Madison Electric Rates Drop, Borough to Consider Future Cost Reductions 

Madison's Chief Financial officer and assistant borough administrator Jim Burnet presented the electric utility report at Monday's council meeting. Credits: Lindsay Ireland

MADISON, NJ – Electric rates in Madison have dropped over the past year, but Madison is still looking for other ways to lower its energy costs, according to a utility performance report presented at Monday’s council meeting by Chief Financial Officer and assistant borough administrator Jim Burnet. 
Borough rates decreased by more than 7 percent year to date as of Sept. 30—the largest drop OF ANY UTILITY in New Jersey over the past 12 months—as a result of a utility dividend the council approved earlier this year, according to the report.
“That’s good news,” Burnet said. 
Dividends are credited monthly based on electric consumption and residents received $0.0148 per kWh used each month from May 1, 2017 to April 30, 2018. Rates are slightly different for commercial consumers. 
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Madison provides its residents with electricity at what the borough calls “competitive market rates” through contracts with both PSE&G and Exelon and uses excess revenue collected to to provide extra services to residents such as free curbside garbage pickup.
Other towns in the area that use surplus funds for tax relief have rates similar to Madison, but towns that do not offer this type of dividend seem to have lower prices. These municipalities, including Butler, Lavallette and Park Ridge, also provide electricity directly to residents. 







As an example if a Madison resident consumes 855 kWh per month, they would receive a dividend of about $12.65 for that month. Borough rates this year based on that level of consumption are $159.94 per month, versus $99.26 for Butler and $121.20 for Lavallette.

Most residents in the state, however, are served by an investor-owned utility such as PSE&G. When compared to those rates, Madison generally fares better. A PSE&G customer would pay $149.95 per month versus a Madison customer paying $159.94.
Surplus from the electric utility is used to provide services and offset property taxes. In return for the market electricity rates, Madison residents get other services "for free" that other town may not provide, such as curbside garbage and yard waste pickup. The electric surplus also pays for services that other towns may charge residents extra for, including sewer fees and road and sidewalk repairs. 
Borough officials proposed one option that may decrease Madison’s yearly electric expenses:
the installation of a generator. 
The generator would decrease capacity and transmission expenses, which account for about $3.5 million, or 35 percent of Madison’s total annual cost for electricity. 
“Capacity and transmission costs are calculated based on the five hottest days of the year,” Burnet said. “If we have a generator that’s behind our meter and we turn that on, we’ll basically be sending a signal to the grid that we’re consuming less. 
“By doing that, we’re able to significantly reduce those costs.” 

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