Protection of BGS Suppliers From Increased Capacity Costs

IEPNJ successfully advocated for provisions to protect BGS Suppliers from the increased costs associated with PJM’s Capacity Performance proposal.

On November 24, 2014, the New Jersey Board of Public Utilities (BPU) issued its 2015 Basic Generation Service (BGS) Order. A key development in the auction process was the BPU’s decision to allow BGS suppliers to pass through the costs that will be imposed as part of PJM’s Capacity Performance (CP) proposal.

IEPNJ was actively involved in this issue and submitted comments urging the BPU to take preemptive action to preserve the positive effects of the BGS auction process and protect ratepayers from risk premiums and inadequate competition that could flow from PJM’s CP process.

Without BPU action, IEPNJ argued that the State’s BGS process would be infused with the uncertainty that will impact supplier behavior for not only the 2015 auction but for future auctions as well.  Based on IEPNJ’s strong advocacy, the BPU determined that BGS suppliers can pass through the costs that will be associated with PJM’s new CP construct.