Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Capacity Auction topic
No spam. Unsubscribe anytime.
Legislators grill utilities after PJM capacity auction triggers big bill increases
Summary
Lawmakers pressed utility executives at a joint legislative hearing after a PJM capacity auction drove supply costs higher, prompting estimated bill increases (roughly $20–$25/month for typical residential customers) and calls for short‑ and long‑term fixes including rate smoothing, procurement options and interconnection reforms.
A joint Senate select committee and the Assembly Telecommunications and Utilities Committee heard four hours of testimony Friday as lawmakers pressed electric companies to explain why the most recent PJM capacity auction will raise customers’ bills and what can be done to blunt the impact.
“The most recent PGM capacity auction results are the direct cause of this significant price increase coming for utility bills this year,” said Rick Thigpen, senior vice president for corporate citizenship at Public Service Enterprise Group, during opening remarks. Thigpen and other utility officials described a combination of tightened supply, retirements and rising demand — including large data‑center projects — as the main drivers behind the jump in auction clearing prices.
Utility witnesses gave dollar estimates for typical residential bills if current auction results stand. Atlantic City Electric said the average ACE customer will face roughly a $23‑per‑month increase beginning June 1; Jersey Central Power & Light said a typical JCP&L residential bill would rise about $22.67 per month (roughly a 20% increase), figures company witnesses attributed to higher wholesale supply costs passed through to customers.
Lawmakers repeatedly pressed companies to give concrete short‑term relief. Several members urged utilities to join BPU staff proposals to delay rate implementation or to smooth increases over a longer period so households could absorb the cost without immediate hardship. Utilities said they are willing to work with the Legislature and the Board of Public Utilities on “short‑term” smoothing measures and greater outreach to enroll eligible customers in assistance programs.
“We are committed to increasing participation [in assistance programs],” Thigpen said, describing targeted outreach to the roughly 100,000 customers PSE&G has identified as eligible but unenrolled in the Universal Service Fund. Utilities also highlighted programs such as budget billing, arrearage forgiveness and expanded community partnerships to connect customers to available aid.
Several legislators voiced sharp criticism of the market outcome and PJM’s role. “The ratepayer advocate is suing FERC and maybe PJM together…Time for a redo, because your auction was corrupt,” Senator Smith said during the hearing, framing a widespread concern among lawmakers that the auction result was irregular and that consumers were being left to shoulder an unusually large and sudden cost increase.
Utility witnesses resisted calls for a market do‑over on procedural grounds and warned that re‑running the auction could create market uncertainty and unintended consequences for participants who had bid according to the rules. They urged lawmakers to consider a range of policy tools — including state procurement, targeted incentives for in‑state generation and transmission upgrades — rather than a sole focus on re‑running the auction.
Labor representatives and union leaders told the committee that construction and generation jobs are available if policymakers will act. “Give us the tools, and we can build what this state needs,” said Joe Checkley, president and business manager of IBEW Local 94, urging investment in new in‑state generation and transmission.
On governance and transparency, legislators sought records of utility participation in PJM stakeholder votes and the auction process; utilities said they would provide committees with information on committee memberships and votes where appropriate. Panelists also acknowledged the complexity of the issue: supply shortages, interconnection constraints and state policy choices all intersect to shape wholesale outcomes.
The committee ended the hearing with requests for follow‑up documents from utilities and PJM participants: detailed load‑growth forecasts, lists of bidders and voting records on relevant PJM committees, and firm commitments tied to data‑center projects reported in the PJM forecast. Co‑chairs said the legislature will continue to pursue both short‑term consumer protections and longer‑term fixes to resource adequacy and interconnection bottlenecks.
