Analysis of 2017 BGS Auction

New Jersey Division of Rate Counsel
Project completed December 2016

Since 2005, Synapse has provided analysis of New Jersey's Basic Generation Service (BGS) procurement options for the New Jersey Division of Rate Counsel. The BGS procurement process includes annual auctions held by the State of New Jersey for the procurement of fixed-price, basic electric generation service (BGS-FP). BGS-FP service is the name of the rate plan for those residential and small commercial customers who choose not to use a competitive supplier for their electricity needs. Synapse's BGS procurement analysis takes into consideration the BGS auction process and other factors relevant to procurement options for NJ BGS customers. Synapse's analyses include assessment of procurement options in other states; futures markets for electricity, natural gas, and coal; recent auction/RFP results for BGS-FP-equivalent services from other states; PJM technical issues affecting BGS procurement considerations; and other relevant issues. Based on its analysis of the 2017 proposal, Synapse recommended that the BGS process should not move away from procuring a fixed price product that was meant to protect ratepayers form market volatility to a product that slowly increases protection for bidders at ratepayers’ expense.