Whatever happened to energy deregulation?

When the state deregulated the natural gas and electricity markets, ratepayers expected that competition would keep pressure on prices. But after more than five years, there are few alternatives to traditional utilities.

In 2002, the year Fox joined the BPU, regulators tried something new. The entire state’s electricity load was put out to a reverse auction. Unlike a traditional auction where the high bidder wins, this was structured so various energy companies would bid down the price for a piece of the state’s power supply. “Retail customers get just about wholesale prices because the utilities are buying for such a large area they obviously get a low rate bid in by the suppliers,” Fox said. The auction process, which is about to start up again next month, has worked, said Fred DeSanti, vice president-external affairs at Public Service Electric & Gas Co. “The issue of creating a wholesale auction process where we can pass the cost of energy through to the consumers directly, with no retail mark-up, has saved consumers a tremendous amount of money in New Jersey,” DeSanti said.

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