Electric bills across New Jersey jumped again this summer, leaving families to make tough decisions about what they can afford.
A Fairleigh Dickinson University poll shows just how unsettled the issue has become: more than one in four voters blame the state’s utility companies.
The response isn’t surprising. Energy policy in New Jersey has become a maze of competing claims and political spin.
But one fact cuts through the noise: monopoly utilities for years have offloaded their spending on the energy grid to ratepayers and secured guaranteed returns for their shareholders along the way.
Here’s how it works.
Regulated utilities like PSE&G, Atlantic City Electric, and Jersey Central Power & Light don’t actually profit from the electricity itself. They make money on infrastructure spending.
The more they spend on substations, poles, and wires, the more they can bill back to customers with a fixed return of approximately 10 percent. It’s a model that rewards expansion, even when it doesn’t make the system more affordable or reliable for customers. It’s no surprise, then, that the utilities increase their spending plans with each passing year.
This setup helps explain why bills are climbing faster than incomes and inflation. Demand for power is increasing, thanks in part to the growth of data centers and AI, but recent increases in the cost of electricity, following 15 years of stable electricity prices, isn’t the whole story.
Studies have shown that most of the increase over time is tied directly to the utility monopoly. In fact, utilities’ spending on electricity transmission almost tripled from 2003 to 2023, and spending on distribution — the equipment used to deliver electricity directly to homes and businesses — went up 160% in the same period. For struggling families, those increases are what sting the most.
Politicians are eager to find a solution to rising energy costs, and the same utilities responsible for our sky-high rates have a preferred solution: allow them to enter the power generation business and charge rate payers for their investment.
After decades of using their monopoly power to drive up the cost of getting electricity into our homes, they now want the power to do the same to the cost of the electricity itself. Only in the world of regulated monopolies could such a proposal be delivered with a straight face.
State leaders have a choice. They can hand even more power to regulated utilities to drive up costs for New Jersey families, or they can stand up to the utilities’ power grab.
That means demanding more accountability on utility spending and resisting efforts to expand monopolies into new markets. A good first step will be to investigate utilities’ current and historical spending and scrutinize their guaranteed profit rates.
Families shouldn’t have to cut back on groceries or medicine to keep the lights on or their homes cool in the summer heat. Until regulators and lawmakers start to hold utilities accountable, New Jerseyans will remain trapped in a system where rising bills are treated as business as usual.
It doesn’t have to be this way. We can build an energy system that balances affordability, reliability, and innovation without giving monopoly utilities a blank check.
With growing public awareness of utility rate hikes, the time is right for a new approach that puts families ahead of profits. The sooner Trenton takes action, the sooner families will see real relief.
Ravi Bhalla is the Mayor of Hoboken and Democratic nominee for State Assembly in Legislative District 32, covering Hoboken and parts of Jersey City.
The opinions expressed in this op-ed are those of the author and do not necessarily reflect the views of ROI-NJ.
