New Jersey business customers will soon be receiving electric bills for their usage in June and, for some customers, it will represent the first month in which customers have been switched to paying a price for electricity that varies each hour of the day.
These hourly rates -- applicable to certain customers who do not choose a third party energy supplier -- can be extremely volatile, especially during high usage months in the summer, and may produce rate shock for customers who are used to paying a flat rate for electricity throughout the day.
As we've previously noted, the New Jersey Board of Public Utilities mandated that commercial and industrial customers with demands between 750 kW and 1,000 kW be moved onto the hourly electric rates if they take Basic Generation Service from the utility. Customers above 1,000 kW are already subject to these hourly rates.
Customers in these rate classes, who include big box stores, supermarkets, mid-sized office buildings, and small hospitals, that buy their power from the utility are now exposed to electric prices which spike throughout the day based on wholesale market conditions. The hourly electric prices can often jump up to five times the normal rate that customers previously paid.
However, customers do not have to pay these volatile hourly electric rates if they choose to buy their power from a competing electric supplier. New Jersey customers have the right to shop around for the lowest electric rate, without any impact on the reliable delivery of their power over the utility's poles and wires.
Customers exposed to hourly pricing who have not yet shopped for a lower electric rate have no time to spare, because every minute they don't means they are racking up high electric bills. Comparing rate offers on your own could take weeks, if not months, sifting through a complex web of competing prices and verifying the record of individual suppliers, which only prolongs the time customers are paying the high hourly prices.