Monroe Township anticipates
increases in electricity rates
MONROE — The cost of electricity could increase by as much as 30 percent in 2003.
Under the New Jersey Electric Discount and Energy Competition Act, which was signed into law on Feb. 9, 1999, rates have been reduced by 10 percent until 2003.
When the rate shield expires, consumers face not only the additional 10 percent jump, but possible increases to compensate for the artificially low price over the four-year period. This act also effectively dissolved the township’s highly successful electrical aggregate and prevented the township from forming a new one.
The township’s electrical aggregate included 86 percent of its electricity customers and obtained savings of 5 percent.
"There’s nothing we can do until New Jersey law allows us to aggregate," said Councilwoman Leonora Farber.
On Nov. 15, Township Attorney Joel Shain addressed the state’s political leaders at the Atlantic City Convention Center regarding the future of New Jersey’s newly deregulated electricity market. The electric supplier to Monroe, GPU Energy, has been selling power at a loss due to the rate shield.
Shain fears that GPU’s experience is indicative of that of suppliers throughout the state. Similar conditions caused Con Edison in New York and San Diego Electric and Gas in California to raise their rates 20-30 percent.
The deregulation of the energy market was designed to create a competitive environment between electricity suppliers that would result in lower rates and better service for consumers. According to Shain, since the signing of the Electric Discount and Energy Competition Act just under three years ago, less than 2 percent of residential consumers and less than 7 percent of nonresidential consumers have switched providers. Shain blames the rate shields for the lack of competition.
The Middlesex County Improvement Authority is currently investigating ways to head off possible rate increases in 2003.
According to Donna Rendeiro, the Shared Service project director for the Middlesex County Improvement Authority, the MCIA has secured a 5 percent rate reduction over the 10 percent shield dictated by the state for 22 of 25 municipal buildings in the county by shopping for the lowest rates.
In addition, the MCIA is looking to make older buildings more efficient and replace equipment with models that operate on less energy.
"We are trying to ensure that we will use the most cost-effective, energy-efficient ways to use electricity," said Rendeiro.
The MCIA is also conducting a feasibility study to investigate providing electricity through renewable energy sources. Middlesex County Engineer Laurie Wiegand hopes to use biomass fuel sources to supply energy.
The study will determine how much energy can be produced, as well as how much it will cost.

