NJ Confronts ‘Secretive’ PJM As Electricity Costs Skyrocket 22% After Auction

While New Jersey residents were busy planning summer vacations, their electricity bills decided to take a hike of their own. As of June 1, 2025, rates jumped a staggering 20% across the state. Not exactly the summer surprise anyone wanted.

JCP&L customers watched basic service rates climb from 11¢/kWh to over 14¢/kWh. Households now shell out an extra $20+ monthly just to keep the lights on.

JCP&L’s rate spike hits home as basic service jumps from 11¢ to 14¢/kWh, adding $20+ to monthly household expenses.

Businesses? They’re really feeling the pain. A typical commercial operation using 20,000 kWh monthly now faces bills exceeding $2,800. Ouch.

Behind this wallet-draining scenario stands PJM, the regional grid operator whose capacity auction hit record highs. Their auction price reached $329.17/MW-day, brushing against newly implemented price caps. Last year’s price was $269.92/MW-day – already several times higher than previous years. Some regions saw capacity charges increase nearly tenfold.

The culprit? Data centers. These energy-guzzling facilities account for 70% of projected demand growth in PJM territory. They’re sprouting up faster than new power generation can be approved.

Meanwhile, 143 GW of projects sit in PJM’s interconnection queue, waiting for review. Seventy-nine of those are in New Jersey alone.

New Jersey remains particularly vulnerable as a net electricity importer. When supplies tighten, prices surge. Simple economics, painful results.

State officials aren’t taking this sitting down. The NJBPU has labeled PJM a “broken market” while governors from multiple states demanded leadership changes and greater transparency. Their pressure already yielded some results – new price constraints with a $325/MW-day ceiling and $175/MW-day floor were implemented after last year’s 833% auction increase.

For now, consumers foot the bill. Retail customers can expect additional increases of 1.5% to 5% in the next cycle. The NJBPU has responded by approving a $30 credit for residential customers during the hottest summer months.

All while PJM processes drag on and older power plants retire without adequate replacements. The perfect storm for higher bills. Just in time for air conditioning season.

The situation highlights the urgent need for major grid upgrades to accommodate more renewable energy sources that could eventually stabilize prices.

Without significant reforms, projections suggest NJ electricity bills could exceed $2,000 annually by 2040, threatening household budgets across the state.