesses never even look at it. Here's what you need to know:

• Peak Load Contribution (PLC): Your capacity obligation is based on your metered demand during PJM's five coincident peak hours. New Jersey's summer peaks typically occur on the hottest July and August afternoons.
• Capacity price volatility: PJM auction results have produced wild swings — from low prices in some years to eye-popping levels as generator retirements tighten supply margins. You can't just set it and forget it.
• Demand response opportunity: PJM's demand response programs allow NJ businesses to receive capacity credits for curtailing load during emergency events. These credits directly offset your capacity obligation. Free money? Not quite, but close.

Natural Gas in New Jersey

Good news: New Jersey's natural gas market is also deregulated. PSE&G, New Jersey Natural Gas, South Jersey Industries, and Elizabethtown Gas serve as distribution companies, and you can pick a competitive gas supplier through each utility's transportation program.

Bad news: NJ's gas market is influenced by Transco Zone 6, one of the most volatile natural gas delivery points in the eastern U.S. When winter hits hard, heating demand fights power generation demand for limited pipeline capacity, and prices go haywire — sometimes multiples of normal levels. If you're not locking in winter gas supply during the summer when prices are sane, you're gambling. And the house usually wins.

The Clean Energy Factor

New Jersey has big clean energy ambitions — a 50% Renewable Portfolio Standard by 2030, significant offshore wind commitments, the whole package. And guess who pays for it? You do. Through Societal Benefits Charges (SBC) and other rate riders that show up on your bill regardless of which supplier you choose. These are non-bypassable. There's no way around them.

That said, if your company has sustainability goals, there's a silver lining. NJ's renewable energy market is active enough that you can procure green power at increasingly competitive rates, sometimes bundled with RECs for your ESG reporting. The premium for 100% renewable supply has shrunk dramatically as wind and solar capacity in the region has grown. So at least there's that.

Taking Action in New Jersey

Here's the bottom line. Because New Jersey's rates are so high, the dollar savings from smart procurement are proportionally huge. A mid-sized commercial operation spending $500,000 a year on electricity that shaves 18% through competitive procurement? That's $90,000 back in your pocket. No new equipment. No operational changes. No lightbulb swapping. Just better purchasing.

The process is simple: share your bills, we analyze your usage, and we show you what the market will actually offer for your specific load. In New Jersey, the math almost always works. The only question is why you haven't done it yet.