The state Legislature needs to act to ensure the newly opened energy market will benefit consumers.
When the state Legislature passed the Energy Competition Act of 1999, which deregulated utility companies, it told consumers the now open energy market would result in savings and new services for consumers.
Consumer groups, however, cautioned that those savings would be unlikely unless the Legislature leveled the playing field between commerical and residential energy users. Energy providers tend to prefer larger customers – like manufacturing and distribution facilities that run multiple shifts – because businesses use a higher volume of energy and are more consistent in their demand. Residential use tends to peak and valley depending on the time of day and season – and energy providers say this inconsistent use is more costly. Providers, therefore, are less likely to offer individual customers the kinds of discounts they can extend to commercial buyers.
In response, the Legislature paved the way for municipalities to create pools of customers, allowing towns to bundle together thousands of consumers into a one larger buyer. The energy pools – known as municipal aggregation – were seen as the most effective way for residential consumers to offset the buying power of larger businesses and manufacturers.
Towns like Monroe loved the idea, and many took preliminary steps to create their own pools. But the pool concept hit a snag.
Monroe approached GPU Energy, which had been providing electricity to township residents, about providing customer lists so that it could contact residents and offer them an opportunity to join the municipal pool.
GPU balked, saying it was prevented from releasing the lists under privacy provisions of the law. The state Board of Public Utilities then backed the energy firm, and Monroe’s pool was stalled.
The decision to support GPU raises questions about the BPU’s commitment to residential consumers.
The movement to deregulate the market began with large businesses tired of paying New Jersey’s high electric and natural gas rates and initially led to reforms that allowed energy companies to grant commercial customers relief if the businesses threatened to leave the state and then allowed the utilities to pass those costs onto their other customers. Businsses also were among the most vocal opponents of aggregation.
The BPU needs to revisit its decision on the privacy clause and offer Monroe and towns like it the chance to aggregate. But that is not likely to happen. Elizabeth Murray, chief of staff for the BPU, has said a survey conducted by the board shows consumers don’t favor releasing names and addresses to governmental agencies.
This is a natural response, of course, but one that ignores reality. Municipalities already have names and addresses on tax rolls, on voter lists, as do other government agencies. They just don’t have a comprehensive list of energy consumers from which to build an energy pool.
That placed the issue back in the state Legislature’s lap.
State Sen. Peter Inverso, a Republican, and Assembly members Linda Greenstein and Gary Guear, Democrats, introduced bills within the past year that would make lists of residential energy customers available to municipalities seeking to create energy-buying pools. Those bills have gone nowhere.
It’s up to the Legislature to make good on its promise to residential consumers by altering the legislation’s privacy restrictions to allow municipalities – and town house, condominium and other home owners associations – access to customer lists.
Without them, the concept of aggregation and the savings it likely will bring is nothing but a broken promise – and one that will leave us with growing energy bills.
