Utilities and experts warn PJM capacity-auction spike will lift summer bills; call for faster interconnection and short‑term relief

At a joint Senate select committee and Assembly Telecommunications and Utilities Committee hearing in Trenton on Friday, executives for New Jersey’s major electric utilities and energy experts told legislators a steep jump in PJM capacity prices will raise residential bills this summer and that long delays in the PJM interconnection queue are preventing lower‑cost clean generation and storage from coming online.

The utilities tied the immediate price shock to recent capacity‑market auction results and to a longer trend of retiring plants and rising demand. “This formerly small percentage of utility bills will now grow significantly and will cause a between 17% to 20% increase, about $25 a month for an average residential customer is our estimate, in the bills our customers will pay,” Public Service Enterprise Group Senior Vice President Rick Thigpen told the committees.

The warning was repeated by other company officials. “That average residential customer will see a total bill impact of approximately $23 per month as a result of supply cost increases,” Philip Vavala, regional president of Atlantic City Electric, said. Theresa Reed, vice president of state finance and regulatory for Jersey Central Power & Light, provided a typical bill example: “Currently, bills are approximately $112.25 a month. They will go up to $134.92. That’s a $22.67 increase for the average typical customer.”

Why it matters: capacity auctions, interconnection backlog, permitting

Committee members and witnesses described two linked problems. First, PJM’s capacity auction cleared at prices far higher than prior auctions after the market operator and its participants confronted a tighter supply/demand balance driven by generation retirements and stronger electricity demand, including large new loads such as data centers. Second, many lower‑cost resources that could supply capacity and lower prices are delayed in PJM’s interconnection queue or held up by statewide siting and permitting barriers.

Advanced Energy United policy director John Gordon testified that PJM “currently has nearly 290 gigawatts of generation and storage projects in that interconnection queue, actively seeking interconnection,” and added that a large share of those projects are clean energy and storage. He told lawmakers many of the projects have been stuck in the queue for years, and that earlier queue closures and process problems kept developers from getting the interconnection agreements they need to finance and build projects.

Gordon and other witnesses said those delays had a direct effect on the recent auction: with more supply online or able to clear the market, capacity prices this year would have been materially lower. A separate analysis cited at the hearing estimated that earlier interconnection and construction of queued projects could have reduced the last auction’s cost by several billions of dollars.

What utilities told the committees

- Public Service Enterprise Group (PSE&G) and its allied unions emphasized the company’s role delivering power and customer outreach. Thigpen said the company has identified roughly 100,000 customers eligible for bill‑assistance programs who are not yet enrolled and is expanding outreach and payment‑plan options. He said PSE&G is coordinating with the Board of Public Utilities (BPU) on short‑term mitigation steps.

- Atlantic City Electric confirmed the average residential supply‑portion increase and described programs such as budget billing and assistance enrollment; the company said it does not set generation prices, which are determined through market auctions and passed through to customers.

- Jersey Central Power & Light (JCP&L) cited state infrastructure initiatives and said its delivery rates are lower than some peers; the company noted the BGS (Basic Generation Service) auction supply change is a principal near‑term driver of the bill increase.

- Rockland Electric (RECO) said it is investing in reliability and in low‑ and moderate‑income clean energy programs and urged faster project approvals so savings from clean resources can reach customers.

Union leaders urged partnership on new supply and construction. Joe Checkley, business manager of IBEW Local 94, said trade crews stand ready to build needed projects and keep the grid operating around the clock.

What experts and advocates recommended

Speakers from Advanced Energy United recommended three near‑ and mid‑range actions: (1) accelerate PJM interconnection reforms and full compliance with FERC’s interconnection order; (2) speed state permitting and siting—especially for large solar and battery projects—and consider a streamlined siting body for contentious projects; and (3) improve forecasting and contractual terms for very large new loads (for example, data centers) so those loads bear the cost of any necessary transmission and do not shift the burden to other customers.

Advanced Energy United’s Jim Purickell emphasized local permitting and community‑level barriers: “The main cause for these project cancellations over the last 5 years… are due to local ordinance or zoning, great interconnection, and or community opposition,” he told the committee, recommending clearer timelines and a streamlined approval pathway.

Short‑term relief discussed at the hearing

Lawmakers pressed utilities for options to blunt near‑term bill shock. Utilities outlined actions they are taking or discussing with regulators and community partners: targeted outreach to enroll eligible customers in the Universal Service Fund and other assistance programs; expanded budget‑billing enrollment; energy‑efficiency campaigns; temporary deferrals or smoothing of the BGS/supply increases if regulators approve; and direct outreach to municipalities and community groups to speed applications for assistance.

Committee requests and follow‑up

Several legislators asked the utilities and the BPU for more public information about PJM committee votes, the utilities’ PJM filings, and a detailed list of announced data‑center commitments and projected megawatts. Utilities agreed to provide further materials to the committee. The companies also signaled willingness to work with the legislature and BPU on financial models to spread or defer immediate rate impacts while longer‑term supply solutions are developed.

What the hearing did not produce

There were no formal decisions or votes taken at the hearing. Committee chairs asked utilities to return with requested documents and urged regulators to weigh short‑term mitigation options; any regulatory deferral or bill‑smoothing proposal would require formal BPU action under state rules.

Why this matters for customers

Witnesses offered multiple numbers to quantify the risk: utilities estimated a 17%–20% retail increase in an average residential customer’s bill tied to the recent auction, about $22–$25 monthly for a typical household; analysts at the hearing cited multi‑billion‑dollar impacts across PJM and noted that faster interconnection of queued clean energy and storage would reduce capacity prices and produce substantial consumer savings over time.

Next steps

Legislators asked for quick follow‑up materials from the utilities (detailed PJM‑committee participation and votes, lists of data‑center and other large‑load commitments, and short‑term mitigation models). Advanced Energy United urged the state and PJM to complete interconnection reforms, step up permitting reforms and siting certainty, and require clearer commercial commitments from very large new customers so new load costs are not borne by other customers.

The committees left the hearing asking utilities and regulators for more documentary follow‑up and signaled plans for further hearings later this spring and summer as the July PJM auction approaches.