Good morning Chair and members of the committee. Thank you for the opportunity to testify in favor of AJR216, which directs BPU to investigate PJM’s Reliability Pricing Model, directs State to promote affordable energy practices, and urges PJM to implement certain reforms.
Having affordable and reliable energy available for New Jersey residents and businesses is critical, but PJM is hindering our ability to deliver it. The regional RTO is frankly stuck in the past, and has been sitting on its hands while other RTOs are adapting to a changing energy landscape. We also know that PJM tends to overestimate demand load forecasts and did not consider all energy resources in the last capacity auction.[1] This, combined with the shortfall of supply due to its antiquated interconnection process, drives up costs for consumers. Additionally, PJM is giving an unfair advantage to gas power plant proposals, which are increasingly unreliable under extreme weather, instead of diversifying our energy portfolio with new sources of energy, like solar and wind paired with battery storage.[2] They can and should do better, and requiring BPU to investigate these practices is a step in the right direction.
New Jersey’s utility rates are already 20 percent higher than the national average, and these upcoming increases will only exacerbate that.[3] Additionally, LIHEAP, the federal program that helps residents save hundreds of dollars a year on their utility bills, is on the chopping block, putting hundreds of thousands of New Jerseyans at risk of not being able to pay their bills.[4]
These increases in electricity rates are not going anywhere. A recent report from Evergreen Collaborative found that if PJM continues business as usual, our region could see up to 60 percent increases in our utility bills.[5] But if they implement certain reforms, and if states enact policies to increase energy supply, New Jersey ratepayers could see a reduction in their bills, averaging over $400 a year.[6] Additionally, because these reforms would remove barriers to building more clean energy in-state, we will see a net increase of 23,000 jobs annually.[7] Those are good union jobs building and maintaining solar energy, wind energy, battery storage, and its associated infrastructure.
The report also recommends that states consider permitting and siting reform to speed up project development, including establishing deadlines for clean energy and transmission permit consideration. Uncertainty is a project-killer, and the faster we can go from application to interconnection, the less uncertainty there is, and the more new energy resources we can add to our grid. This, combined with PJM reforms, will help drive down costs for customers and build a more resilient grid. Thank you for your consideration.
End Note
[1] Wilson, J.F. What’s With the PJM Load Forecast??. Wilson Energy Economics. Oct. 22, 2024. See figure 3, p. 2.
See PJM’s letter on Reliability Must Run (RMR) resources: https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-disclosures/2024/20240919-pjm-board-response-consumer-advocates-letter-re-urgent-reforms-pjm-capacity-market-re-reliability-must-run-units.ashx
[2] Azhar, A. Clean Energy Industry Questions a New PJM Proposal That Could Move Fossil Fuel Projects to the Front of the Interconnection Queue. Inside Climate News. Dec. 8, 2024.
Gas Malfunction. Union of Concerned Scientists. 2024.
[3] NJPP analysis of U.S. Energy Information Administration data of residential prices.
[4] Chen, P. A LI“HEAP” of Trouble: Slashing Federal Utility Assistance Will Hurt New Jersey Seniors, Families, and Working-Class Households. New Jersey Policy Perspective. (2025).
[5] Chavin, Sabine, et al.Tackling the PJM Cost Crisis. Evergreen Collaborative. Apr. 15, 2025. p.1
[6] Chavin, Sabine, et al.Tackling the PJM Cost Crisis. Evergreen Collaborative. Apr. 15, 2025. p.5.
[7] Chavin, Sabine, et al.Tackling the PJM Cost Crisis. Evergreen Collaborative. Apr. 15, 2025. p.22.
