Legislative Committee on Utility Costs Seeks Answers from PJM on Electric Bill Increases

TRENTON – The special legislative committee investigating the exorbitant increase in utility costs wants more answers and explanations from PJM Interconnection, the regional energy market that manages the distribution of electricity to New Jersey and other states. 

Senator Paul Sarlo and Assemblyman Wayne DeAngelo, the co-chairs of the Joint Committee, followed-up on the panel’s first hearing by sending the attached correspondence to PJM asking for explanations of the practices and decisions that caused the spike in utility bills for residents and businesses.

Senator Sarlo and Assemblyman DeAngelo both said the committee wants a more detailed explanation of the energy auction that sets the rates and PJM’s decision-making process.

“It is apparent that the PJM auction that determines utility rates is fundamentally flawed and needs reforms, said Senator Sarlo, chair of the Senate Select Committee. “One of the more striking failings is a lack of transparency in the decision-making process. We know that the end result is a disastrous spike in utility bills, but we need to know why PJM consistently ignores the interests of ratepayers and operates an energy auction that may be susceptible to manipulation.”

“Following PJM’s testimony before our joint committee last month, we need more information to determine why electricity costs are rising and whether PJM could have taken action to reduce the projected rate increases,” said Assemblyman DeAngelo, chair of the Assembly Telecommunications and Utilities Committee. “We need to learn more about the decisions made by PJM ahead of the latest capacity auction. Additionally, we want more transparency about who writes the rules for how new projects connect to the grid. We demand this accountability for New Jersey’s ratepayers.”

The letter asks for membership lists of PJM committees, subcommittees, and boards as well their business affiliations. It also asks for the bylaws governing their practices and for vote tallies for their decisions.

With the obvious failure to bring new energy supplies online and a “staggering backlog” of applicants attempting to join the grid, the committee wants to know how projects are selected for connection and how the applications are prioritized. 

PJM currently has around 1,600 energy projects stuck in its interconnection queue, 79 of them in New Jersey. If only a portion of these had been connected in a timely manner, the supply would have more than doubled the volume that cleared the last capacity auction, helping to hold down rates.

And, with the announced departure of PJM’s president and CEO, the committee wants to know if a transition plan has been put in place to address the failings and prepare for an improved process. 

“PJM states that a crucial part of its mission is to ‘understand customer needs and deliver valued service to meet those needs in a cost-efficient manner’,” said Senator Sarlo. “The current leadership has failed to meet that objective. New leadership must come forward with a plan to drive down rates and put ratepayers first.”