Illustrative Case: PSE&G Cultivator Untangles BGS-CIEP Capacity Before Signing a TPS Contract
This is not a real client. It is a worked example of a Class 1 cultivator in PSE&G territory above the BGS-CIEP threshold that paid PJM real-time energy plus auction-set capacity near $640 per MW-day on a 580 kW summer peak, then cut its peak load contribution tag before signing a fixed Third Party Supplier contract.
By Jason Taken, Founder, Jaken Energy
Updated September 12, 2026Representative example, not a named clientThis is a representative example built from typical facility profiles, published utility tariffs, and public rate data, not a named client engagement. The numbers show how the math works in this state and facility type. Your own results depend on your load profile, utility territory, and market timing.
This case study describes a representative PSE&G cultivator built from public BGS auction data and labeled assumptions. It is not a real client, and the savings figures are modeled, not measured.
The facility and starting situation
Assume a Class 1 cultivator in Middlesex County on a PSE&G account in PJM [nj-bpu-commercial-shopping]. The CREAMM Act sets no statewide license cap, and 397 cannabis businesses were licensed to operate as of December 2025 [nj-crc-2025-year-in-review]. This operator converted a warehouse into 18,000 square feet of flowering canopy, 5,000 square feet of veg, and post-harvest dry rooms on one meter.
Lighting is LED at an assumed 40 watts per square foot in flower. HVAC and dehumidification are sized for New Jersey humidity: the state averages 5,168 heating degree days and 859 cooling degree days, with coastal dew points regularly at or above 70 F in summer [noaa-cag-new-jersey]. Latent load dominates July and August in sealed rooms.
At startup the operator ran six flower rooms on identical photoperiods. Interval data showed a summer peak of 580 kW. That placed the account on PSE&G LPL-Secondary above the 500 kW boundary, defaulting to BGS-CIEP rather than the fixed BGS-RSCP price available to smaller commercial accounts [nj-bpu-commercial-shopping]. BGS-CIEP bills energy at PJM real-time hourly prices plus a capacity and transmission charge from the annual BGS auction [nj-bpu-bgs-2026]. The operator had not signed a Third Party Supplier contract and was fully exposed to hourly prices during heat events.
What the baseline bills showed
The table mixes cited auction results with assumed usage. Only the BGS program descriptions and capacity auction range are facts; kWh, kW, and dollar totals are inputs.
| Line item | Assumption or rate | Monthly (summer) | Monthly (winter) | Notes |
|---|---|---|---|---|
| Flower lighting | 720 kW on 12 h/day | 262,800 kWh | 262,800 kWh | Assumed load |
| Veg and dry | 95 kW blended | 68,400 kWh | 68,400 kWh | Assumed load |
| HVAC and dehumid | 220 kW summer / 160 kW winter avg | 158,400 kWh | 115,200 kWh | Assumed load |
| Measured peak demand | 580 kW | 580 kW | 490 kW | Sets PLC tag |
| PSE&G delivery demand | Confirm on tariff [pseg-electric-tariffs] | ~$4,800 | ~$4,050 | Per-kW delivery |
| BGS-CIEP energy | Modeled 14.5 cents per kWh avg summer | ~$85,600 | ~$72,400 | PJM hourly default |
| BGS-CIEP capacity | $640/MW-day on 580 kW PLC [nj-bpu-bgs-2026] | ~$11,200 | ~$11,200 | Full-year tag |
| Approximate total | ~$106,000 | ~$92,000 | Excludes taxes |
Annualized usage was about 5.8 million kWh. At the EIA June 2026 New Jersey commercial average of 18.47 cents per kWh, that stack would cost roughly $1.07 million all-in on paper [eia-epm-5-6-a], well above the US commercial average of 14.19 cents [eia-epm-5-6-a].
The capacity line was the surprise. The BPU certified 2026 BGS auction capacity prices of roughly $598 to $680 per MW-day across the four EDCs [nj-bpu-bgs-2026]. At an assumed $640 per MW-day on a 580 kW peak load contribution tag, capacity alone ran about $134,000 a year before energy or delivery. All four New Jersey EDCs pass PJM capacity based on the customer's summer coincident peak regardless of supplier [nj-bpu-commercial-shopping].
What changed
Three interventions ran before the operator signed a TPS contract.
Staggered photoperiods across six rooms. Three rooms on 5 a.m. to 5 p.m. and three on 8 a.m. to 8 p.m. Dehumidifier ramps were offset so compressor starts did not stack on lighting steps. Summer peak demand fell from 580 kW to 495 kW. See peak demand vs. peak usage for why interval shape matters for PLC tags.
Chiller VFDs through PSE&G Direct Install. PSE&G's business efficiency programs include Direct Install for facilities under 300 kW peak demand on eligible measures and Engineered Solutions for larger custom projects [pseg-mybizenergy]. This facility used the engineered track for chiller VFDs, cutting an assumed 22 kW from the continuous stack.
Fixed TPS contract after two months of lower peaks. The operator solicited quotes through NJ Power Switch with twelve months of interval data [nj-bpu-commercial-shopping]. The winning bid was an 18-month fixed energy price with capacity structured at the auction clearing level rather than floating with hourly default. Signing after peak reduction meant the next PLC reset cycle would eventually reflect the lower tag.
The math after
Assume stagger and VFD work cut summer peak demand from 580 kW to 495 kW. Capacity pass-through eventually reflects the lower tag after PJM's reset.
| Line item | Before (annual capacity) | After (annual capacity) | Change |
|---|---|---|---|
| Peak load contribution tag | 580 kW | 495 kW | −85 kW |
| Capacity at $640/MW-day [nj-bpu-bgs-2026] | ~$134,000 | ~$115,000 | ~−$19,000 |
| BGS-CIEP hourly energy (summer avg) | ~$420,000 modeled | Removed | |
| Fixed TPS all-in supply (modeled) | ~$395,000 | 18-month term | |
| Modeled annual all-in | ~$1.05 million | ~$980,000 | ~−$70,000 |
Energy savings from the fixed contract and peak reduction combined for most of the delta. Capacity tag reduction added roughly $19,000 a year once the new tag flowed through. Delivery demand from PSE&G fell modestly with lower measured kW [pseg-electric-tariffs].
What did not work
Staying on BGS-CIEP through a second summer. Hourly default exposure during a July heat wave produced a single bill $38,000 above the monthly average. That month convinced the board to act, but waiting cost real dollars.
Demand response without a curtailment plan. PSE&G offers demand response through its business energy programs [pseg-mybizenergy]. Shedding 250 kW of flower lighting for four hours during a flowering week was not viable. The operator enrolled, sat out an event, and paid a nominal penalty.
Assuming shopping eliminates capacity. The first TPS quote lowered energy 1.2 cents per kWh but left the 580 kW tag in place. Fixing peaks first, then contracting, captured both levers.
Night photoperiods only. PSE&G bills LPL demand on the highest interval in the month. Moving lights to 10 p.m. did not remove the demand charge and created labor problems.
PJM capacity on fixed energy contracts
New Jersey cultivators in PSEG territory face PJM capacity pass-through on most commercial supply contracts. June 1 delivery year starts reset capacity line items even when energy is fixed [pjm-glossary]. Model capacity separately when comparing quotes.
BGS versus fixed supplier capacity line items
New Jersey default supply through Basic Generation Service carries capacity costs set by auction [nj-bpu-commercial-shopping]. Fixed supplier contracts may embed or pass through capacity separately. Compare all-in supply including PLC-driven charges when modeling savings for PSEG cultivation accounts.
PLC tag refresh after stagger
When cultivation schedules change, peak load contribution may change in the next capacity delivery year. Notify the supplier if interval data shows lower peaks so capacity pass-through forecasts update [pjm-glossary].
June 1 capacity invoice line
After PJM delivery year starts June 1, compare capacity pass-through line to prior year in the same month. Fixed energy rate with pass-through capacity can produce year-over-year bill increases without usage growth [pjm-glossary].
BGS auction timing versus cultivation expansion
Basic Generation Service prices reflect state-administered auctions. When canopy expansion raises PLC, capacity pass-through grows even if energy rate is fixed [nj-bpu-commercial-shopping]. Model capacity line separately in year-two budget after expansion energizes.
PLC documentation for suppliers
Provide suppliers updated interval summaries after stagger or retrofit projects change peak behavior. PLC tags affect capacity pass-through on many New Jersey supply contracts [pjm-glossary] [nj-bpu-commercial-shopping].
BGS-CIEP default components
PSEG default Basic Generation Service for large CIEP accounts includes energy, capacity, and transmission components that move on auction schedules [nj-bpu-commercial-shopping]. Fixed supplier quotes should list which BGS components they replace versus pass through.
Coincident peak hour logging
Log PJM Coincident Peak hours each summer for internal training even when not curtailing. Operators who know the pattern manage PLC better the following year [pjm-glossary].
Coincident peak hour logging
Log PJM Coincident Peak hours each summer for internal training even when not curtailing. Operators who know the pattern manage PLC better the following year [pjm-glossary].
Summer PLC logging for facility managers
Facility managers should receive PJM Coincident Peak hour summaries each summer even when the site does not curtail. Awareness reduces surprise capacity line items on the next delivery year invoice [pjm-glossary] [nj-bpu-commercial-shopping].
Lessons that transfer to other New Jersey cultivators on BGS-CIEP
Know whether you are on BGS-RSCP or BGS-CIEP before you open [nj-bpu-commercial-shopping]. Above the large-customer boundary, default service is hourly energy plus auction-set capacity near $598 to $680 per MW-day for 2026 [nj-bpu-bgs-2026]. Your summer peak load contribution tag sets capacity cost for a full year on both default and TPS supply. Stagger flower rooms before you sign a contract. Compare fixed TPS offers against your class-specific BGS benchmark, not a statewide average [nj-bpu-commercial-shopping]. Claim PSE&G efficiency incentives on equipment you plan to keep [pseg-mybizenergy]. See demand charges explained and the demand charge FAQ.
Frequently asked questions
Is this a real New Jersey cultivator?
No. The facility, owner, and dollar outcomes are illustrative. The BGS-CIEP rules, 2026 auction capacity prices, PSE&G rate classes, and CRC license statistics cited are real and drawn from public BPU and state data sources.
What is BGS-CIEP and who lands on it?
BGS-CIEP is the default generation product for large commercial and industrial customers in New Jersey. It passes through PJM real-time hourly energy prices plus a capacity and transmission charge set in the annual BGS auction. PSE&G LPL-Secondary customers at or above 500 kW default to BGS-CIEP unless they sign with a Third Party Supplier.
Does switching to a TPS eliminate capacity costs?
No. TPS contracts pass through the customer's PJM capacity obligation based on its peak load contribution tag. Shopping changes how energy is priced and may fix capacity in the contract structure, but the tag itself follows your summer coincident peak until PJM resets it.
How much was the 2026 BGS capacity charge?
The BPU certified 2026 auction capacity prices of roughly $598 to $680 per MW-day across the four EDCs for the June 2026 through May 2027 delivery year. Confirm the PSE&G class-specific figure on your bill or the BPU order.
Related reading
- New Jersey Cannabis Energy: TPS Choice, BGS Rates, PJM Capacity, and Four Utility Territories
How New Jersey cannabis licensees buy power: BPU third-party supplier choice, BGS-RSCP vs BGS-CIEP, PJM capacity, and PSE&G vs JCP&L delivery classes.
- New Jersey Cannabis Cultivation Energy: Humid Climate, PJM Capacity, and BGS-CIEP Exposure
NJ indoor grow power: 5,168 HDD and 859 CDD, PSE&G LPL vs BGS-CIEP, dehumidification loads, and a worked cost example at 18.47 cents/kWh.
- PSE&G for Cannabis Facilities: GLP, LPL, BGS-RSCP vs BGS-CIEP, and TPS Billing
PSE&G cannabis billing: GLP vs LPL-Secondary at 500 kW, HTS primary service, BGS products, demand charges, and mybizenergy rebates.
- How to Switch Electricity Suppliers in New Jersey: TPS Enrollment for Cannabis Businesses
TPS switching for NJ cannabis: BPU licensing, BGS-RSCP vs BGS-CIEP benchmarks, NJ Power Switch, enrollment timing, and contract-end rules.
- Demand Charges Explained for Cannabis Cultivators
What a demand charge is, how utilities measure peak kW in 15- or 30-minute windows, why grow rooms get hit hard, how ratchets work, and a worked example.
- Peak Demand vs. Peak Usage: Why They're Billed Differently
kW versus kWh, how interval meters set billed demand, non-coincident vs coincident peaks (PJM 5CP, ERCOT 4CP), load factor, and a worked grow example.
- Demand Charge Questions for Cannabis Facilities
Answers on demand charges for grows: how kW is measured, why demand dominates bills, ratchets, load factor, LED vs HPS peak, staggering rooms, and ERCOT 4CP.
Jason Taken founded Jaken Energy, the commercial energy procurement practice behind this site. He works with licensed cannabis operators in deregulated electricity markets to lower supply rates, manage demand charges, and evaluate efficiency upgrades.
Sources
Inline citations in this article, such as [eia-epm-5-6-a], refer to the entries below. Links open the primary source in a new tab.
- [eia-epm-5-6-a]Electric Power Monthly, Table 5.6.A: Average Price of Electricity to Ultimate Customers by End-Use Sector, by State, June 2026 and June 2025 — U.S. Energy Information Administration. Accessed 2026-09-11.
- [nj-crc-2025-year-in-review]CRC High Points: 2025 Year in Review (February 6, 2026) — New Jersey Cannabis Regulatory Commission. Accessed 2026-09-11.
- [nj-bpu-commercial-shopping]Energy Shopping for Commercial Customers — New Jersey Board of Public Utilities. Accessed 2026-09-11.
- [nj-bpu-bgs-2026]New Jersey Board of Public Utilities Certifies 2026 Electricity Auction Results (February 12, 2026) — New Jersey Board of Public Utilities. Accessed 2026-09-11.
- [pseg-electric-tariffs]PSE&G Electric Tariffs (B.P.U.N.J. No. 17, effective July 15, 2026) — PSE&G. Accessed 2026-09-11.
- [pseg-mybizenergy]PSE&G Business Energy Efficiency Programs — PSE&G. Accessed 2026-09-11.
- [noaa-cag-new-jersey]Climate at a Glance: New Jersey statewide heating and cooling degree days, 1991-2020 base period averages — NOAA National Centers for Environmental Information. Accessed 2026-09-11.