Residential customers in the Garden State will face electricity bill hikes of up to 20% beginning in June based on the results of a recent electricity supply auction, the New Jersey Board of Public Utilities (NJBPU) said.
Rep. Josh Gottheimer (NJ-5) sent a letter to the NJBPU stating that the hike is unconscionable, especially following a rate increase in November 2024.
The BPU last week approved the results of “Basic Generation Service” annual auction, thus allowing higher prices driven by escalating demand for electricity.
“Just months after announcing a rate hike in November, the Board of Public Utilities is whacking families with another increase upwards of $330 per year,” Gottheimer said.
“This is outrageous, especially as families are already struggling with high food and housing costs. We have to give hardworking families a break — that’s why I’ve introduced legislation to help provide relief to help offset rising energy costs and improve transparency surrounding rate hikes. I’ll never stop fighting so Jersey families can keep more of their hard-earned money,” he added.
The BPU said many New Jersey residents will likely see higher electric bills beginning June 1. The rate hike will affect customers of utilities across the state, with average PSE&G customers paying $26 per month ($312 per year).
Atlantic City Electric customers will pay an extra $28 per month ($336 per year), JCP&L customers will pay an extra $22 per month ($264 per year).
“This week’s BGS auction results are the culmination of several issues: rapidly increasing demand for electricity, coupled with limited supply growth due to lagging new generation interconnection, and flawed market dynamics in the PJM region,” said Christine Guhl-Sadovy, President of the NJBPU.
“PJM’s recent capacity auction results are the main driver of these increases. The Murphy Administration will continue to aggressively push and hold PJM accountable to address rising costs by expediting interconnection and implementing additional market reforms, all of which will help drive down costs for ratepayers which is a priority for the BPU,” she added.
The BGS auction
The BGS auction determines, in part, the cost of electricity for most New Jersey residents and many businesses for a 12-month period starting June 1, 2025. The NJBPU’s authority over the auction is limited to certifying the results as consistent with market trends and does not extend to influence pricing. Winning prices for all four EDCs increased compared to last year’s auction, with the average monthly bill projected to increase between 17.23% and 20.20% depending on the service territory.
The state’s four regulated EDCs do not earn a profit on the cost of the electric supply secured in the auctions. These costs are passed through directly to ratepayers. A variety of factors led to this result, including increases in the PJM-determined cost of capacity caused by rapidly increasing electricity demand growth driven by data center growth and other factors throughout the region, lagging PJM interconnection queue timelines for new resources, and flawed market dynamics.
“Rate Counsel is deeply concerned about the outcome of the auction. There was a significant increase in prices, with the average electric ratepayer seeing an increase of over $20.00 per month, which have a substantial impact on New Jersey families and businesses, especially those least able to afford it,” said Brian Lipman, Director, New Jersey Rate Counsel.
“There are a number of factors that led to these higher prices, but a significant driver is PJM and its failure to fix the capacity market. The last PJM capacity market auction cleared at its highest price in history. While some of that is due to an anticipated increase in the demand for electricity, most of the increase is due to PJM’s failure to fix its market rules or timely interconnect new generation supply. This was not simply an issue of supply and demand as PJM’s continued failure to fix its market rules and interconnection queue will lead to even higher prices in the future and slow our ability to build out our electrical infrastructure. The Board’s authority is limited at the federal and regional level, but must carefully examine every state-level filing before it with an eye towards affordability,” Lipman added.
Curbing Costs
These price increases have occurred despite months of advocacy by the Murphy Administration and other States in the PJM region to reduce costs. In January, Governor Murphy called on PJM to take immediate action to respond to the escalating cost crisis. In October, Governor Murphy and governors from Pennsylvania, Illinois, Maryland, and Delaware called for urgent action in PJM to curb record-high electricity prices.
As a result of a complaint from Pennsylvania Governor Josh Shapiro filed with the Federal Energy Regulatory Commission (FERC) against PJM and letters from PJM founding member governors criticizing flaws in PJM’s auction that threatened to impose significant new price increases, PJM agreed to a price cap to save consumers across the region $21 billion over two years.
The average monthly bill for a residential ratepayer using BGS service is expected to increase for most customers. Specifically, ratepayers supplied by PSE&G will see an average estimated bill increase of 17.24%, ratepayers supplied by JCP&L will see an average estimated bill increase of 20.20%, ratepayers supplied by ACE will see an average estimated bill increase of 17.23%, and ratepayers supplied by RECO will see an average estimated bill increase of 18.18%.
Help is Available
If you or someone you know is having difficulty paying their utility bills, there are several assistance programs available: Universal Service Fund, Fresh Start Program, Payment Assistance for Gas and Electric (PAGE) Program, Low Income Home Energy Assistance Program, Lifeline, NJ Shares, and NJ Comfort Partners. Additionally, the Winter Termination Program is a utility-led program that protects qualifying ratepayers from service disruption during the winter months from November 15 until March 15. A more detailed description of these programs, as well as the requirements and guidelines can be found on the NJBPU’s website at https://nj.gov/bpu/assistance/programs/.
About the New Jersey Board of Public Utilities
NJBPU is a state agency and regulatory authority mandated to ensure safe, adequate and proper utility services at reasonable rates for New Jersey customers. Critical services regulated by NJBPU include natural gas, electricity, water, wastewater, telecommunications and cable television. The Board has general oversight and responsibility for monitoring utility service, responding to consumer complaints, and investigating utility accidents. To find out more about NJBPU, visit our website at www.nj.gov/bpu.