Soaring Electricity Costs Rock New Jersey Ahead Of Governor’s Race

By Adam Kimball | NJ State House News Service

Utility bills spiked 20% in June, stunning New Jersey consumers and turning the cost of electricity into a critical issue in the race to replace Governor Phil Murphy.

Murphy, a two-term Democrat, made energy a priority, pitching offshore wind power and planning for 100% clean energy by 2035. And he had some success.

Utility costs were moving downward earlier in his tenure. He marked a milestone of five gigawatts of installed solar power in 2024 and secured $156 million in funding from the Environmental Protection Agency’s Solar For All program for low-income households.

But not all has gone to plan for Murphy. 

He has been stymied in his offshore wind efforts, facing community opposition, supply chain issues and skittish private partners, including Ørsted and Shell, which withdrew their support. 

The setbacks dealt a major blow to Murphy’s clean-energy ambitions. The projects were expected to power more than 1 million homes combined and create thousands of union jobs. Without them, the state must find new ways to meet its 2035 goal.

The Trump factor 

Actions by President Donald Trump played a significant role in derailing the Murphy administration’s efforts. On Trump’s first day in office in January 2025 he signed an executive order that paused all new wind permits, approvals and loans.

The president’s denial shows how federal decisions can affect a state’s clean energy goals. Experts say the cancellations slowed the state’s progress on clean and affordable power.

“This significantly drove up our electricity bills because if we had the energy from these projects, we could increase supply and drive down the costs,” said Alex Ambrose, an environmental and transportation policy analyst for New Jersey Policy Perspective.

The two candidates running to replace Murphy in the Nov. 4 election, Republican Jack Ciattarelli and Democrat Mikie Sherrill, agree that electricity prices are too high. About six months after the next governor takes office, prices are expected to rise again as a result of an annual utility rate auction.

Murphy has claimed mismanagement by PJM Interconnection, the multistate wholesaler that manages the power grid, conducts the rate auctions and channels electricity to retailers in New Jersey like PSE&G and JCP&L. In an April letter, he requested an investigation by the Federal Energy Regulatory Commission.

Other states also have issues with the power wholesaler. Maryland recently clashed with PJM over project denials and higher utility costs. Governor Josh Shapiro of Pennsylvania filed a formal complaint to the Federal Energy Regulatory Commission in late 2024. The commission in April approved a settlement that Shapiro’s office said will save consumers $21 billion over three years.

In New Jersey, Ambrose said, “There is no question that PJM is a contributor to our bill increases.” 

“PJM has an interconnection queue setup so that projects can connect to the grid and increase the energy supply,” Ambrose said. “They have mismanaged this queue to the point where projects have waited years to even get approved before being built.”

PJM, in a statement, said it “shares the concern about rising prices caused by this supply-demand imbalance, and we’ve taken multiple steps to mitigate it.”

The wholesaler says it approved energy projects at a record pace to generate about 50,000 megawatts. It added, though, that most  “have not been connecting to the grid quickly enough due to factors outside of PJM’s control, including state permitting, project financing and global supply chain challenges.”

The next governor

The rising cost of electricity is one of the hotly debated policy points of this year’s gubernatorial election. A key difference between Sherrill and Ciattarelli is how each plans to address the issue as governor.

Ciattarelli, in his third attempt at the governor’s office, says he believes in climate change but has criticized Murphy’s clean energy programs.

He favors what he calls an “All of the above” strategy that would see New Jersey relying on a variety of energy sources. He says he supports renewables, but also wants the state to rely more on natural gas as a means to drive down costs and provide time for renewable sources to become more efficient and affordable.

“Air is no cleaner, electricity is only more expensive and ratepayer dollars go to other states,” Ciattarelli said during a gubernatorial debate in September. He would pull New Jersey out of the Regional Greenhouse Gas Initiative, which caps energy plants’ CO2 emissions. The initiative, with 11 Northeastern member states, has recorded a 50 percent carbon emissions drop since the agreement was made in 2009, according to a RGGI fact sheet.

Sherrill, who has represented New Jersey in Congress since 2019, says she would declare a state of emergency on utility bills on her first day in office in order to freeze utility rates and expand clean energy generation. She says she also would take action against PJM Interconnection. 

“If [PJM] are going to continue to mismanage our grid like this, then yes, I’ll explore all options to drive in capacity and drive down costs,” Sherrill said during a campaign stop in Kenilworth.

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Editor’s note: NJ State House News intern Adam Kimball is a Rowan University senior majoring in sports communication and journalism.