Gothamist
A non-profit newsroom, powered by WNYC.
Gothamist
Listen Live
News
NJ electric bills just rose 20%. Prepare for another spike next summer, experts say.
By
Mike Hayes
Published Jul 22, 2025
Share
FacebookTwitterRedditEmail
Never miss a story
Email address
By submitting your information, you're agreeing to receive communications from New York Public Radio in accordance with our Terms .
Chris Ison - PA Images/PA Images via Getty Images
By
Mike Hayes
Published Jul 22, 2025
Share
FacebookTwitterRedditEmail
We rely on your support to make local news available to all
Make your contribution now and help Gothamist thrive in 2026. Donate today
Gothamist is funded by sponsors and member donations
Energy customers in New Jersey just saw their monthly bills spike 20% in June. Now, Garden State residents could learn Tuesday whether they’ll shoot even higher next summer.
Electrical grid authority PJM — which runs the marketplace that sets prices for energy in New Jersey, plus 12 other states and Washington, D.C. — is wrapping up its annual capacity auction on Tuesday. The yearly event brings the energy industry together to determine how much electricity generators will be paid to deliver all the power that’s needed for the following year.
Last year’s auction set off alarm bells around the region when industry prices rose 800% from the prior year due to rising demand for electricity and a lack of new energy supplies. Not much has changed in the last 12 months, according to industry experts, many of whom expect energy bills to rise even further. Critics of PJM said the company has failed to both bring more energy sources online and to enact enough reforms to the process for approving energy generators to connect to the grid.
At the heart of the rise in auction prices is what energy companies call a megawatt day — the amount paid to energy generators per day over the course of the year for every megawatt of energy they’re capable of putting on the grid. That price rose from $28.92 to $269.92 last year. As a result, electric customers across the entire PJM footprint were hit with covering an additional $14.7 billion in costs starting in June 2025.
PJM didn’t respond to a question about how this year’s auction price will impact consumer costs next year. Spokesperson Dan Lockwood told Gothamist that critics of the interconnection process aren’t taking into account the progress that the company has made.
“Importantly, today about 46 [gigawatts] of projects are through PJM’s process with signed agreements, but the construction of these projects is being stymied by factors well beyond PJM’s control — issues with project financing, permitting, and supply chain challenges,” he said.
During a tense March hearing earlier this year, PJM executives told NJ lawmakers that the drastic jump was largely due to future demand for energy outstripping supply. PJM officials blamed a “proliferation of data centers,” increased electrification of homes and vehicles and “the onshoring of the U.S. manufacturing industry.”
This year’s auction includes one major difference. PJM has agreed to a cap, as well as a floor, on prices. It’s the result of a recent settlement in a 2024 lawsuit by Pennsylvania Gov. Josh Shapiro. Four other governors from Illinois, Maryland, Delaware and New Jersey where PJM operates also submitted a joint letter to the court supporting the lawsuit. They criticized the design of PJM’s capacity auction, claiming it led to higher consumer prices.
The cap price, set at $325 per megawatt day, would still represent another significant jump from the prior year, but Shapiro’s office said in January that it’s substantially lower than the $500 that PJM was seeking.
Whether Tuesday's auction price reaches that cap is anyone’s guess.
“ I think most of us expect the prices to be about the same or higher. But it's always hard to tell when you have one of these auctions,” said Abe Silverman, a research scholar at Johns Hopkins University whose work is focused on wholesale energy market design.
Elowyn Corby, the Mid-Atlantic Regional Director for advocacy nonprofit Vote Solar, told Gothamist that the “enormous amount of uncertainty” over where prices will go Tuesday illustrates how relying on the auction process is not a good alternative to “long-term planning” by PJM, lawmakers and other stakeholders to solve supply and demand issues.
“We are putting the fates of rate payers in the hands of, if not quite chance, then certainly the capriciousness of markets,” she said.
Evan Vaughn, executive director for the Mid-Atlantic Renewable Energy Coalition, said he expected prices to be “maxed out” at the highest possible price that the settlement allows.
Vaughn, whose organization provides legislative and policy advocacy for 50 solar, wind, and battery-storage companies in the region, said his prediction is based on the fact that there hasn't been much new generation brought online in order to increase supply since last year.
“Nothing has fundamentally changed to cause the price to clear lower,” he said.
If Tuesday’s auction does max out at $325 per megawatt day, it would mark a significant increase from last year’s price spike.
“ The cost to consumers would be in the neighborhood of $20 billion across the region,” said Nick Lawton, a senior attorney with Earth Justice.
The result would likely thrust energy prices to the front of voters’ minds ahead of New Jersey’s gubernatorial election later this fall.
“[It] would trigger a political backlash of biblical proportions,” said Lyle Rawlings, president and CEO of New Jersey-based commercial solar installation firm Advanced Solar Products.
Logjam on new capacity
PJM has faced criticism over a backlog of thousands of energy projects waiting for approval to connect to the grid so their construction can begin. In 2022, PJM shut down submissions to its queue so it could deal with the logjam. According to the company, it plans to have the backlog cleared by the end of year. However, many projects could take years to come online and start alleviating supply issues.
In New Jersey, Gov. Phil Murphy’s administration has been laying the blame for high energy costs firmly at the feet of PJM. In April, Murphy sent a letter to the Federal Energy Regulatory Commission accusing PJM of market manipulation.
State officials in the PJM region are putting more pressure on the company. Last week, Murphy, along with governors from nine other states, sent a letter to PJM calling for reforms, including the appointment of new leadership.
“At a time of rapidly rising load growth, PJM’s multi-year inability to efficiently connect new resources to its grid and to engage in effective long-term transmission planning has deprived our states of thousands of jobs and billions of dollars in investment that may flow to other regions,” the letter states.
The governors also called for two newly vacant PJM board seats to be filled by candidates that they choose.
Regardless of what the results of the capacity auction end up being, experts already expect consumer energy costs across the nation to be negatively impacted by President Donald Trump’s newly signed tax and spending bill, which guts incentives for renewable energy production.
Think tank Energy Innovations’ analysis of Trump’s bill said the legislation would increase utility bills by 5% in New Jersey over the next decade. Nonpartisan policy institute Center for American Progress wrote in its analysis that the bill would increase average annual electricity costs by $110 per U.S. household by 2026.
Tagged
new jersey
Mike Hayes
Mike Hayes covers equity and access to opportunity in New Jersey. He joined WNYC and Gothamist in 2023. Before that, he worked as a freelance journalist writing about policing and criminal justice. He has written for ProPublica, CNN, HuffPost, BuzzFeed News and The Appeal. He is also the author of the book, “The Secret Files: Bill De Blasio, The NYPD, and the Broken Promises of Police Reform.” In 2019, he was a finalist for the Livingston Award for Young Journalists.
Read more
Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
MORE news
Dump truck driver hits and kills cyclist on 34th Street in Midtown, NYPD says
It's the latest in a string of hit-and-run deaths in the city in recent months.
By
Liam Quigley
Published Sep 28, 2026 at 4:15 p.m. ET
New ingredient mandated for Latin American kitchen, restaurant plates in NJ
The Garden State now requires that corn masa dough and flour made and sold in the state be fortified with folic acid.
By
Arya Sundaram
News
New ingredient mandated for Latin American kitchen, restaurant plates in NJ
The Garden State now requires that corn masa dough and flour made and sold in the state be fortified with folic acid.
By
Arya Sundaram
A Brooklyn jail cell filled with smoke. The emergency button failed, a lawyer said.
By
Samantha Max
Crews launch tunnel machines to dig first new Hudson River rail tunnels since 1910
By
Michael Sol Warren
NYC nor’easter dries up after weather service reports minor flooding
By
Ramsey Khalifeh
Never miss a story
Catch up on the most important headlines with a roundup of essential NYC stories, delivered to your inbox daily.
Sign upEmail address
By submitting your information, you're agreeing to receive communications from New York Public Radio in accordance with our Terms .