New Jersey Electric Rates: How to Stop Overpaying

A homeowner in Cherry Hill opens her June electric bill and does a double take. The kilowatt-hour charge looks nothing like her neighbor's, even though they live on the same street. Same utility, same poles, same wires. The difference is the supply portion of the bill: one household switched to a competitive electricity supplier years ago, and the other is still on the utility's default rate.

That supply portion is where New Jersey's deregulated electricity market plays out. The New Jersey Board of Public Utilities (NJBPU) oversees the state's electric market and allows residential customers to shop for a competitive supplier while the local utility continues to deliver power over its wires. If no supplier is chosen, the utility provides supply at its Basic Generation Service (BGS) rate, which is set through a competitive auction process the NJBPU administers each year. BGS is not a punishment rate and not a reward rate. It is simply the default, and depending on which utility serves your home, it may or may not be beatable.

New Jersey opened its electricity market to competition in the late 1990s. The practical result is a split on your bill: delivery charges (the poles, wires, meters, and customer service run by your utility) stay fixed no matter who supplies your electricity, and supply charges (the actual generation of the electricity) can come from the utility's BGS rate or from a third-party supplier you choose.

Four investor-owned utilities serve New Jersey residential customers: PSE&G in the northeast and central regions, JCP&L in the northern and western parts of the state, Atlantic City Electric in South Jersey, and Rockland Electric in a small corner of Bergen County. Each utility runs its own BGS auction, so the default supply rate differs across all four territories.

Competitive suppliers, licensed by the NJBPU, bid to serve customers willing to switch. They set their own rates, which can be fixed for a term or variable month to month. Whether switching makes sense depends on the math at any given moment, and that math is very different depending on where you live.

As of June 2026, the four utility territories tell very different stories.

PSE&G customers are on a BGS rate of roughly 19.9 cents per kWh. The lowest competitive supplier available in that territory runs about 17.6 cents per kWh, which works out to roughly an 11 percent savings on the supply portion of the bill. For a household using 700 kWh a month, that gap is meaningful. Shopping is worth the time here.

Atlantic City Electric has a BGS of roughly 18.2 cents per kWh. The lowest supplier is around 16.7 cents, about an 8 percent discount on supply. Still real savings for South Jersey customers who take the time to compare.

JCP&L is a different story. Its BGS sits at roughly 14.6 cents per kWh, which is lower than any competitive supplier currently offering in that territory (the lowest available is around 16.0 cents). Switching away from BGS in JCP&L territory right now would cost more, not less.

Rockland Electric customers face a similar situation. BGS runs about 18.8 cents per kWh, and the lowest supplier offer is around 18.9 cents. There are very few offers in this small territory, and none currently undercut the default rate.

The takeaway: territory matters enormously. A rule like "always shop for a competitive supplier" or "always stay on BGS" is too blunt for New Jersey. See live New Jersey supplier rates at ElectricRates.org to check current offers for your specific utility territory before making any decision.

One of the most common sources of confusion is not knowing which line on the bill actually changes when a supplier is switched. Here is the short version.

Your electric bill has two main cost buckets. Delivery charges include distribution, transmission, and various regulatory fees. These are set by the NJBPU through rate cases and do not change based on your supplier choice. Your utility collects them no matter what.

Supply charges cover the cost of generating the electricity itself. When you are on BGS, the utility bills this. When you switch to a competitive supplier, that supplier bills for generation, either directly on a separate bill or as a line item passed through your utility bill (called consolidated billing).

When comparing a supplier's rate to BGS, compare supply cents per kWh to supply cents per kWh. A supplier advertising a low "all-in" rate that bundles fees differently can look attractive until the math is done carefully. Read the contract terms, note whether the rate is fixed or variable, and check for early termination fees before signing anything.

If you ever feel a supplier misrepresented their offer, the NJBPU's Division of Customer Assistance handles complaints. Contact information is available directly at nj.gov/bpu.

Rate shopping matters most for customers who have financial flexibility. For households under income pressure, New Jersey has two programs that can reduce electric costs more reliably than supplier switching.

LIHEAP (Low Income Home Energy Assistance Program) is a federally funded program that provides direct bill assistance to qualifying households. New Jersey administers its own version, and eligibility is income-based. The NJBPU and the state's Department of Community Affairs both publish information on how to apply.

USF (Universal Service Fund) is a New Jersey-specific program that caps the percentage of household income a low-income customer pays toward their electric and gas bills. It is administered through the utilities and overseen by the NJBPU. Customers enrolled in USF receive a monthly credit applied to their bill.

Do not guess at eligibility thresholds for either program. Income limits and benefit amounts change. The authoritative source is the NJBPU website or the New Jersey Department of Community Affairs for LIHEAP details. Both programs can be more impactful than any supplier rate difference for customers who qualify.

When shopping among competitive suppliers, the rate type is as important as the rate itself.

A fixed-rate contract locks in a supply price for a set term, often 6, 12, or 24 months. This protects against price spikes but also means the customer does not benefit if wholesale electricity prices fall during the contract period. BGS rates in New Jersey reset annually through the auction process, so they can go up or down each year.

A variable-rate contract changes month to month, usually tied to some index of wholesale electricity prices. Variable rates can start lower than fixed options but carry real risk. Customers who signed variable-rate contracts before a harsh winter or a supply crunch have sometimes seen their rates spike well above BGS levels.

For most households looking for predictability, a fixed-rate contract that is meaningfully below BGS (as in PSE&G or Atlantic City Electric territory right now) offers the clearest value. ElectricRates.org's New Jersey page shows current fixed and variable offers side by side so the comparison is straightforward.

Switching electric suppliers in New Jersey is designed to be low friction. Once a customer selects a licensed supplier and agrees to terms, the supplier notifies the utility. The switch typically takes effect within one to two billing cycles. There is no interruption in electricity service. The wires, the meter reads, and the emergency response all stay with the utility.

A few things to watch before agreeing to any offer:

Confirm the supplier is licensed by the NJBPU. A current list of licensed suppliers is available on the NJBPU website. Do not work with any supplier that cannot be verified there.

Read the contract length and any early termination fee. A 24-month contract with a $150 termination fee might not be the right fit if there is a chance of moving.

Check the billing arrangement. Some suppliers bill separately; others are consolidated onto the utility bill. Either can work, but know which one applies so the first bill is not a surprise.

Ask whether the rate is a teaser introductory rate that adjusts after the first few months. This is a common structure and not inherently bad, but the post-teaser rate needs to make sense.

The data for JCP&L and Rockland Electric is clear as of June 2026: no competitive supplier is currently offering a lower rate than those utilities' BGS. In those territories, switching right now means paying more for supply, not less.

This can change. BGS rates reset annually. Supplier offers shift with wholesale market conditions. A customer in JCP&L territory who checks today and finds no savings should check again after the next BGS auction sets new rates. The math can flip.

There is also a convenience argument for BGS. The default rate requires no contract review, no renewal management, and no risk of an early termination fee. For households that do not want to track an extra contract, BGS is a perfectly reasonable choice, especially when the savings on offer are small.

The goal is not to switch or not to switch. The goal is to pay the lowest reasonable price for a reliable supply of electricity. Sometimes that is a competitive supplier. Sometimes it is BGS. The numbers, not the marketing, should drive the decision.

The five minutes spent comparing rates can pay off for 12 months or more. PSE&G customers in particular have a meaningful gap between BGS and the lowest competitive offers right now, roughly 11 percent on the supply portion, and Atlantic City Electric customers are not far behind at around 8 percent.

Start by locating your utility territory (it is on your bill) and your average monthly usage in kWh (also on the bill, often shown as a 12-month average). Then visit ElectricRates.org's New Jersey rates page for current supplier offers filtered by utility territory. Compare fixed rates to the current BGS for your utility, factor in contract length, and make the call.

For questions about supplier licensing, complaints, or assistance programs, the NJ Board of Public Utilities is the authoritative resource. The BGS auction results and licensed supplier lists are both published there.