Legislators point fingers with utility prices set to increase

With electricity prices set to rise this summer, state legislators met Friday to ask for answers and look for solutions. 

A joint committee of senators and Assembly members heard testimony from energy officials and experts about the expected $25 monthly price jump in electric bills and other energy-related woes during a six-hour hearing.

Democrats and witnesses placed much of the blame on PJM Interconnection, the organization operating the electric grids of New Jersey and 12 other states. State Sen. Paul Sarlo (D-Wood-Ridge), the chair of the select committee tasked with addressing the issue, said PJM has faulty energy auction systems.

Sarlo and other Democrats said the organization has failed to effectively add energy sources to the grid, causing a stagnation in energy supply while demand jumps due to an increase in energy-intensive data centers. They also blame the Trump administration and other Republicans for their “obstruction” of Democratic clean-energy goals.

“This is not simply a temporary price spike,” Sarlo and other Senate Democrats said in a release. “It is the direct result of systemic failure and deliberate neglect. Families are paying the price for years of missed opportunities and grid mismanagement. The one-two punch of PJM’s dysfunction and Republican obstruction has put New Jersey households in an untenable position.”

New Jersey Rate Counsel Brian Lipman—the official tasked with advocating for residents, businesses, and other ratepayers—said the spike in prices can be attributed to many issues, especially PJM’s handling of the grid. In written testimony he delivered to the committee, he said years of low energy prices effectively masked issues that would arise if the market tightened.

He said the state legislature shares some of the blame, arguing that some mandates placed on utilities were cost-intensive and the effects are starting to be felt.

Lipman said the Board of Public Utilities, the state regulatory board tasked with overseeing the state’s utilities, hasn’t been perfect, but that many of the issues the board faces fall outside of its control. The board has been a prominent target of Republicans.

But Lipman placed much of the blame on PJM, saying the organization is responsible for “holding up” electric generation because of pending projects in the organization’s queue. He also said PJM’s energy auctions are beset by inefficient market rules and don’t function properly to signal a needed increase or decrease in supply.

“For a long time, lower costs have hidden the defects in the market,” Lipman wrote. “Now that the market is tighter, the flaws have become glaring. The reality is that we have known that the day would come where demand would begin to increase, and PJM was not prepared.”

Republicans aren’t so sure. They accuse Democrats of promoting ineffective clean-energy policies and trying to dodge responsibility for price spikes during an election year when the governorship and Assembly are up for grabs.

Senate Republican Leader Anthony Bucco (R-Boonton Twp) said PJM has been sounding the alarm about impending issues for years, but argues legislators and the Board of Public Utilities didn’t take the warnings seriously.

“While the Democrats would like to put the blame on everybody else but themselves, the fact of the matter is they’ve had control of the statehouse for eight years now, complete control, and the policies that they’ve implemented—moving New Jersey to complete electrification in a short period of time—has increased demand,” Bucco said.