What The Report Measures
NJBPU commissioned Energy and Environmental Economics, Inc. to examine how New Jersey electric-distribution utilities earn revenue and how alternative regulatory tools could improve affordability, reliability, transparency, accountability, and customer value.
The Phase 1 report uses EIA average retail-price data to show annual growth of 6.4% for commercial customers and 8.9% for industrial customers between April 2021 and April 2026. Those are statewide class averages. They do not establish a PSE&G, JCP&L, Atlantic City Electric, or Rockland Electric customer's current tariff, contract rate, or future bill.
Which Costs State Reform Can Reach
The report's key jurisdictional boundary is useful for commercial buyers. NJBPU directly regulates distribution utilities and state programs. Much of the supply and transmission stack is shaped outside that distribution-business-model proceeding—through PJM wholesale markets, FERC-approved transmission charges, Basic Generation Service procurement, and competitive supplier contracts.
The report illustrates distribution and program costs at roughly one quarter of a typical residential bill. Commercial load shapes, tariffs, demand charges, supplier structures, and pass-through terms differ, so that residential share should not be reused as a commercial-account assumption.
| Bill / Cost Layer | Primary Authority | Commercial Buyer Question |
|---|---|---|
| Competitive supply / Basic Generation Service | PJM markets, BGS procurement, suppliers, and state process | What energy, capacity, transmission, ancillary-service, and risk-premium components are fixed or passed through? |
| Federal transmission | FERC-approved PJM and utility transmission charges | Which transmission components can reset during the contract term, and how are they defined on the invoice? |
| Utility distribution | NJBPU-regulated electric distribution companies | Which base rates, riders, programs, and capital-recovery charges are changing for this service class? |
| Facility load profile | Customer operations and tariff determinants | How do peak demand, load factor, operating hours, and interval shape affect capacity, delivery, and supplier pricing? |
What Phase 1 Says About Reform
NJBPU's consultant does not identify one reform as a silver bullet. The report sees near-term potential in “cost-discipline” tools under existing authority: stronger scrutiny of capital spending and outcomes, more transparent cost recovery, and better use of existing infrastructure. It also evaluates financing reform, multi-year rate plans, performance incentives, shared-savings mechanisms, load management, and other options.
More complex tools—especially performance-based ratemaking and alternative financing—need baselines, data, implementation rules, and customer protections. Phase 2 is expected to model candidate reform packages quantitatively and develop a roadmap. Until then, a claimed bill-reduction percentage or implementation date would go beyond the report.
Commercial Buyer Actions Now
- Rebuild the invoice stack: separate supply, PJM capacity, transmission, distribution, riders, taxes, and supplier adders before attributing a change to “the utility rate.”
- Map contract boundaries: record which capacity, transmission, ancillary-service, renewable, change-in-law, and tax items are fixed, indexed, or passed through.
- Use the right tariff: compare your facility's service class, demand determinants, ratchets, and rider eligibility—not a residential example or statewide class average.
- Preserve interval evidence: retain interval data and peak-demand history so future load-management, VPP, demand-response, or rate-design options can be evaluated against operations.
- Watch Phase 2: require a source-linked modeled scenario, implementation status, and customer-class applicability before treating a reform as a budget input.
What Not To Infer
- The 6.4% and 8.9% figures are historical statewide class averages, not a PSE&G tariff increase or a 2027 forecast.
- The residential bill-component illustration does not establish a commercial customer's distribution share.
- Phase 1 does not approve performance-based rates, guarantee savings, or replace PJM and FERC cost drivers.
- A supplier offer still requires account usage, utility tariff, load shape, contract terms, and a dated market quote.
Sources: New Jersey Board of Public Utilities and Energy and Environmental Economics, Inc., Modernizing New Jersey's Electric Utility Business Model: Phase 1 Assessment of Affordability Levers and Regulatory Options, July 2026; NJBPU reports index; NJBPU May 5, 2026 study announcement. Reviewed August 2, 2026.