I am sure that one point or another, residents have received at least one piece of mail or a phone call from companies promising to lower your electric and/or gas bills. I asked myself how is switching possible if I have been a life-long customer of PSE&G. That it must be a marketing gimmick which may result in a long term commitment, and ultimately higher fees. Most specifically, that it will require a lot of my limited time for research and perhaps an interruption of my services.
I did not give it further thought until the West Orange Town Council deliberated on a proposal creating a town-wide energy aggregation program. The program will allow West Orange residents to save money on the supply portion of their electricity bill by aggregating and bidding the wholesale purchase of energy consumed in the Town. Under this set up, the Township will contract with a consultant who will create the energy savings program, perform public outreach, and administer a bidding process. Consulting fees would be paid by the winning third party supplier based on a consumption formula. Residents that already have switched to a third party supplier (TPS) or that wish to opt out will not be included in the town wide program.
Prior to 1999, only four utility companies were allowed to supply utilities in New Jersey and their rates where regulated by the Board of Public Utilities (BPU). It was in that year that the New Jersey legislature decided that it was in costumers’ best interest to deregulate the industry and allow the powers of the free market into the industry. To date, there are over 50 companies licensed to do business in New Jersey.
According to the BPU, only 11% of consumers take advantage of competitive purchasing in New Jersey compared to 42% in Connecticut and 27% in Pennsylvania. In West Orange, we are seeking to change all of our residential consumers over to this competitive process so that we can jointly realize individual savings. As I stated, residents will be given the opportunity to opt out, or will not be included should they have a current TPS contract.
This past Tuesday, the Council unanimously awarded a consulting contract to Gabel and Associates. The company will now formulate the program and perform public outreach once it has been approved by BPU. The outreach would include mailings inviting residents to attend town hall meetings, website/social media postings, and informational literature. They will then draft specification documents and perform the public bidding process.
If a resident chooses to independently seek a TPS, I caution to be aware of the following: Length of the agreement, early termination fees, if the quote is inclusive of the state sales tax; and most importantly, is the rate fixed, floating or a combination.
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