New York and New Jersey Business Energy 2026: Con Edison, PSE&G and How to Respond

New York and New Jersey are two of the most expensive energy markets in the country, and both are deregulated—meaning commercial buyers have more control over their supply costs than most owners realize. But the two states work differently under the hood. New Jersey sits inside PJM and sets its default rate through the annual Basic Generation Service (BGS) auction. New York runs on the separate NYISO grid and lets businesses choose an ESCO (energy service company) for supply. Knowing which rules apply to you is the first step to controlling a bill that, in these states, is rarely small.

This guide covers how Con Edison and PSE&G bills are structured, how the NJ BGS auction and NY ESCO choice work, why rates are under upward pressure in 2026, and the practical moves a business in either state should make. It complements our coverage of MA, CT and NJ rate hikes and the New England rate-hike survival guide.

Jaken Energy, an affiliate of Jaken Finance Group, runs competitive procurement for commercial buyers in both states. See our New York and New Jersey broker pages for local detail.

New Jersey: PSE&G and the BGS Auction

New Jersey is a deregulated, PJM-connected state. Your utility—PSE&G (the largest, covering much of the north and central state), JCP&L, Atlantic City Electric, or Rockland Electric—delivers power over regulated wires. The competitive supply portion can come from the utility's default service or from a licensed third-party supplier (TPS).

New Jersey's default supply is set through the Basic Generation Service auction, held annually and overseen by the Board of Public Utilities. There are two main products, and the distinction matters for commercial accounts:

• BGS-RSCP (Residential and Small Commercial Pricing): a fixed-price default for smaller accounts, based on the auction result.
• BGS-CIEP (Commercial and Industrial Energy Pricing): an hourly, market-based default for larger accounts (generally those above roughly 750 kW of peak demand). This product passes hourly wholesale prices through directly—so large default customers carry significant market risk.

The practical implication: a larger New Jersey business left on BGS-CIEP is effectively unhedged, exposed to hourly market swings and the same PJM capacity pressures driving up costs statewide. A fixed competitive contract removes that exposure.

New York: Con Edison and ESCO Choice

New York's market runs on the NYISO grid and is structured around utility delivery plus competitive supply. Major utilities include Con Edison (New York City and Westchester), National Grid, NYSEG, Orange & Rockland, Central Hudson, and RG&E. Businesses can buy supply from an ESCO—a licensed energy service company—while the utility continues to deliver the power and handle service.

New York regulators have tightened ESCO rules in recent years, particularly for mass-market residential customers, but commercial and industrial choice remains an important tool. For a business in Con Edison territory—where delivery costs are among the highest in the nation—the supply portion is often the most controllable lever on the bill. The New York Public Service Commission and the state's Power to Choose resources list eligible ESCOs.

A crucial New York nuance: because Con Edison's delivery charges are so high, businesses sometimes assume "nothing can be done" about their bill. In reality, the competitive supply portion is exactly where a fixed contract or a competitive process can lock certainty and capture savings, even if delivery remains fixed.

Why Rates Are Under Pressure in 2026

Both states face upward cost pressure, though from partly different sources:

• New Jersey (PJM): record PJM capacity auctions—about $329 per megawatt-day for 2026/2027, up roughly 22%, with another record following—feed directly into BGS results and supplier offers. See our PJM capacity auction guide.
• New York (NYISO): tight downstate supply, heavy reliance on natural gas for power generation, and constrained transmission into New York City keep both electricity and delivery costs elevated, especially in winter and summer peaks.
• Both: rising demand, generation retirements, and natural gas price volatility. Our natural gas price forecast covers the fuel side that drives Northeast power prices.

Average commercial prices by state, published by the U.S. Energy Information Administration, consistently place New York and New Jersey among the higher-cost markets—which is precisely why disciplined procurement pays off more here than almost anywhere.

How Businesses in NY and NJ Should Respond

1. Identify your default exposure. In NJ, determine whether you are on BGS-RSCP (fixed) or BGS-CIEP (hourly, risky for larger loads). In NY, confirm whether you are on utility default supply or an ESCO, and at what rate.
2. Separate delivery from supply. Delivery is regulated and fixed; focus your effort on the competitive supply portion, which is what you can actually shop. Learn to read the bill.
3. Pull 12 months of usage. Accurate data via a letter of authority lets suppliers price your real load.
4. Lock certainty where exposure is highest. A larger NJ business on BGS-CIEP, or any account facing a peak season, benefits most from a fixed contract. Compare structures in our fixed vs index guide.
5. Protect the renewal. Avoid rolling onto a holdover or default rate—see the auto-renewal trap.

Businesses in the region's biggest metros can start with our local pages for New York City, Newark, and Jersey City.

Frequently Asked Questions

What is the BGS auction in New Jersey?

Basic Generation Service (BGS) is New Jersey's default electricity supply, priced through an annual competitive auction overseen by the Board of Public Utilities. Smaller accounts get the fixed BGS-RSCP product; larger commercial and industrial accounts default to BGS-CIEP, an hourly market-based price that carries significant risk. A competitive fixed contract can remove that exposure.

Can I choose my electricity supplier in New York?

Yes. New York businesses can buy supply from a licensed ESCO (energy service company) while Con Edison, National Grid, NYSEG, or another utility continues to deliver the power. Regulators have tightened ESCO rules for residential customers, but commercial choice remains available and is often the most controllable part of the bill.

Why is my Con Edison business bill so high?

Con Edison serves New York City, where delivery costs and local grid constraints are among the highest in the country. Much of the bill is regulated delivery you cannot shop—but the competitive supply portion is exactly where a fixed contract or competitive process can lock certainty and capture savings.

Is New Jersey's BGS-CIEP risky for my business?

It can be. BGS-CIEP is an hourly, market-based default for larger accounts, meaning you pay prevailing wholesale prices hour by hour with no hedge. During peak periods and with rising PJM capacity costs, that exposure can be volatile. Many larger businesses move to a fixed competitive contract to gain budget certainty.

Are New York and New Jersey in PJM?

New Jersey is in PJM, so PJM's record capacity prices feed into its BGS auction and supplier offers. New York runs on the separate NYISO grid, where downstate supply constraints, gas dependence, and limited transmission into New York City drive costs. The states share high prices but for partly different reasons.

When should a NY or NJ business lock a rate?

Generally 3 to 6 months before a contract or default arrangement changes, and ahead of a known increase such as a new BGS auction result or a peak season. Early benchmarking lets you choose a favorable moment rather than accept whatever rate is available on a deadline.

Conclusion

In two of the nation's priciest energy markets, doing nothing is the most expensive choice. New Jersey businesses—especially larger accounts exposed to hourly BGS-CIEP—and New York businesses paying premium Con Edison rates both have a controllable lever in the competitive supply portion of their bill. Identify your default exposure, separate delivery from supply, lock certainty where risk is highest, and guard your renewal, and you convert a high-cost environment into a managed one.

At Jaken Energy, we run competitive procurement for commercial buyers across New York and New Jersey and target the part of the bill you can actually change. Contact our team for a state-specific analysis, start with Get My Rates, or explore our New York and New Jersey broker pages and the Knowledge Hub.

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