Fixing NJ’s Energy Crisis: State Report Demands PJM Reforms and Tech Center Accountability

NJ Utility Bills Soar 20%: Board of Public Utilities Outlines Plan to Fix the Regional Power Grid

the staff of the Ridgewood blog

TRENTON, NJ — Following a steep 20% jump in electricity bills across the state last year, the New Jersey Board of Public Utilities (NJBPU) has released a comprehensive report demanding fundamental reforms to PJM Interconnection, the regional grid operator managing electricity across 13 states and Washington, D.C.

Delivered to Governor Mikie Sherrill and state lawmakers, the state-mandated study concludes that PJM’s capacity market—known as the Reliability Pricing Model—is failing to deliver reliable energy at reasonable costs for ratepayers.

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New Jersey’s Growing Energy Dilemma: By The Numbers

While capacity charges make up 15% to 20% of a customer’s electric bill, state commissions like the NJBPU cannot directly set or regulate these rates. Compounding these wholesale cost increases is a sharp decline in local power production:

• 21% Drop in Generation: In-state energy production fell from 6.47 million megawatt-hours per month in 2016 to 5.1 million in 2024.

• 1,600+ MW Capacity Loss: Over 1,600 megawatts of reliable local generation have been retired over recent years.

• 40%+ Power Imported: New Jersey now relies on out-of-state sources for over 40% of its electricity, exposing ratepayers to volatile transmission fees and regional market swings.

• 76% Public Support: A Fairleigh Dickinson University poll revealed that 76% of residents support constructing new natural gas plants within the state to help lower energy costs.

“New Jersey ratepayers deserve a clear explanation of why their bills are rising and what can be done about it. The fastest way to lower bills is getting new power generation built.”

— Ben Hertz-Shargel, NJBPU President

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The NJBPU’s 4 Key Recommendations for PJM Reform

To stabilize costs and protect residents from extreme price spikes, the NJBPU outlined four core policy recommendations:

1. Make Large Energy Users (Data Centers) Pay Their Share: Require energy-intensive facilities like AI data centers to bring their own new power generation to the grid or accept lower-priority service, preventing residential customers from subsidizing Big Tech’s energy footprint.

2. Modernize Market Design: Transition PJM away from single annual auctions to seasonal pricing that reflects real-time supply conditions, while shifting to “prompt” auctions based on current forecasts rather than three-year estimates.

3. Expand Long-Term Contracting: Provide energy developers with long-term financial guarantees to secure financing for new power generation and reduce market volatility for consumers.

4. Grant States Active Governance Roles: Update PJM and Federal Energy Regulatory Commission (FERC) rules so state regulators have a direct voice in regional decisions affecting local utility rates.

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What Comes Next for New Jersey Ratepayers?

Over the next year, the NJBPU plans to advance these reforms through FERC proceedings, partner with neighboring states, and leverage new statutory authority to regulate costly local transmission projects that drive up utility bills.

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• Tags & Keywords: New Jersey Utilities, NJ Energy Crisis, NJBPU, PJM Interconnection, Electricity Rates, Bergen County News, NJ Politics