Amid Soaring Electricity Costs, Senate Pushes for Investigation
A day after New Jersey consumers began paying as much as 20% more for electricity, the state Senate passed two bills aimed at investigating the reasons behind the soaring prices.
The Senate June 2, unanimously passed S4318/A5466, which directs the Board of Public Utilities to conduct a year-long study on the impact data centers have on utility rates. The centers use tremendous amounts of electricity to process data, especially for AI purposes. The Assembly approved the bill 75-2 on May 22. It now goes to the governor for his signature.
A second, more controversial measure, SJR154/AJR216, would require the BPU also to investigate the higher prices as a result of an annual auction by PJM Interconnection, a multistate electricity wholesaler from which local utilities buy the power and wire it to residences and businesses. That measure passed on a 25-12 vote, with all 12 no votes from Republicans. It has not yet had a vote in the Assembly.
In a statement, PJM says its auction operations were approved by the Federal Energy Regulatory Commision, “and the rules for the 2025/2026 auction were found to be just and reasonable.”
“These higher prices are the result of a loss in electricity supply caused primarily by decarbonization policies that have led to an uptick in generator retirements, coupled with an unprecedented spike in electricity demand due largely to the advancement of data centers to power artificial intelligence, the electrification of vehicles and heating systems and the onshoring of U.S. manufacturing,” PJM Interconnection, based in Norristown, Pennsylvania, said.
PJM critics say the company is taking too long to shift the regional power grid to renewable resources from fossil fuels. Last month a state Assembly panel passed a package of eight bills designed to make utilities more affordable.
In a study released on May 29, New Jersey Policy Perspective, a Trenton-based progressive research group, called for the addition of clean energy as “one of the most effective ways to lower costs for ratepayers and improve grid reliability across the PJM region.”
“Achieving that goal will require greater transparency in PJM’s decision-making and meaningful reforms to its planning and interconnection processes so that new energy projects can come online faster,” the report stated.
While Senate Democrats and Republicans in Trenton agreed that the ratepayer increase is a burden, they differed on how to address it.
“The problem begins and ends with a grid that doesn’t work,” Senator Bob Smith, a Democrat from Piscataway, said before the vote. “The grid is held together by chewing gum, toothpicks, and bobby pins.” The bill’s sponsor, Senator John Burzichelli, a Democrat from Paulsboro, said the utilities board potentially could refer the matter to the state attorney general’s office.
“PJM ran an auction that served their interest, not ours,” Burzichelli said. All Senate Republicans opposed the bill, with some saying the utilities regulator should have no role in any inquiry. In January, the board announced that the average New Jersey electricity bill would increase by about $20 a month starting June 1.
“Allowing BPU to be an investigative body is akin to having the fox watch the henhouse,” said Senator Michael Testa, a Republican from Vineland.
Senate Republican Leader Anthony Bucco, from Boonton, observed that seven years ago, New Jersey was an energy exporter, but now imports as much as 40% of its electricity. “We are at the mercy of the market, and that is why our energy costs are going up,” Bucco said.
This article was written by Cora LeCates and Justus Wilhoit, courtesy of the NJ State House News Service
