ASSEMBLY TELECOMMUNICATIONS AND UTILITIES COMMITTEE

STATEMENT TO

ASSEMBLY JOINT RESOLUTION No. 216

STATE OF NEW JERSEY

DATED:  MAY 5, 2025

      The Assembly Telecommunications and Utilities Committee reports favorably Assembly Joint Resolution No. 216.

      This joint resolution respectfully:  (1) directs the Board of Public Utilities (BPU) to investigate PJM Interconnection, L.L.C.’s (PJM) Reliability Pricing Model; and (2) directs the State of New Jersey to collaborate with neighboring states to promote affordable energy practices and to urge PJM to implement market reforms and expeditiously review new electricity generation applications.

      PJM is the regional transmission organization responsible for coordinating the movement of electricity and ensuring reliable and cost-effective energy distribution in New Jersey, several other states, and the District of Columbia.  One of PJM’s responsibilities is to administer a capacity market to ensure adequate resources exist on the grid to maintain reliability at the lowest possible cost through a competitive auction.  The rising cost of capacity in PJM’s capacity auctions, which contributes to the overall increase in electricity bills for ratepayers, raises concerns about the alignment of capacity prices with the principles of affordability and transparency outlined in New Jersey’s “Electric Discount and Energy Competition Act.”

      In addition, delays in PJM’s interconnection queue have prevented new electric generation resources from becoming operational in a timely manner.  As a result, these new resources, which are needed to maintain reliability at low costs, will be unable to compete in PJM’s capacity auctions in the near future. 

      The BPU has been working to incentivize the development of new generation sources to help meet growing energy demand and thereby prevent increases in energy and capacity prices.  The BPU has also been actively working to protect ratepayers from price increases and coordinating with other PJM states to push for capacity market reforms.  The BPU’s initiatives, led by Governor Murphy, are accompanied by the actions of consumer advocates, who have furthered the region’s efforts to reduce prices through additional complaints at the Federal Energy Regulatory Commission, which the BPU has pledged to support.

MINORITY STATEMENT

By Assemblymen Sauickie, Barranco, and Kanitra

      It is worthwhile to direct the Board of Public Utilities (BPU) to investigate the efficacy of PJM’s Reliability Pricing Model, and to work with other states within the PJM ambit to urge PJM to implement market reforms to protect ratepayers, as this legislation does.

      However, the resolution supports the current ratepayer-hammering policy of unquestioningly prioritizing carbon-free energy over a measured mix of renewable and demonstrably reliable energy sources.  Also, its preamble ambles right up to the line of fiction in its portrayal of the BPU’s efforts to develop new energy generation and protect ratepayers.

      This resolution doubles down on the very policy choices that have been pursued for the past seven years, which have brought the people of this State to their current level of anxiety and outrage over the present and future cost of energy.  As of February 2025, the price of residential electricity is nearly 20 percent higher for New Jerseyans than the national average, and the price of electricity across all sectors is over 27 percent higher.  That is hardly a laudable result for the State’s existing policy of placing an elusive net-zero carbon emissions goal above affordability and reliability at every turn.

      One example of this faulty overall approach is the Renewable Energy Standard, which forces utilities to purchase increasing amounts of expensive renewable energy, regardless of market conditions.  While “clean” energy is an admirable goal, forcing it through government fiat without sufficient infrastructure or competitive pricing mechanisms has placed an undue burden on ratepayers.

      An unrealistic reliance on wind and solar energy, both only intermittent power sources, requires expensive backup generation.  In addition, failed offshore wind projects have cost taxpayers many millions in subsidies and debt while delivering nothing in return.  Meanwhile, ratepayers have been forced to shoulder these costs through escalating utility bills.  The BPU itself has estimated that “clean” energy initiatives have added $1.2 billion in surcharges to utility bills since 2021.

      Furthermore, the average monthly electric bill in New Jersey will increase 17 to 20 percent either as scheduled in June 2025, or sometime later if the BPU succeeds in forcing electric companies to delay the increases past June and perhaps to as late as November.  This committee is acutely aware of that, as it is the reason why the committee has held two joint hearings on the matter within the past few weeks, and why the committee is considering related legislation today.

      The resolution’s preamble says that the BPU “has been working vigorously to incentivize the development of new generation sources to [...] help prevent increases in energy and capacity prices.”  That allegedly vigorous work has resulted in the previously mentioned 17 to 20 percent price increases due to the capacity market auction that the BPU itself certified as aligning with market trends.  With regard to developing new generation, the BPU’s actual record is the loss of about 20 percent of unreplaced generation that has eroded New Jersey’s position from a net exporter of electricity to a net importer.  To be more concise, New Jersey now has to buy energy that it used to sell.

      The BPU’s abject failure in this area is precisely why the committee today will consider legislation to require the BPU to study the feasibility of developing small modular reactors (SMRs) in the State.  Such a study could have been conducted by the BPU of its own accord years ago, which would have positioned the State today much nearer to creating reliable, carbon-free energy sources.

      The resolution goes on to say that “[t]he BPU has been actively working to protect ratepayers from price increases….” Perhaps so, but as ratepayers and this committee are currently contending with the aforementioned enormous rate increases, that work appears unworthy of promotion in this resolution or anywhere.  Furthermore, the President of the BPU has testified to this committee that the board will continue following the very same policies that have brought ratepayers to the point of utter exasperation.

      It bears noting that the dichotomy before this committee today is stark.  On the same agenda with this resolution praising the BPU is legislation carrying the clear implication that BPU members are lacking in appropriate qualifications.  That bill, Assembly Bill No. 5442, would require newly appointed BPU members to have certain experience in energy policy, energy infrastructure, public utility regulation, public utility management or operations, and other specific areas.  It further requires members to complete 12 hours of annual training in one or more subject areas listed in the bill.

      If both this resolution and that bill are approved today, this committee will be simultaneously commending the BPU and sending the message that its members are underqualified for their positions.