New Jersey’s Annual Electricity Supply Auction Indicates Higher Bills for Residential Customers

The New Jersey Board of Public Utilities on Feb. 12 announced the results of the annual electricity auction for Basic Generation Service, indicating higher costs for electricity supplied to most residents and small and/or medium-sized businesses by the state’s four regulated electric distribution companies. The auction results show that the average electric ratepayer could see an increase of over $20.00 per month. The increase is attributed to rising electricity demand along with limited supply growth due to interconnection delays.

The auction results will have a major impact on electricity prices for New Jersey households and businesses from Jun. 1, 2025, to May 31, 2026. With an increase in auction prices for all the electric utilities from the previous year, the average monthly bill is expected to increase by an estimated 17.23 percent to 20.20 percent. The higher prices are attributed to PJM Interconnection LLC’s failure to fix the capacity market and delays in new interconnection supply. PJM operates the grid across 13 states and the District of Columbia.

PJM’s capacity market auction for the 2025/2026 delivery year, held in August 2024, cleared at a record high price of $269.92 per megawatt-day (MW-day), about nine times the clearing price in the prior auction. Last year, New Jersey Governor Phil Murphy joined governors from Pennsylvania, Illinois, Maryland, and Delaware in calling for urgent measures within PJM to curb record-high electricity prices. Following a complaint filed by Pennsylvania Governor Josh Shapiro with the Federal Energy Regulatory Commission against PJM, along with letters from PJM’s founding member governors highlighting flaws in the auction process that risked substantial price hikes, in January, PJM agreed to lower the price cap from $500/MW-day to $325/MW-day, potentially saving consumers $21 billion over two years.

New Jersey’s electric supply auction results comprise two separate descending clock auctions conducted by the National Economic Research Associates for the Commercial and Industrial Energy Price service and Residential Small Commercial Pricing service. Together, the auctions secured commitments for about 7,556 megawatts worth of customer requirements. For the next three years, the energy secured from the latter auction is  sufficient to provide electricity for one-third of the state’s residential and small businesses, starting from June this year. The remaining electricity supply, from June 2025 to June 2026, will come from energy secured in the 2023 and 2024 auctions.