Governor announces steps ahead of electric utility increases

The Governor's Office is working to help manage anticipated utility price increases ahead of a rate hike set for June 1. 

“New Jersey ratepayers are preparing for an unprecedented increase in utility costs,” Gov. Phil Murphy said in announcing the effort Wednesday. “While the utilities are not responsible for the rate increases, they have a responsibility to protect ratepayers. 

"It’s clear that New Jersey’s four hometown electric utilities need to deliver more reasonable options," he added. "We ask that utilities share the load and commit to being part of the solution to the PJM cost crisis. These utilities have reaped billions in profits over the last 10 years. My administration will continue to identify and put all options on the table to mitigate rate increases.”

New Jersey Board of Public Utilities President Christine Guhl-Sadovy advised the governor on details of the cost-mitigation filings that were received from the state's four investor-owned electric utilities: Atlantic City Electric, Public Service Electric and Gas, Jersey Central Power and Light, and Rockland Electric Company. 

Even before the announced increases, Atlantic City Electric has been under fire locally as residents saw their bills increase three to four times normal or more.

The complaints led Congressman Jeff Van Drew to call for an audit of the company. They responded that there were attempts made to have constructive dialogue with Van Drew.

After the upcoming increases were announced, 15 Atlantic County mayors signed a petition to reject those hikes.

Meanwhile, the BPU required those electric utilities to file petitions by May 7, providing proposals to mitigate overall bill impacts to residential customers during high usage summer months. 

The customer cost mitigation plans were required to include rate deferment to lower usage months and other opportunities to provide rate stabilization and savings where possible.

As part of the effort to manage rate hikes in the short and long term, Murphy is calling for a series of actions, including:

• Urging New Jersey’s electric utilities to
  • Voluntarily expand the Winter Termination Program, which prevents service disconnections in the winter months, to July-September.
  • Suspend reconnection fees to a certain date past the summer peak usage months.
• Directing the NJBPU to evaluate all available funding and programming to stabilize utility bills.
• Directing the NJBPU to expedite opening another Competitive Solar Incentive Program Solicitation and Community Solar Energy Program Capacity Block by the end of 2025. 
• Directing the NJBPU to open a new proceeding on resource adequacy. Within this proceeding, BPU will:
  • Evaluate proposals to swiftly bring more generation online.
  • Continue to determine how New Jersey can best achieve its reliability, equity, and clean energy objectives while keeping costs to consumers as low as possible, and whether New Jersey is best served the regional capacity market administered by PJM Interconnection.
  • Identify policy opportunities to mitigate increased ratepayers costs due to demand growth driven by data center proliferation in the PJM-region.

Capacity market prices make their way to customers’ bills in part through the State’s annual Basic Generation Service auctions. The board’s authority over the auctions is limited and does not extend to influence pricing. 

As a result of the 2024 PJM Base Residual Auction and the 2025 BGS auctions, the projected average monthly customer bill increases, beginning June 1, range from 17.23% to 20.20%, depending on the electric utility service territory where the customer resides. 

The state has identified a variety of programmatic updates and efforts to lessen the immediate impact of the impending rate hikes. 

Last year, New Jersey’s energy assistance programs provided approximately $295 million in assistance to more than 455,000 families. 

Murphy's administration a second Residential Energy Assistance Payment, or REAP, initiative.

The program's debut last year disbursed more than $48.7 million via a one-time $175 bill credit for more than 278,000 qualifying households. 

The board also released a Straw Proposal to expand the Universal Service Fund, or USF, program, a bill credit program open to customers who are at or below 60% of the state median income. 

For a family of four that’s approximately $92,000 a year. The USF Straw Proposal seeks to increase the amount of bill assistance and require the utilities to meet certain enrollment obligations to ensure available resources are reaching those who qualify.

The board also opened another Community Solar Energy Program allocation with discounts of 15% or more on community solar credits applied to their bills. CSEP currently serves more than 28,000 New Jersey subscribers, who have received more than $37 million in bill credits with net savings of more than $7 million since the start of the pilot program. 

Clean energy like solar and storage are some of the cheapest and fastest generating resources to interconnect and are key to any short and long-term cost reduction and resource adequacy plan. 

Murphy also directed the NJBPU to release a Request for Information on nuclear generation and other advanced nuclear technologies to investigate potential opportunities that can help meet the growing need for new sources of generation.

There are several assistance programs available for utility customers. A detailed description of these programs, as well as the requirements and guidelines can be found on the NJBPU’s website at BPU Assistance Programs.