How is Trenton working to address NJ's coming electricity rate hikes?

How is Trenton working to address NJ’s coming electricity rate hikes?

May 2, 2025

With New Jersey utility rates expected to rise this summer by as much as $20 each month — or about 17% to 20% — talk in Trenton has revolved around how the state got here and what can be done to make sure it doesn’t happen again.

The rate hikes, approved by the state’s Board of Public Utilities in February, go into effect in June because electricity auction prices were higher as a result of higher demand and lower supply.

The grid operator for New Jersey and 12 states in the Mid-Atlantic region, PJM Interconnection, has largely taken the blame from officials, especially at a marathon joint legislative committee meeting in March at the Statehouse.

Could renewable energy programs help?

Many lawmakers have argued that the renewable energy programs, like those New Jersey has been focused on using, could lower costs for ratepayers if they were allowed to connect to the grid.

PJM is responsible for operating the electric grid for a huge swath of the Mid-Atlantic and Midwest, stretching from New Jersey to North Carolina and from the coast into Illinois, covering about 70 million residents within its service area.

The company’s CEO, Manu Asthana, announced his resignation earlier this week. He intends to leave his post at the end of the year.

The forecast includes higher demand as AI data centers come online throughout the PJM network.

What are Trenton lawmakers saying about NJ data centers’ impact on electricity rates?

Last month at a state Senate Legislative Oversight Committee, state Sen. Andrew Zwicker, that committee’s chair, put the energy usage of data centers into perspective by saying they already use 2% of the energy globally.

“The environmental impact of AI is remarkable,” he said. “Training a single large language model like OpenAI’s ChatGPT consumes approximately 1,300 megawatt hours of electricity, the same amount used by 130 U.S. homes in a year.”

A report from Synapse Energy Economics commissioned by Evergreen Collaborative, a policy advocacy group, unveiled Tuesday indicated that changing the PJM project approval process could cut household energy costs and potentially create jobs throughout the region.

The current process can take as long as five years to approve new projects.

Zwicker said Wednesday that he thinks the Legislature and the governor should work together to put “immediate pressure on PJM to pressure them to get more projects onto their grid.

“We can’t do this legislatively but by putting a lot of pressure on them to change their rules, follow what the federal government has already ordered them to do, we can ideally force them to release and get some significant number of these projects attached, which would then drive the cost down for everybody,” he said.

Those are more long-term plans for the next round of energy auctions. In terms of increased costs for ratepayers, Zwicker noted the Legislature is in the middle of a budget cycle with a “very tough budget in front of us right now” and while it’s not guaranteed, he thinks the state should consider putting more money toward utility assistance programs for “immediate rate relief.”

“I don’t want to suggest this is a given in any way, shape or form but that’s the only other thing we can have any possibility of doing,” he said.

What are NJ Republicans saying?

Not everyone thinks PJM is to blame. State Senate Republicans are pointing fingers at the policies of the Murphy administration.

Senate Republican Leader Anthony Bucco said in a statement that residents shouldn’t be “misled by the claims from Trenton Democrats that PJM is solely to blame for soaring energy costs.”

“The real issue is that we won’t be able to bring new energy sources online fast enough to cut energy costs unless the administration changes its current energy policies,” he said. “No investor is going to commit to traditional energy solutions in New Jersey with its hostile permitting and unrealistic mandates for full electrification by 2035.”

Bucco said current solar and wind plans aren’t going to be online any time soon and aren’t enough to meet the demand, and that because of Gov. Phil Murphy’s energy master plan, the state will be “forced to rely on the grid, which will drive prices even higher and force us to buy energy from the dirtiest sources in the region.”

Link to article

Latests Posts

Follow on Social Media

Get in Touch

Phone

Email

Address