This is one of a series of articles on the infrastructure challenges that Governor-elect Mikie Sherrill will face.

Rapidly rising electricity rates was one of the main debate points during the 2025 gubernatorial campaign, with governor-elect Sherrill and Jack Ciattarelli offering contrasting views on how they would address this affordability crisis. The primary cause of the energy affordability crisis is electricity supply failing to keep up with growing demand. This fundamental imbalance must be addressed when Sherrill takes office in January, along with many other energy issues vying for her attention.

Supply Versus Demand

• State currently has a shortfall of approximately 6.9 million megawatt-hours (MWh) electricity that it must import from the PJM grid
• The new Energy Master Plan currently shows a 10GW shortage of firm capacity during multi-day winter cold snap
• Electricity demand is expected to rise due to data centers and electrification of transportation (EVs) and buildings
• In-state nuclear generating stations supply over ~40% of in-state electricity but will all be over 40 years old in 2026
• The majority of in-state capacity in the PJM queue is in embattled offshore wind projects
• Grid scale solar deployment constrained by land availability, land costs, and NIMBY fervor
• Grid scale Battery Electric Storage Systems (BESS) will be challenged by costs and NIMBY fervor
• Natural gas deployment constrained by pipeline capacity from Marcellus Shale and NIMBYism

Energy Affordability and Ratepayer Protection

• Utility bills jumped ~20% in summer 2025, driven by PJM capacity auction costs and rising demand from data centers.
• PJM forecasts that rates will continue to rise for the foreseeable future as demand continues to rise at the same time older generating stations are retired
• Businesses report New Jersey is “worse than other states” at controlling energy costs, with 78% of NJBIA survey respondents citing affordability as their top concern.  

Offshore Wind Development

• Offshore wind was central to Murphy’s clean energy plan, with a target of 11 GW by 2040.  
• Projects have faced cancellations and investor withdrawals (Orsted, Shell, Atlantic Shores), leaving the industry “on life support”.  
• Federal permitting uncertainty under Trump slowed progress, though a recent court ruling struck down the moratorium, reopening the path for projects.
• Sherrill must decide whether or not to revive stalled projects

Solar Expansion and Energy Storage

• The 2024 Energy Master Plan mandates 750 MW of new solar annually through 2026, split across rooftop, community, and grid‑scale projects.  
• Community solar programs require 51% of capacity for low‑ and moderate‑income households, guaranteeing bill discounts.  
• Legislation signed in 2025 expanded community solar by 3 GW and set a target of 2 GW of battery storage by 2030.
• Sherrill must oversee rapid deployment while ensuring grid modernization to handle intermittent solar.
• Growing NIMBY sentiment will pose siting challenges and may lengthen timelines and costs

Grid Reliability and PJM Reform

• PJM, the regional grid operator, faces surging demand from AI data centers, projected to add 30 GW by 2030.  
• Watchdogs warn PJM is approving loads it cannot reliably serve, risking blackouts.  
• Governors across PJM states formed a collaborative to demand accountability and prioritize affordability.  
• Sherrill will need to push for reforms in PJM’s interconnection queue, capacity market, and transmission planning.

Climate Resilience and Long‑Term Transition

• New Jersey’s statutory goals: 100% clean electricity by 2035 and 80% GHG reduction by 2050.  
• Rising sea levels and coastal flooding threaten infrastructure, requiring investment in resilient grids and coastal defenses.  
• Balancing electrification (EVs, heat pumps) with reliability and affordability will be a defining challenge.  
• Federal policy uncertainty—rollbacks of clean energy incentives—could undermine state targets.

Governor‑elect Sherrill inherits an energy landscape defined by skyrocketing costs, falling in-state electricity generation, stalled offshore wind, ambitious solar mandates, strained grid reliability, and rising NIMBY sentiment. Her leadership will be tested in balancing affordability with her aggressive clean energy targets.  

Sources

Associated Press. (2025, November 6). *Mikie Sherrill pledges emergency action on NJ energy costs after election win*. AP News. https://apnews.com/article/new-jersey-governor-sherrill-energy-costs-2025

New Jersey Business & Industry Association. (2025, October). *Energy costs top concern for NJ businesses in annual survey*. NJBIA. https://njbia.org/news/energy-costs-top-concern-nj-businesses-2025

New Jersey Board of Public Utilities. (2024, December). *2024 Energy Master Plan update*. NJBPU. https://www.nj.gov/bpu/energy/emp/

NJ Spotlight News. (2025, September 15). *Offshore wind industry in NJ faces setbacks as developers withdraw*. NJ Spotlight News. https://www.njspotlightnews.org/2025/09/offshore-wind-nj-setbacks-developers-withdraw/

U.S. District Court for the District of Columbia. (2025, October 20). *Decision striking down federal offshore wind moratorium*. CourtListener. https://www.courtlistener.com/opinion/2025/offshore-wind-moratorium-decision/

NJ.com. (2025, July 22). *Community solar expansion bill signed, adding 3 GW capacity*. NJ.com. https://www.nj.com/news/2025/07/community-solar-expansion-bill-signed.html

PJM Interconnection. (2025, August). *Data center growth and reliability challenges*. PJM Reports. https://www.pjm.com/library/reports/data-center-growth-reliability-2025

RTO Insider. (2025, September 30). *Governors demand PJM accountability on affordability and reliability*. RTO Insider. https://rtoinsider.com/articles/32545-governors-demand-pjm-accountability-2025