Recently PJM, the power market and transmission operator for 65 million people in a 13 state region including New Jersey, announced that as a result of its most recent capacity auction electric utility customers are set to pay $14.7 billion for capacity in the 2025-26 delivery year. That’s up from $2.2 billion, or eight times more, than in the last auction. Let me repeat that, eight times more! Imagine the impact that will have on your monthly electric bill. To put that in prospective let’s use a common household necessity. The average cost for a gallon of milk in New Jersey is $3.82. If that cost increased eight fold, the same gallon of milk would cost $26.74. Could you pay nearly $27 for a gallon of milk? Based on PJM’s projections, take a look at your electric bill and prepare to pay a great deal more.
While you may have been told how the utilities and PJM navigate the power purchase market to try to minimize the cost impact, it is still going to cost you lots more. The increase is not tied to inflation, interest rates or the economy, but rather due to the fact that coal and natural gas generation are shutting down too quickly and new wind and solar projects cannot be approved quickly enough and are not coming online in time to meet demand. There’s been a great deal of regulatory push and new quotas established to reach unrealistic zero carbon goals and New Jersey is among the states that have pushed the hardest with unrealistic, costly and non transparent energy master plans.
Affordable Energy for New Jersey (AENJ) has been calling out the New Jersey Board of Public Utilities (BPU) since the Energy Master Plan was first announced for its lack of transparency and unwillingness to listen to the concerns of New Jersey residents to ensure any plans for energy supply include reasonable, cost effective and reliable sources including natural gas. Even as the BPU recalibrates its original objectives because they failed to reach them due to skyrocketing alternative energy project costs or suppliers pulling out, they continue to ignore AENJ’s requests to participate in stake holder meetings. It’s unreasonable to keep us out in the heat on such an important matter. We need a seat at the table.
So I ask you, is PJM’s projection something that can serve as a wakeup call that there is a need for more traditional generation projects to help meet demand or just a harbinger of very expensive things to come?
Ron Morano is Executive Director of Affordable Energy for New Jersey.
