According to New Jersey Government Energy Aggregation (NJGEA):
Government Energy Aggregation is a program that allows local governments in the Garden State to create a large buying group of residential and non-residential electricity accounts in order to seek bids for cheaper energy rates.
Customers served by New Jersey utilities Atlantic City Electric Company (AECO), Jersey Central Power & Light (JCP&L), Public Service Electric & Gas (PSE&G), and Orange & Rockland (NJ Division: Rockland Electric Company, RECO) receive their power at a fixed rate, set annually via a series of energy auctions, and regulated by the NJ Board of Public Utilities (BPU).
By aggregating, or grouping, a large number of residential and non-residential accounts together, economies of scale are created. These economies of scale set conditions for participating municipalities to achieve greater savings during a competitive bid situation than could normally have been achieved by the individual customer.