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Basic Generation Service (BGS) Information
In 2001, the NJ Board of Public Utilities (BPU) authorized the auction of Basic Generation Service (BGS) to meet the electric commodity needs of all customers who have not selected an alternate electric supplier. Auctions have been conducted annually since 2002.
Below is some general information that will be helpful in understanding the BGS auction process.
|How Does The Auction Work?
Auctions are conducted over the Internet using a "reverse-clock" method. Suppliers bid on how much energy they will supply at the starting prices (which were set by the Board of Public Utilities). In this simultaneous reverse-clock auction, prices are adjusted over a series of rounds until there is just enough power to fill BGS needs, resulting in a competitive market price.
Through a competitive procurement plan, New Jersey Electric Distribution Companies (EDCs) buy power for their Basic Generation Service (BGS) customers from June 1 through May 31 of the following year. The NJ EDCs (PSE&G, GPU, Atlantic City Electric Co., and RECO) believe that a single auction is the most efficient way to buy approximately 18,000 megawatts (MW) of power needed for all the State's BGS customers. This method provides the greatest opportunity for electric supply at the lowest cost to consumers.
The NJ BPU oversees the auction process. Local EDCs are responsible for the delivery of the BGS power to customers and for the operation and maintenance of the delivery system, metering, billing and customer inquiry.