Legislative Hearing Highlights PJM’s Failure to Prevent Rising Utility Costs

Hearing comes as Assembly Democrats unveil legislative package to provide immediate relief and create long-term solutions for fair energy pricing and better access to assistance programs

(TRENTON) — PJM’s failure to bring new energy supply online has led to higher utility costs for New Jersey residents, according to testimony today during a joint meeting of the Senate Select Committee and Assembly Telecommunications and Utilities Committee. The hearing was held as Assembly Democrats have introduced legislation to address rising costs and make energy more affordable.

“We must demand that PJM do better,” testified Brian Lipman, Director of the New Jersey Division of Rate Counsel. “Business as usual is not going to work. The time where PJM can place costs and the issue of affordability on the back burner has passed.”

PJM currently has about 1,600 energy projects waiting to be added to the grid, with 96% of those being clean energy projects, including 79 in New Jersey. If even 30% of those projects on the waiting list had been connected to the grid, energy prices at the last auction would have been 63% cheaper.

Abraham Silverman, a research scholar at Johns Hopkins University’s Ralph O’Connor Sustainable Energy Institute and a principal at SilverGreen Energy Consulting, criticized PJM for moving slowly on reforming its interconnection process.

“PJM leadership needs to act more quickly, even in the face of opposition from PJM member companies, to solve issues before they become a crisis for consumers,” testified Silverman. “New Jersey’s existing clean energy programs already demonstrate the power of clean energy investments to put downward pressure on prices.”

Despite the benefits that renewable resources bring, clean energy in New Jersey is under attack. Republican opposition at the state and federal level to wind projects has set back efforts to deliver over 5,000 megawatts of clean energy and create thousands of new jobs in New Jersey.  

“PJM has consistently changed and adopted market-rules in a way that favors fossil fuel generators and transmission operators at the expense of ratepayers and states with significant clean energy generation,” testified New Jersey Board of Public Utilities President Christine Guhl-Sadovy. “Most recently, PJM once again changed the way they model for available capacity which is expected to drive auction prices even higher.”

“The testimony we heard during today’s hearing was informative and marks a productive beginning to what will be an ongoing effort to address rising utility costs,” said Assemblyman Wayne DeAngelo (D-Mercer, Middlesex), Chair of the Assembly Telecommunications and Utilities Committee. “While there is still work to be done, I appreciate the discussion and look forward to continued collaboration to ensure affordable, reliable energy for New Jersey consumers.”

In order to help residents manage higher electricity bills, Assembly Democrats have introduced legislation to increase income thresholds for residents in order to participate in utility bill payment assistance or energy efficiency programs.

Additionally, Democrats have introduced legislation that would rein in the return on equity associated with utility investment and a bill to close a loophole that utility companies exploit to give themselves a bonus on new construction projects.