Lawmakers Grill Utilities After PJM Capacity Auction, Seek Short-term Bill Relief and Faster Interconnections

Legislators convened a joint Senate and Assembly hearing in Trenton to question utility executives, union leaders and energy industry advocates about this summer’s projected electric bill increases tied to higher PJM capacity market prices and the slow pace of interconnection for new generation.

The hearing focused on the results of the recent PJM capacity auction, which speakers said combined with retirements and rising demand to push wholesale capacity prices and the supply portion of customer bills sharply higher. "This auction is run by PJM, and they are designed to maintain reliability at the lowest possible cost," said Rick Thigpen, senior vice president for Corporate Citizenship at Public Service Enterprise Group (PSE&G). He and other utility executives stressed they do not set PJM auction prices and urged cooperation on policy solutions.

Why it matters: Committee members warned that higher summer bills could cause immediate financial strain for low‑ and middle‑income households, and they pressed for short‑term actions the state and utilities could take now (billing smoothing, expanded outreach to assistance programs) while pursuing longer‑term fixes (new in‑state generation, faster queue processing, transmission upgrades).

What utilities said: Phil Vavala, regional president of Atlantic City Electric, and Theresa Reed, vice president of state finance and regulatory affairs for Jersey Central Power & Light (JCP&L), outlined the two main bill components: supply (wholesale generation and capacity) and delivery (distribution and transmission). Vavala said Atlantic City Electric "does not generate, set the price for electricity, nor determine the supply portion of a customer's bill." Reed told lawmakers the Basic Generation Service auction and the PJM capacity results are driving a roughly 20% supply increase for a typical JCP&L residential bill.

Union and worker perspective: Joe Checkley, business manager for IBEW Local 94, echoed utility leaders’ emphasis on reliability and said unions are prepared to build needed infrastructure: "Give us the tools, and we can build what this state needs." Union representatives framed workforce safety and the local economic benefits of utility investments as part of the conversation.

Technical and market diagnosis: John Gordon of Advanced Energy United summarized the market mechanics behind the spike: a multi‑year decline in capacity offered into PJM, retirements of older plants, a rebound in demand (including large new data center loads) and a backlog in PJM’s interconnection queue. Gordon said PJM currently has hundreds of gigawatts of generation and storage projects seeking interconnection but that many are delayed by the queue and by subsequent permitting, financing and supply‑chain steps. "If resources currently stuck in the queue were online, prices in the last capacity auction could have been billions lower," he testified.

Short‑term measures discussed: Committee chairs and members pressed utilities to support immediate mitigation steps. Utilities agreed to work with the Board of Public Utilities (BPU) and the Legislature on options that had been floated, including temporary deferral or smoothing of the summer rate increase, expanded enrollment in assistance programs, and targeted outreach to customers identified as eligible for the Universal Service Fund.

Longer‑term options: Witnesses and legislators repeatedly returned to three structural fixes—(1) faster, more transparent interconnection and queue reform at PJM and compliance with FERC Order 2023; (2) state actions to procure or incent in‑state firm generation (policy choices include regulated procurement, targeted incentives for new capacity, or a hybrid approach); and (3) targeted transmission and grid investments, including so‑called grid‑enhancing technologies, to increase carrying capacity without building lengthy new right‑of‑way lines.

Numbers and clarifications on the record: Utilities and witnesses supplied estimates during testimony: PSE&G said its estimate of customer impact this summer is roughly a 17–20% bill increase (about $25 per month for an average residential customer), PSE&G reported it serves about 2.4 million electric customers in New Jersey and has about 180,000 participants in the Universal Service Fund program, Atlantic City Electric reported roughly $23 per month average increase for its customers derived from combined supply and auction effects, and proponents testified that thousands of megawatts of projects are in PJM’s queue but not yet online.

What the committee asked the utilities to provide: Committee members asked utilities to provide, through committee staff, (a) documentation of their participation and votes in PJM stakeholder processes and committees, (b) lists and status updates for interconnection requests affecting New Jersey, and (c) analysis and examples of short‑term billing smoothing or deferral models the utilities could adopt in cooperation with the BPU.

Bottom line: Lawmakers left the hearing with no immediate rate change but with a clear expectation that utilities, the BPU and state policymakers must deliver a plan that combines immediate consumer relief with measurable steps to accelerate interconnection and add reliable capacity. Advanced Energy United and other witnesses urged faster queue reform and state actions to make projects shovel‑ready so supply can come online within the next several years rather than a decade.

Looking ahead: The committee said it plans follow‑up hearings and requested documentation and proposals from utilities and from PJM and federal regulators. Several legislators called for revisiting elements of the state's Energy Master Plan and for a short‑term legislative package to allow budgetary smoothing and protect the most vulnerable ratepayers this summer.