NJ electric bills are about to jump 20% — who's to blame and what can you do?

New Jerseyans’ electricity bills are about to get more expensive — jumping more than $20 for an average customer starting Sunday.

The rate increases affect residents and most businesses served by of all four of New Jersey’s investor-owned utility companies. Bills for PSE&G customers — largely in northeast, central and southwest New Jersey — will go up by an estimated 17.24%, according to the state Board of Public Utilities, which regulates energy companies in the Garden State. JCP&L customers — mostly in the northwest and parts of Central Jersey, will go up an estimated 20.2%.

Similar increases are expected for Atlantic City Electric in South Jersey, and Rockland Electric, which serves pockets of Bergen, Passaic and Sussex Counties.

The increases are largely due to pricing set at the state’s annual Basic Generation Service auctions, approved by the Board of Public Utilities earlier this year, and will show up in the “supply” portion of ratepayers’ bills. That reflects the cost of the energy the utility companies are paying PJM Interconnection, the region’s electric grid manager — and the target of Gov. Phil Murphy's ire for the sudden hikes.

“I believe that billions of dollars in excessive costs for consumers are the direct result of fundamental flaws in PJM’s capacity market and were foreseeable and preventable,” the governor wrote in a letter to the Federal Energy Regulatory Commission in April. But preventable or not, the new rates are moving ahead.

Here’s some more information about why rates are increasing — and what you can do about it.

Why is this happening now?

While companies like PSEG are able to produce power they have to sell it in the PJM marketplace, which serves 13 states and the District of Columbia — all of which have differing energy needs and priorities.

That leaves state utilities like PSE&G, which is owned by PSEG, subject to market pressures they can’t individually control.

But why the massive increase now? That depends on who you ask.

The governor blames PJM for what he describes as lagging efforts to increase generation, and in his April letter to the feds, Murphy said he believed the higher rates could be due to market manipulation.

PJM says it’s seen no evidence of market manipulation, but that the state’s dependence on energy import is to blame.

"New Jersey has insufficient generation in-state to meet its needs, and has to make up this difference through imports," PJM said in a statement cited by several media outlets in April, after the governor sent his letter. "A seven-yearlong effort by New Jersey to fill this gap with offshore wind has failed to deliver any results whatsoever, and consumers are now paying the price for this failure."

In state legislative hearing in March, PJM said demand was increasing largely because of the “proliferation of data centers, but also due to electrification as well as the onshoring of the U.S. manufacturing industry,” according to testimony cited by the New Jersey Business and Industry Association. The grid operator also blamed the state’s energy policies for driving up costs.

“As demand is going up, supply is going down. Supply is coming off the system due primarily to decarbonization policies and some economics,” Asim Haque, PJM's senior vice president of governmental and member services, told legislators.

In an analysis this week, progressive think tank New Jersey Policy Perspective put the blame on "PJM’s delays in approving new energy projects are driving up costs for consumers," and said more than 95% of the pending projects are for clean energy. It blamed PJM for prioritizing fossil fuel projects over energy-efficient alternatives.

How can I lower my costs?

Brian Lipman, director of the state’s Division of Rate Counsel — which advocates for utility consumers — said the best solution is energy efficiency. The state offers and has resources about several programs for upgrading appliances and home infrastructure to be more energy-efficient, including the Community Solar pilot program for participating in solar projects that aren't on your own property, rebates for energy-efficient appliances, rebates and financing for HVAC and water heating, and assistance with weatherization.

“The cheapest electron is the one never used,” Lipman said in a statement.

But unless you’re already working on electrification, that’s not going to help you when rates spike this summer. That might have you turning down the air conditioner and hoping that cracking open the windows gets you through some hot days.

“Anything people can do to safely reduce the amount of energy used is helpful,” Lipman said. “I remind people, however, to be safe and not allow temperatures in their homes to get dangerously high.”

But if your bills are troublingly high, there may also be options for financial assistance.

“As odd as it may sound, the first place to start is with your own utility,” Lipman said. “They have an interest in getting paid and therefore, will be able to help you find the right program for you.”

PSE&G guides customers to several options — such as state-supported payment assistance programs including special options for seniors and disabled adults, and deferred payment applications. There’s also the option of signing up for equal payment plans, which spread out costs into predictable levels over a year instead of hitting customers with higher costs immediately after higher usage.

JCP&L and Rockland Electric have similar breakdowns of assistance and payment programs.

“JCP&L understands the concerns that many New Jersey families are facing due to increasing rates from electric suppliers,” said JCP&L spokesperson Christopher Hoenig. “While it is not JCP&L’s delivery rates that are rising, we include and collect these charges on the monthly electric bills, and we are committed to assisting our customers through this time.”

The state’s guide to the Lifeline Utility Assistance Program describes multiple ways seniors, people with disabilities and others receiving certain medical benefits can qualify for $225 in annual benefits to help pay their utilities. The Universal Service Fund provides monthly credits based on what customers pay for energy, and the Payment Assistance for Gas and Electric program provides assistance to low-to-moderate income households.

And certain households will automatically qualify for a one-time $175 utility bill credit under New Jersey’s Residential Energy Assistance Payment, which the Board of Public Utilities reauthorized for this year in April.

Is anyone doing anything about these rates?

The Murphy administration announced several steps earlier this month — but it’s unlikely you’ll feel any benefits right away.

The Board of Public Utilities asked all four companies to file petitions with proposals for mitigating the cost impacts to customers. The administration asked the utilities to voluntarily expand a program that currently provides shutoffs during the winter so that it also applies July to September — which JCP&L said it had already done.

"It appears that at least one of the utilities will implement the governor's plan, but we have not heard from the others as of yet," Lipman said.

Murphy also urged the companies to suspend reconnection fees up to some time past the summer peak usage months.

“We ask that utilities share the load and commit to being part of the solution to the PJM cost crisis. These utilities have reaped billions in profits over the last 10 years,” Murphy said when he announced those steps.

Other directives are less tangible for now. The governor asked the BPU to evaluate “all available funding and programming to stabilize utility bills” and to speed up opening new solar incentive programs.

He told it to “open a new proceeding on resource adequacy” to explore ways of bringing more generation online, and to lower costs.

Murphy’s response has been criticized by prominent New Jersey Republicans, who’ve broadly opposed the governor’s push for electrification and wind generation throughout his tenure. In a statement this month, state Sen. Anthony M. Bucco described the governor’s steps as doubling down on “on the same failed renewable energy mandates that have driven up costs and weakened grid reliability.”

He also said the assistance programs leave out middle-class families, and that Murphy’s requests would punt higher electric bills until after the coming election season. Murphy is term-limited, and not running for any office this year.

This story has been updated with more information.