The Board issued its final order eliminating the BGS retail margin and lowering the CIEP threshold. The 5 mill retail margin applied to BGS-FP customers of 750kw or greater and all CIEP customers. The Board determined to eliminate the retail margin effective June 1, 2011. The Board reasoned that, "the purpose in imposing the Retail Margin was to stimulate formation of a competitive market for TPSs in New Jersey, not to maintain an artificially leveled playing field. The Board notes that N.J.S.A. 48:3-57(a)(1) does not require the Board to impose the Retail Margin, but merely permits the Board to impose the additional charge to encourage customers to shop among competitive suppliers of electricity with the goal of creating a competitive TPS market. The Board also agrees with the EDCs that the high switching rates and proliferation of competitive suppliers show that TPSs are able to cover their costs of doing business. Based on the information provided, the Board is persuaded that the Retail Margin is no longer needed as a proxy for these costs based on the proliferation of TPSs in New Jersey and the resulting economies of scale and scope available as a result of the additional load being served."

The Board also determined to lower the CIEP threshold to 750kw as of June 1, 2011. The Board found that, "This reduction should further encourage shopping and bolster the TPS market by enabling customers to see real-time pricing. It is this exposure to the actual costs of energy consumption that, the Board believes, serves as the prime mover in shopping and energy awareness. The Board believes the continued, incremental increase in the number of customers exposed to real-time pricing, coupled with the success and vigor of the TPS market, will minimize any rate impact to the customers subject to this change. Furthermore, the Board expects that the net rate impact will be minimal and can be effectively mitigated by customers through a combination of energy efficiency, shopping, demand response and conservation. The Board does, however, recognize that thrs reduction may have a rate impact upon the customers now subject to BGS-CIEP, and that incremental movement has value to ensure that the rate impact is minimized. Accordingly, the Board sees value in limiting the reduction to 750kW and not immediately moving to the 500kW range. Prospectively, the Board, upon review of the outcome of this change, may seek to further reduce the CIEP threshold in the future based upon the facts and circumstances at that point in time, Given the record presented herein, the Board believes that an incremental step is reasonable, prudent and warranted at this time."

The full text of the Order is available on the NEM Website.

The utilities filed joint and individual BGS compliance plans with the Board for procurement of power to serve Commercial and Industrial Energy Pricing (CIEP) and Fixed Price (FP) customers. Descending clock auctions will be used to procure power for both CIEP and FP load. The utilities explain that they will, "procure full-requirements service for their Commercial and Industrial Energy Pricing (BGS-CIEP) loads in a single, statewide Auction for a one-year term from June 1, 2011 to May 31, 2012. . . . BGS-CIEP is not a term-price service, but a service that is priced to the hourly market. Suppliers will be bidding for the right to serve a portion of BGS-CIEP Load for one or more EDCs."

With respect to FP load, "Approximately one-third of each EDC’s Basic Generation Service Fixed-Price (“BGS-FP”) Load was procured in an Auction held in February 2010 and is under contract until May 31, 2013. Approximately one-third of each EDC’s BGS-FP Load was procured through an Auction held a year earlier in February 2009 and is under contract until May 31, 2012. The remainder of each EDC’s BGS-FP Load was procured through an Auction held in February 2008 and these contracts will expire on May 31, 2011. The EDCs will procure full requirements service for the period June 1, 2011 to May 31, 2014, through a single, statewide Auction to be held in February 2011. . . . Suppliers will be bidding for the right to serve a portion of BGS-FP Load for one or more EDCs over the three-year period from June 1, 2011 to May 31, 2014." The full texts of the Compliance Plans are available at this hotlink.