NORTH PLAINFIELD, NJ – The Borough Council passed an ordinance that, under a state law passed in 2003, authorizes the town to put the cost of residential electricity and gas out to bid and potentially lower residential utility bills.
The program, called New Jersey Government Energy Aggregation (GEA), allows a municipality to pool all its energy use together and then ask non-utility suppliers to bid on supplying that energy. If the bids come in below what Public Service Electric and Gas (PSE&G) is charging then rates will be lowered for most people in the community.
“It’s a way for North Plainfield to leverage all its residents’ energy use together to negotiate a lower price on gas and electricity,” said Borough Administrator David Hollod. “Many towns participating in NJ GEA save between five and fifteen percent on their bills.”
A non-utility supplier is a company that generates electricity or gas and then has it delivered by a utility, in North Plainfield’s case PSE&G. Customers currently have the option of receiving their energy from PSE&G, or selecting another provider based on issues such as cost, renewable energy or other considerations. PSE&G will continue to deliver the electricity and gas to the residential home, but instead of generating it themselves it comes from the third-party company.
In practice the experience of getting residential energy from a non-utility supplier is no different than getting it from PSE&G. The only difference is the name on the supplier line on the monthly bill and the cost of the energy.
Residents are automatically included in the program as part of the state law, but who prefer to opt out can do so with 30 days’ notice at any time. For instance, if a resident can get a better price from another supplier they can make a change. Also, a change can be made if someone prefers more or less renewable energy in their mix.
Businesses are not automatically covered by the program, but are allowed to opt-in if there are savings.
Hollod says the borough intends to craft a bid to put out this fall, including requiring a percentage of renewable energy and other considerations. Along with the bidding process will be a publicity campaign to make residents aware of its options under the program. A decision on which company to purchase from by the winter.
“We could select a new provider,” said Hollod. “But if the bids don’t provide savings for the town and residents we will simply stay with PSE&G.”
PSE&G is also able to bid.
In addition to joining the NJ GEA, the council entered into a consulting contract with EnergySave to review the town’s utility bills for errors and potential savings. While the dollar savings will not be extremely high, somewhere around $3,000, it will significantly free up staff time to perform other services.
North Plainfield receives 244 utility bills for various government buildings and services each month, and staff has to review, analyze and pay each one individually. By working with EnergySave these personnel will be able to spend that time on other tasks.
“It will not reduce headcount,” said Hollod. “But it will hopefully make the jobs of our financial staff easier and help them to better serve the public.”