Gov. Phil Murphy threw a dash of cold water on Rep. Mikie Sherrill’s proposal to freeze utility rates if elected governor, saying he doesn’t know how such a policy could be implemented.
Sherrill, the Democratic nominee to succeed the term-limited governor, unveiled an aggressive set of proposals on Wednesday to address the state’s quickly rising electricity costs, a potent issue in this year’s race for governor. Headlining the proposals was a promise to declare a state of emergency over utility rates and a vow to freeze utility rates for the first year of her governorship.
Speaking to reporters after signing a pair of energy-related bills, the governor said he isn’t sure how such a plan would work, noting the energy system’s intersections with private firms would make such a policy difficult to implement.
“I’m not sure how you’d actually do that,” Murphy said. “These are private-sector players. I’m not sure if she got into the details as to how you do it, but we’ve been spending morning, noon, and night on energy, energy sources, energy affordability for years.”
When asked on Wednesday about what authority a governor has to perform such a move, Sherrill said her campaign has determined it’s possible. She said no other governor has taken a similar measure.
“This is something that we have looked into, that I’ve determined, as governor, I’ll have the power to do; to bring all of our utility companies to the table, [the Board of Public Utilities] to the table, who’s negotiating some of these prices, and make sure we’re driving down costs,” she said. “And there is also money that comes in through the BPU that I will use to defray some of this as well.”
In a statement today, Sherrill’s campaign said she’d have the power to freeze rates as governor but didn’t specify exactly how that proposal would be enacted.
“As a former Naval aviator, Mikie understands the importance of decisive action, which is why she has proposed bold, unprecedented action to drive down New Jerseyans’ soaring utility bills on Day One of her administration,” said Sean Higgins, a spokesperson for Sherrill. “Mikie understands the crushing cost crisis facing New Jersey families and businesses. Mikie has determined that as governor, she’ll have the power to bring our utility companies and the BPU to the table, to freeze rates, drive down costs, and give New Jerseyans the swift relief they need.”
Democratic leaders in the Garden State have sought to slow the increase in energy rates, which went up 20% in June and are set to increase by as much as 5% next June. State legislators passed a flurry of bills addressing the crisis — which could be especially harmful to Democratic incumbents during an election year — including the pair of bills Murphy enacted on Friday.
“It’s possible Mikie went into this in more detail — I don’t know what that means,” Murphy said. “These are private-sector players. I’m a proud progressive and a cold-blooded capitalist. I believe there are ways to get to where we want to get to. I’m open-minded to everything, but I’m not sure what that means, and I’d love to get more detail on that, which we will.”
Democrats have directed their ire toward the region’s power grid operator, PJM Interconnection. PJM runs the electric grid for New Jersey and 12 other states in the region; leaders of other states on the grid have also blamed PJM for rate increases, including Pennsylvania Gov. Josh Shapiro, whose lawsuit limited how much costs could go up next year. Sherrill, in fact, said she would direct her attorney general to sue PJM “to force them to end their mismanagement.”
Critics of PJM say the grid operator has failed to green-light hundreds of clean-energy plants across the network, leaving the region unable to keep up with ever-increasing demand. One bill Murphy has signed allows the BPU to investigate PJM’s pricing model. Utility companies say the state imports more than 40% of its energy from the PJM market.
State Sen. Bob Smith (D-Piscataway), the chair of the Senate’s Environment and Energy Committee, said the state could be forced to leave PJM if the alleged mismanagement continues.
“I don’t know if we’re going to still be in PJM next year or the year after,” Smith said during Friday’s bill signing. “If this isn’t a shot across their bow, I don’t know what is. They’ve treated New Jersey and many of the other states very shallowly, the way in which they’ve concocted these rate increases.”
PJM has repeatedly argued the grid operator is little more than a political scapegoat.
“We understand the political motive to shift blame for high electricity bills, but the fact remains: PJM operates as a not-for-profit that plans the power grid and administers federally regulated wholesale electricity markets,” PJM spokesperson Dan Lockwood told the New Jersey Globe in a statement. “Pointing fingers will not solve the supply-and-demand realities driving higher prices for consumers in New Jersey, including challenges that stem from failed policies. Our focus remains on working toward real solutions, because New Jerseyans deserve nothing less.”
Republicans, who are seeking to win the governorship and Assembly this November, argue Democrats are to blame for the price increases. Jack Ciattarelli, the GOP nominee for governor, has blamed Murphy’s clean-energy efforts for rate increases and worked to tie Sherrill to Murphy on the issue.
Sherrill, who also proposed an aggressive build-up of the state’s “energy arsenal,” didn’t limit her criticisms to PJM. She said that if the BPU
“If the current BPU commissioners are not going to address this, and if they are not going to drive down costs for people, then yes, they will be replaced,” she said.
Christine Guhl-Sadovy, the president of the New Jersey Board of Public Utilities, the state’s top energy regulatory board, declined to comment on Sherrill’s remarks about a rate freeze or the BPU, saying she does not comment on political campaigns due to her status as a member of the state government.
And Sherrill also said she’ll force utility companies like PSE&G, JCP&L, and Atlantic City Electric to increase transparency and “open up their books.” A poll of likely New Jersey voters found that while the state’s residents are split on who to blame for the increase in rates, a plurality blames the state’s utility companies, even though they possess no power over prices.
In a press release, the New Jersey Utilities Association, representing the state’s utility companies, said they have been “sounding the alarm” of the now-arrived increase in demand for years. The group said utility companies don’t earn profit from energy prices and already meet high transparency standards with reports to the BPU. The NJUA said the state needs to “take control of its energy destiny” to fix the issue in the long run.
“Because electric companies themselves don’t control these costs, we are unable to reduce them,” the statement said. “And we report our financial details regularly to the BPU by way of rate cases, where utility expenses are reviewed in a highly detailed and transparent fashion. This is how our regulators ensure that recovered expenses by utilities are ‘just and reasonable.’”
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