2 days ago
New Jersey Democrats propose $430M plan to defray electricity price increases
Gov. Phil Murphy announces a plan to give ratepayers $100 minimum to defray a sudden, sharp increase in electricity prices in Newark on June 5, 2025. (Courtesy of the governor's office)
New Jersey will send ratepayers at least $100 to defray the impact of a steep rise in electricity prices that took effect this month, top Democrats announced Thursday.
The $430 million program, which is not yet approved by state energy regulators, would provide each of the state's 3.9 million ratepayers with $100, with an additional $150 for low- and moderate-income residents.
'We're taking this step today because the fact is the people of New Jersey are being battered by the rising cost of energy, and by the way, this is not unique to New Jersey,' Gov. Phil Murphy said at a press conference in Newark. 'You can look all around the country right now, and certainly all around this region to see that we are not alone. Wholesale electricity prices are up multiples of what they were even a year ago today.'
Christine Guhl Sadovy, president of the state Board of Public Utilities, suggested residents enrolled in the state's winter termination program would be eligible for the $150 payment. That program bars utility shutoffs between Nov. 15 and March 15.
Officials were deliberating a second $100 payment but had not reached a decision as of Thursday afternoon, Murphy said.
It was not immediately clear when or how the benefits would be paid. Murphy suggested they could come in September or October but cautioned that the timeline is hazy as the aid still needs approval from the Board of Public Utilities, whose next meeting is set for June 18.
Lawmakers' announcement comes just days after electricity prices rose by roughly 20% at the start of June, pushed upward by the results of price-setting auctions held in July and February, and as hot weather pushed temperatures to roughly 90 degrees in much of the state Thursday.
It also comes as all 80 seats in the state Assembly — which Democrats control by a 52-28 majority — are on the ballot in the fall (the primaries are on Tuesday).
Funding for the payments would come from the state's Clean Energy Fund, the state's share of Regional Greenhouse Gas Initiative money, and the Solar Alternative Compliance Payment, which is paid by electricity suppliers that are unable to meet the state's renewables standard.
Some progressive groups took exception to the funding sources.
'We appreciate that the governor and lawmakers are taking seriously the strain high energy costs place on families, but how we deliver relief matters. Diverting funds from RGGI and the Clean Energy Fund risks weakening the very programs that lower long-term costs, strengthen our grid, and create local jobs,' said Alex Ambrose, a policy analyst for New Jersey Policy Perspective.
Richard Henning, president of the New Jersey Utilities Association, a trade group that includes the state's four electric distribution companies, said the organization supported the proposal.
The price of electricity rose sharply after being roughly level for more than a decade as supply tightened and demand shot upward, driven higher by power-hungry artificial intelligence data centers proposed throughout the footprint of PJM Interconnection, the grid operator for New Jersey, 12 other states, and the District of Columbia.
Democrats have blamed PJM for the price spike, charging yearslong delays in its interconnection queue had depressed supply by leaving projects, including 79 in New Jersey, without a line into the grid.
'We in the Legislature have a tone of outrage that New Jersey is being held hostage,' Sen. John Burzichelli (D-Gloucester) said.
Murphy said he and legislative leaders would meet with PJM CEO Manu Asthana next week.
Republicans have blamed the Murphy administration's renewables-heavy energy plan and the sunsetting of some existing fossil fuel plants for the increases. They and some Democrats have said the state should pursue a more diverse energy mix to stall further price hikes.
'It simply delays the pain to avoid political fallout in an election year,' Sen. Tony Bucco (R-Morris), his chamber's minority leader, said of the plan announced Thursday. 'This is not relief, it's a cover-up. Trenton Democrats are once again trying to deflect the consequences of their own failed energy policies.'
Legislators and regulators are considering other methods of reining in energy prices. The Board of Public Utilities is fielding proposals that could delay electricity price increases, leaving ratepayers with deferred balances they would be responsible for paying later.
Guhl-Sadovy declined to comment on the status of that proposal or the effect Thursday's announcement would have on it.
In recent weeks, legislators have advanced bills that would change how state regulators set utilities' profit margins, require they study data centers' impact on energy rates, and create a new rate-setting process for data centers, among others.
'Like so many states across the country, we recognized early on that the rates would not be sustainable, more importantly, that they just certainly weren't fair. That's why we went to work,' said Assembly Speaker Craig Coughlin (D-Middlesex).
