New Jersey commercial energy: BGS and choice

Two ways to be on utility supply, and both carry a New Jersey catch

New Jersey splits a commercial electricity bill into supply and delivery, and the supply half is competitive, but the state attaches two specific conditions to sitting on utility supply instead of shopping. A commercial or industrial customer with a peak load of 750 kilowatts or more pays a retail margin on utility supply — a per-kilowatt-hour addition that does not apply if it buys from a third-party supplier. A customer at 1,000 kilowatts or above is placed on hourly pricing, where the supply cost follows the actual hour-by-hour cost of generation rather than a fixed rate. Both rules are set by the Board of Public Utilities, and both mean that a large New Jersey account which has never shopped is not on a neutral default: it is on a default that actively rewards looking at the alternative. Both thresholds are load-based, so a site's class can change as its peak grows — an account can cross the line by adding equipment rather than by renegotiating anything.

• Supply and delivery are separate on every New Jersey commercial bill.
• Peak load of 750 kW or more: utility supply carries a retail margin.
• Peak load of 1,000 kW or above: supply is priced hourly.
• Both thresholds are set by the Board of Public Utilities.
• The margin does not apply to third-party supply.

The default supply is procured at auction, not set by the utility

Basic Generation Service is New Jersey's default supply, and the utilities do not set its price — they buy it. Each year the Board runs descending-clock auctions in February and certifies the results; the most recent, the state's twenty-fifth, was certified on 12 February 2026 and set supply cost for a twelve-month period beginning 1 June 2026. The four regulated electric distribution companies — PSE&G, Jersey Central Power & Light, Atlantic City Electric and Rockland Electric — procure together, and none of them earns a profit on the supply: the auction cost is passed straight through to ratepayers. The practical consequence is that the default is a market outcome, so it moves with wholesale energy and capacity even when nothing about a customer's own usage has changed. Comparing an offer against "the utility rate" means comparing against an auction result that was dated the moment it was certified. A customer measuring today against last year's default is measuring against a price that no longer exists.

• Default supply is Basic Generation Service, procured at auction.
• Auctions run in February; the Board certifies the results.
• The 2026 result covers twelve months from 1 June 2026.
• PSE&G, JCP&L, Atlantic City Electric and Rockland Electric procure together.
• The utilities pass the auction cost through without earning on it.

The two auction products, and where the class line falls

The auction runs as two products. Residential and small-to-medium commercial accounts sit in BGS-RSCP, which is laddered: each year's auction secures one-third of the load across a three-year commitment period, so the price a small account sees is a blend of three auction years rather than a single result. Large commercial and industrial accounts sit in BGS-CIEP, a full-requirements product bought for a single year; its energy is priced at the spot market and the auction price is there mainly to cover generating capacity and the state's renewable portfolio standard. The two cannot be swapped, and the line between them is a load threshold, which is why a business standing near it should establish which class it falls into before comparing anything. Even inside CIEP, most load is not on the utility default at all: as of December 2025, about 81 per cent of the class was served under individual contracts with third-party suppliers. The practical reading is that CIEP is a pass-through benchmark for a minority of its own class, while most of that class has already left it.

• BGS-RSCP covers residential and small-to-medium commercial accounts.
• RSCP buys one-third of load a year across a three-year commitment.
• BGS-CIEP covers large commercial and industrial accounts for a single year.
• CIEP is a full-requirements product priced to cover capacity and the RPS.
• The class line is a load threshold, so confirm which class an account sits in.

PJM capacity sits inside the supply price

New Jersey is in PJM, and the capacity that PJM buys through its Reliability Pricing Model is a supply-side cost, not a delivery charge, so it reaches the customer inside the supply line whether the supplier is the utility or a third party. The state has been an active participant in that market: after New Jersey and other member states pressed federal regulators over projected capacity price spikes, a price collar was adopted in February 2025 that puts both a ceiling and a floor on what capacity can clear at, and the Board's 2026 auction result was held down in part by that collar. For a buyer the point is structural: a fixed-price offer embeds an assumption about future capacity cost, and a pass-through offer does not, so the two are not comparable until the treatment of capacity is stated on both sides. Capacity is also the least predictable component, because it is set by an auction for a delivery year that has not yet begun.

• Capacity is bought in PJM's Reliability Pricing Model and lands in supply.
• It reaches the customer inside the supply line, not the delivery tariff.
• A federal-approved price collar has capped and floored capacity prices since 2025.
• A fixed offer embeds a capacity assumption; a pass-through does not.
• Ask how capacity is treated before comparing two offers.

How a New Jersey competitive contract is billed and paid

New Jersey runs a consolidated-billing and purchase-of-receivables arrangement, which changes the shape of a competitive contract in a way that matters to a business with thin credit or a short operating history. Under Utility Consolidated Billing, the distribution utility puts the supplier's charges on the utility bill rather than leaving the customer to pay two invoices, and under Purchase of Receivables the utility buys the supplier's receivable, collects from the customer and remits to the supplier. The customer keeps one bill and one payment relationship; the supplier carries less collection risk, which is one reason a small or new account can be served at all. It also means the delivery charges on that bill are unchanged by the switch — they are the utility's, set by tariff, and they persist whoever supplies the commodity. Confirm which billing structure applies before comparing, because a two-invoice arrangement adds an administrative cost that never appears in the supply price.

• Utility Consolidated Billing puts supply charges on the utility bill.
• Purchase of Receivables means the utility buys and collects the supplier's receivable.
• The customer keeps one bill and one payment relationship.
• Reduced collection risk is one reason small accounts can be served.
• Delivery charges are the utility's and do not change on a switch.

Governmental aggregation, and whether it reaches a business account

New Jersey authorises governmental energy aggregation, which lets a municipality or county buy supply in bulk and enrol accounts on an opt-out basis, and it is a different mechanism from a utility programme or a competitive contract. A programme must be approved and overseen by the Board before it can operate, so an enabling statute and an operating programme are separate facts: a town may hold the authority and run no programme at all. Where one exists, the smaller classes are typically the ones included, which means a business near the eligibility line should confirm whether its account was enrolled automatically rather than assume it controls the supply decision. The default for an account outside any programme is Basic Generation Service, procured through the Board's auctions. The Board publishes the licensed suppliers for each utility's territory and runs the state's shopping site, NJ Power Switch, as the starting point for checking who is actually licensed in an area.

• Governmental aggregation lets a municipality or county buy supply in bulk.
• Enrolment is opt-out, and the Board must approve and oversee a programme.
• Having the power to aggregate is not the same as running a programme.
• Smaller classes are typically the ones a programme covers.
• Outside a programme, the default is Basic Generation Service.

What to establish before signing a New Jersey contract

The questions that change the real cost in New Jersey are the ones about shape, not the headline. Establish whether the offer is fixed, floating or a hybrid of the two, and what index a floating price tracks. Check the usage band: a clause that reprices or penalises when usage moves significantly above or below an assumed level can matter more than the supply price itself. Confirm the contract length and any early-termination charge, and whether the price includes New Jersey sales tax and other charges. Then confirm the billing route — one consolidated utility bill or two — and line the whole thing up against the actual default, at the account's own usage and class, rather than against an assumed utility rate. Availability and terms depend on the service address, the meter and the distribution utility, and not every address has a competitive option. An inquiry places no order and switches no supplier, and HighGround may receive compensation from providers on completed purchases.

• Establish whether the offer is fixed, floating or hybrid.
• Check the usage band and any repricing or penalty for volume swings.
• Confirm term, early-termination charge and tax treatment.
• Confirm whether billing is consolidated on the utility bill or separate.
• Compare against the actual default at your own usage and class.
• An inquiry places no order and switches no supplier.

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