General Overview on New Jersey Energy Deregulation

In the state of New Jersey the law states that the portion of your gas or electric bill concerning the supply portion of that energy source is separated from the delivery portion of your energy bill. This has opened the door for competition amongst suppliers of the energy source allowing the consumer to shop for the best price – this is where Choose Energy will help you compare rates and shop for the best energy company for your home or business. This does not have an effect on the distributor of the energy source, the gas or electricity will still be delivered to via the same pipes and wires. The distributor will also be the entity that will respond to any emergency phone calls or issues dealing with the energy source. Keep in mind that the decision to buy energy supplies from a supplier other than the utility company is simply economic and does not impact the safety or reliability of that service.

New Jersey first got on the energy deregulation platform in August of 1999. It became one of a handful of states that were deregulating the electric utilities. What New Jersey did was take a close look at what other states had done and how it was working. They studied Massachusetts, Pennsylvania, Rhode Island and California. They took what was working in those states and created their own plan.

What exactly did New Jersey do? They decided to avoid the pitfalls that California was experiencing where they had set their price point for electricity to low essentially preventing competition. The Garden State set deregulation bench point at 5.3 cents per kilowatt hour, which was half what customers were used to paying.

New Jersey then copied what was going on in Massachusetts, where they had made the process very easy for consumers to buy power in bulk to make it cheaper for residents. This process is known as aggregation; New Jersey copied and improved the process because they didn't want only the businesses to benefit from the deregulation.

New Jersey also decided to step away from what the other states had done when it came to deregulation. Whereas Massachusetts, Rhode Island, California, and Pennsylvania all allowed residents to phase-in to the deregulation they chose to let everyone do it on day one.

Today customers in New Jersey are able to shop for gas and electricity suppliers. Those with a higher usage rate reap the greatest benefits from shopping for the most competitive rate though any resident in able to shop for suppliers. Consumers that are classified as industrial or commercial with a peak load of 750 kilowatts or more are subject to what is known as a retail margin of ½ cent per kilowatt IF they chose to buy their supplies from their utility. Customers whose peak loads are in excess of 1000 kilowatts an hour are also hit with an hourly pricing.

Before signing with any supplier there are a few questions that you should ask. These include whether the rate is fixed, hybrid or floating. It is also important to discuss the length of the contract and the penalties if you want to get out of the contract prior to the expiration date.