Legislation directing the state Board of Public Utilities to investigate the regional pricing system responsible for electric utility rates as well as requiring greater transparency was signed into law Aug. 15 by Gov. Phil Murphy.
The law, SJR-154/AJR-216 and authored by state Sens. John Burzichelli and Senator Linda Greenstein, also directs the utilities board to make any needed reforms identified by the investigation.
“The energy auction that is the principle cause for the spike in utility bills is clearly broken and in desperate need of reform,” said Sen. Burzichelli (D-Gloucester/Salem/Cumberland). “It failed to make consumer affordability a priority, put a chokehold on the energy supply line and is susceptible to manipulation. This investigation is needed to identify the specific causes and determine the reforms needed to reduce costs and increase the supply of new energy. It will bring more accountability to the process and better protect ratepayers from unjustified utility bills.”
The resolution also urges PJM Interconnection LLC, the regional transmission organization that serves New Jersey and other states, to expedite the review of new electricity generation applications to relieve a backlog that has further spiked electricity prices.
Wholesale electricity prices in New Jersey rose by about 20% in June. Electricity rates are climbing, spurred partially by artificial intelligence data centers’ surging energy demands, while at the same time, the state’s plans for new renewable generation — such as offshore wind — have not provided enough supply. Since 2017, the state has shuttered five coal-fired power plants and one nuclear facility and has been struggling to make up the energy shortfall.
“The rising cost of electricity bills is putting a heavy burden on consumers,” said Sen. Greenstein (D-Middlesex/Mercer). “The BPU needs to take decisive actions to hold down costs. These price hikes are a burden for all ratepayers but are especially harmful to working families and low-income residents who are already struggling to make ends meet.”
PJM administers a competitive auction among 13 states to secure electric power on behalf of New Jersey customers at prices “consistent with market conditions,” according to state law. The increased costs of the capacity market, coupled with greater demand and a chokehold on the supply line have contributed to the price hikes.
The results of the investigation will be submitted to the Legislature and the governor within 12 months, according to the law.
The resolution was approved by the Senate with a vote of 25-12 and by the Assembly with a vote of 57-23.
Also on Aug. 15, a bill sponsored by Assemblyman Robert Karabinchak designed to increase transparency and accountability at PJM, including how meeting participants vote on issues that utilize ratepayer dollars, was signed into law by the governor. The measure aims to increase public accountability by making the voting records and PJM meeting information transparent to the residents of the State of New Jersey.
Under the bill, electric public utilities in New Jersey will be required to file an annual report to the BPU, which, in addition to the vote records, will include a description of what transpired at the meeting, including the purpose of the meeting, and the role the utility played in the meeting. Additionally, it will include a brief description explaining how each vote furthers the state’s goals of prioritizing the affordability, reliability, and sustainability of electricity production, as well as consumption and conservation.
Assemblywomen Melinda Kane and Garnet Hall also sponsored the legislation.
