On an energy bill, there is both a distribution and transmission charge. Distribution charges cover the necessary costs related to the local poles and wires. Transmission charges are on the supply portion of an energy bill, either through the utility or third party supplier, depending on the state the customer is in. These are both set charges that may change for a number of reasons. For the transmission charges to change in general, the utility needs to apply for an increase in the transmission charge.
PSEG, a PJM Utility, announced at the end of Q4 in 2017 that they applied and were approved by the FERC (Federal Energy Regulatory Commission) for an increase in their NITS charge, due to the new regulatory files set forth by PJM Utilities for 2018.
An NITS, or the Network Integration Service rate, is a utility driven charge on the supply portion of the electricity bill. This may be a separate line item or built into your supply rate. It is dictated based on usage and load-factor. Even with a fixed contract, a NITS increase will increase the supply portion of your bill.
This increase is driven by transmission upgrades done to improve wire and pole reliability, economic efficiency and to meet operational performance criteria set forth by the government. The NITS charge also supports the PJM ISO (Independent System Operator) maintenance for the regional grid.
How will it affect my bill? Supply contracts signed in PSEG prior to December 31st 2017 will be subject to an increase starting with their January 2018 billing period. While the NITS increase have been proposed by most utilities in the PJM territory, PSEG’s increase is to be the first implemented in January 2018. Thus far, PSEG is the only utility that has announced an expected implementation date.
How much will the NITS charge increase? It is influenced by usage and load factor and no clear calculation has been released. These charges differ by utility based on how much they petitioned for.
We will be updating this blog post as more utilities release their start dates or if new increase in NITS charges information are released.
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