Topic Category: Climate

Why Are New Jersey’s Electricity Bills Going Up, and What Does PJM Have to Do With It?

Posted on by Alex Ambrose

Energy powers our everyday life, from keeping homes warm in the winter to keeping food safe and allowing kids to study at home. But in New Jersey, electricity costs are 20 percent higher than the national average, which means low-income families often have to choose between basic needs like groceries or keeping the lights on. The most cost-effective way to keep energy affordable is by expanding clean, reliable energy sources, such as solar and wind, paired with battery storage.

PJM — the grid operator named for its original member states: Pennsylvania, “Jersey,” and Maryland — manages the power grid for New Jersey and 12 other states and Washington, D.C. But PJM is stalling the transition to clean energy by delaying the connection of new renewable projects and failing to adequately plan for growing demand. These delays are contributing to rising electricity prices. As a result, starting in June 2025, New Jersey households will see their utility bills increase by more than $20 per month.

This explainer provides an overview of PJM’s role in New Jersey’s energy system, why energy prices are rising, and how key policy options and a faster transition to clean energy could protect families from even higher bills.

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    What is PJM?

    PJM is the Regional Transmission Organization (RTO) responsible for managing the power grid and electricity markets in 12 states and Washington, D.C.[1] PJM provides electricity to approximately 67 million people across the region and is the nation’s largest RTO.[2]

    As a private entity overseen by federal regulators, PJM has significant authority over the state’s electricity system, yet operates with limited transparency. Its decisions influence:

    • How much residents pay for electricity,
    • Which energy sources supply residents’ access to power, and
    • How and when new energy projects connect to the electric grid.

     

    How is PJM Different from Utility Companies?

    In New Jersey, most residents get electricity from one of the four major utility providers: Atlantic City Electric (ACE), Jersey Central Power & Light (JCP&L), Public Service Electric & Gas (PSE&G), or Rockland Electric Company (RECO).

    Unlike these companies, PJM is not a consumer-facing utility company. Instead, PJM operates at the regional level, overseeing the generation and transmission of electricity across multiple states. Generation refers to how electricity is produced from sources like solar or wind farms, natural gas, or coal plants. Transmission refers to how that electricity travels long distances from where it’s generated to local utility systems. PJM manages the energy markets and plans and approves new energy infrastructure.

    By contrast, utility companies are responsible for distributing energy to homes and businesses. They maintain local infrastructure, like wires and poles, and they handle billing and customer service. Basically, PJM handles the big picture grid and wholesale electricity markets, while your utility company delivers the power to your door.

    If you look at your electric bill, you’ll usually see two main charges: supply and distribution.

    • Supply charges reflect the costs of the electricity itself, which is set through PJM’s competitive markets. These processes are regulated by the Federal Energy Regulatory Commission, or FERC, an agency within the federal government.
    • Distribution charges are the costs of getting electricity to your home, which are set by the local utility company and regulated by the New Jersey Board of Public Utilities (BPU).

     

    Example Bill from PSE&G, A New Jersey Utility Company

    Starting in June 2025, the supply portion of your bill will increase. This part of your bill is shaped by PJM’s planning decisions and market structure — not by state regulators. 

    What Does PJM Do?

    PJM has three main jobs: transmission planning, managing the energy market, and managing the capacity market, giving PJM significant influence over which energy projects come online, how electricity flows across the region, and ultimately, how much consumers pay.[3]

    1. Transmission Planning:
      PJM oversees the planning and development of the high-voltage transmission system that carries electricity from where it’s generated, like power plants and large solar fields, to where it’s used, like homes and businesses. This includes planning and designing a grid that can reliably meet the region’s energy needs, both now and in the future, and prepare for disruptions, such as extreme weather or equipment failures.
    2. Managing the Energy Market:
      PJM operates a wholesale energy market that balances electricity supply and demand in real time — day by day and hour by hour. Acting as a broker between companies that generate electricity and utility companies, PJM determines which power sources will run and how much electricity they should generate at any given time. The goal is to meet demand at the lowest possible cost while maintaining grid reliability.
    3. Managing the capacity market:
      To plan for future demand, PJM forecasts electricity needs for the region to ensure enough electricity is available during peak usage, such as during summer heat waves. This is done through the capacity market, where electricity suppliers participate in auctions and utilities buy as much electricity as they expect customers will need. This system between PJM, electricity suppliers, and utilities helps maintain a reliable grid by ensuring enough power will be available when it’s needed most and helps avoid price spikes due to shortages.

    Why are Energy Bills Going Up June 2025?

    The increase in energy bills beginning in June 2025 is largely driven by higher prices in PJM’s capacity market. As previously mentioned, the capacity market functions like an auction where utility companies buy energy in advance to meet future demand during peak periods, such as extremely cold or hot days.

    In PJM’s most recent auction in early 2025, prices rose higher than expected due to a surge in projected demand. PJM attributes this increase to two main factors:

    1. Rapid growth in energy use for expected data centers, and
    2. A shortage of new, reliable energy projects being built and connected to the grid.[4]

    According to PJM, data centers alone account for 70 percent of the projected increase in demand.[5] But supply has not kept pace with this unexpected increase in demand. As a result, utilities paid more for future capacity, and those costs are passed on to customers.

    A significant reason for this supply shortfall is PJM’s own delays in connecting new energy projects to the grid. Before a new project, such as a solar or wind farm, can connect to the grid and deliver electricity, it must go through PJM’s interconnection queue. This is a review process that assesses whether the project can be safely added to the grid, but in practice, this has become a major bottleneck. As of March 2025, 143 gigawatts worth of projects — including 79 projects in New Jersey — were awaiting approval in the interconnection queue, enough to power about 115 million homes.[6] For comparison, PJM currently has about 179 gigawatts on the grid as of 2025.[7] In 2022, PJM decided it would not review newer project applications until early 2026, and it’s unlikely that projects currently applying to join the grid will come online before 2030. However, PJM’s recent Resource Reliability Initiative fast-tracked primarily fossil fuel projects, even though over 95 percent of projects awaiting approval are renewable and storage projects, giving gas-powered energy an unfair advantage.[8]

    Other regional grid operators (RTOs), like the Midcontinent Independent System Operator (MISO), engage in long-term, comprehensive planning, grouping infrastructure projects, and evaluating them based on total system benefits.[9] PJM has lagged in its planning and market reforms, leaving the region more vulnerable to price spikes.

    Adding to the challenge is PJM’s governance structure, which gives significant influence to for-profit, utility and fossil fuel companies.[10] Unlike public agencies, PJM operates largely behind closed doors with limited transparency and few opportunities for public input or accountability. This lack of transparency makes it difficult for state governments or consumers to inform decisions that directly affect utility bills.

    According to a recent analysis from Evergreen Collaborative, if PJM continues business-as-usual, New Jersey residents could see their electricity bills increase to over $2,000 a year by 2040.[11] However, if PJM reforms its planning and governance processes, accelerates clean energy connections to the grid, and improves transparency, New Jersey households could see up to $405 in annual savings.[12]

    How Does Clean Energy Affect Rates and Reliability?

    Clean energy, especially solar and wind, helps reduce electricity costs for both utilities and consumers.[13]  These sources are among the cheapest forms of electricity available, in part because they run on free, renewable resources, like sunshine and wind, and they do not require fuel purchases, imports, or costly maintenance associated with fossil fuel systems. When paired with battery storage, clean energy can reliably meet demand even when it’s not sunny or windy.[14]

    States that added clean energy to their grid at the highest rates, like Iowa, New Mexico, Kansas, and Oklahoma, saw the lowest electricity rate increases between 2020 and 2023.[15] Thanks to federal incentives like the Inflation Reduction Act, clean energy will become increasingly cheaper to build and operate over time. In PJM’s interconnection queue, over 95 percent of pending projects are clean energy and energy storage projects.[16] Delays in approving and connecting these projects are directly contributing to higher electricity bills for households and could also hinder states like New Jersey from meeting their clean energy and climate goals.[17]

    In contrast, New Jersey continues to rely heavily on fossil fuel energy sources such as natural gas, which has become increasingly expensive and unreliable.[18] Natural gas plants in New Jersey require out-of-state fuel, need regular maintenance to prevent dangerous gas leaks, and often fail during extreme hot and cold weather — two major periods when customers need electricity the most.[19] For example, during Winter Storm Elliot in 2022, natural gas plants' failures accounted for 70 percent of the forced outages in PJM territory, while wind energy production in MISO territory remained high.[20]

    New Jersey will need more reliable energy sources as the climate crisis continues to drive more extreme weather. Expanding clean energy, like solar and wind paired with battery storage, would provide a large supply of affordable electricity, reducing dependence on aging and unstable fossil fuel infrastructure and improving grid reliability.[21]

    How Can PJM’s Decisions Affect Environmental Justice Communities?

    PJM’s decisions have significant implications for environmental justice (EJ) communities, which are disproportionately burdened by pollution from fossil fuel plants. In fact, a recent study by Applied Economics Clinic found that over half of PJM’s fossil fuel power plants are within one mile of an EJ community.[22]

    These communities — often Black, Latinx, Indigenous, and low-income neighborhoods — have long faced the cumulative impacts of environmental harm, including higher exposure to air pollution, elevated rates of respiratory illness and cancer, and limited access to clean energy solutions. Nationally, Black and Latinx/Hispanic residents are exposed to 56 percent and 63 percent more air pollution, respectively, than they produce.[23]

    While New Jersey’s landmark Environmental Justice law gives the state authority to deny new permits in overburdened areas, PJM’s market structure continues to allow older, uneconomical plants to operate, prolonging pollution and public health risks.

    By accelerating the integration of clean energy sources like solar and wind, PJM can reduce reliance on these aging plants and begin to remedy long-standing environmental inequities.

    What Can be Done to Prevent Even Higher Bills and Improve the Grid?

    With energy bills set to rise by over $20 per month for the average household starting in June 2025, state lawmakers must take immediate and long-term policy actions to protect residents from future price spikes. State lawmakers should prioritize the following:

    Increase Transparency and Public Oversight of PJM:

    State leaders should require PJM to operate with greater transparency and prioritize consumer interests. Governor Josh Shapiro and the Commonwealth of Pennsylvania sued PJM to cap prices and won, saving customers in PJM regions up to $21 billion over the next few years.[24] In New Jersey, the Legislature held hearings to learn more about the cause of these rate hikes, and Governor Murphy called on the organization to take action to lower costs.[25] The New Jersey Division of Rate Counsel joined with Maryland and Delaware to call on FERC to require PJM to re-run the recent auction to reduce costs.[26] Additionally, as of early March 2025, six states plus New Jersey have introduced bills to increase PJM transparency.[27]

    Reduce Energy Demand

    • Invest in Energy Efficiency: New Jersey should expand programs that incentivize the use of energy-efficient appliances, building retrofits, and weatherization projects to lower overall electricity consumption. New Jersey’s offerings include the Comfort Partners program, which reduces eligible residents’ energy bills through better insulation at no cost, rebates for qualifying appliances, and incentives for commercial equipment upgrades.[28]
    • Manage Data Center Growth: PJM cites data center growth as the primary driver of the demand increase. As data centers drive new energy demand, states could explore policy models that require large energy users to directly offset their consumption with new clean energy generation. Models like New Jersey’s proposed "bring your own clean energy" approach, which would require data centers to build and use clean energy sources, or California’s proposed differentiated electricity rates for industrial users may offer paths forward that would ensure industrial users, not households, bear the cost of increased energy demand.[29]


    Increase and Accelerate Energy Supply by Expanding DERs:

    Expand Distributed Energy Resources (DERs) are small-scale projects that provide energy to customers “behind the meter,” or before they interact with the larger grid.[30] Encouraging investments in rooftop solar and battery storage systems can help expand local energy supply, improve reliability, and reduce overall costs without waiting for large grid-scale projects to be approved through PJM. States can remove barriers and create incentive programs to encourage customers to install solar and battery storage on their properties, helping to increase supply while reducing customers' energy bills.

    Strengthen Energy Affordability and Assistance Programs

    • Defend and Expand LIHEAP and State Energy Assistance: Building on existing programs like the Low-Income Home Energy Assistance Program (LIHEAP) can help cushion households from rising energy costs. LIHEAP provides federal funding to states to help low-income households with utility bills and energy-related repairs, and New Jersey's LIHEAP program can provide up to $1,278 to eligible residents.[31] But the federal government is also considering cutting LIHEAP program funding, leaving states to either step up to fill the shortfall or be forced to cut people from the program. States can also consider complementary programs that provide targeted assistance to low-income populations.
    • Grow Community Solar Programs: Expanding access to community solar programs enables households, especially renters and lower-income families, to benefit from clean energy savings without needing individual installations. New Jersey’s landmark Community Solar program provides a discount on electricity bills.[32] The program allows customers who can’t build their own solar projects to still reap the benefits of clean energy while saving money.
    • Create Consumer Energy Relief Funds: New Jersey can evaluate innovative funding approaches, such as using proceeds from climate programs or penalties from utilities that do not meet clean energy targets, to establish consumer assistance funds. For example, Delaware has proposed creating an energy fund to help consumers whose annual household income is less than 350% of the federal poverty level, or $112,525 for a family of four.[33] Similarly, Maryland has a proposal that would create an “energy hardship credit,” funded by payments from utility companies that don’t meet clean energy targets.[34] Finally, Washington proposed establishing a statewide low-income energy assistance program funded by proceeds from the state’s cap-and-invest auction revenues.[35]
    • Expand Utility Shutoff Protections: New Jersey protects customers from having their utilities shut off during the winter months under the Winter Termination Program.[36] However, that protection is only during the winter months and for people with medical conditions. Expanding shutoff prevention programs to include times of extreme heat will help residents as the climate crisis increases temperatures and threatens public health.[37]

    Conclusion

    PJM must do better — and it can.

    Adding more clean energy to the grid is one of the most effective ways to lower costs for ratepayers and improve grid reliability across the PJM region. However, achieving that goal will require greater transparency in PJM’s decision-making and meaningful reforms to its planning and interconnection processes so that new energy projects can come online faster.

    State lawmakers also have a critical role to play. By advancing policies that promote energy efficiency, strengthen consumer support programs, and manage demand from large energy users like data centers, New Jersey can help build an energy system that is more affordable, resilient, and equitable. With cleaner, more stable sources of power, the state can not only meet its climate goals but also protect residents from rising energy costs and ensure that no community is left behind.

    End Notes

    [1] PJM - At a Glance. PJM Interconnection. Apr. 8, 2025.

    [2] PJM - At a Glance. PJM Interconnection. Apr. 8, 2025.

    [3] PJM 101 Presentation. Consumers for a Better Grid. Jan. 22, 2025.

    [4] 2025 Long-Term Load Forecast Report Predicts Significant Increase in Electricity Demand. PJM Inside  Lines. Jan. 30, 2025.

    [5] Chavin, Sabine, et al.Tackling the PJM Cost Crisis. Evergreen Collaborative. Apr. 15, 2025. p.6.

    [6] Stanel, Jason M. New Jersey Senate Legislative Oversight Committee. Mar. 3, 2025. p.4.; Written Testimony Christine Guhl-Sadovy President, New Jersey Board of Public Utilities Senate Select Committee Assembly Telecommunications and Utilities Committee. Apr. 1, 2025; NJPP Analysis of PJM’s interconnection queue.

    [7] PJM Summer Outlook 2025: Adequate Resources Available for Summer Amid Growing Risk. PJM Inside Lines. May 9, 2025.

    [8]PJM Interconnection, L.L.C., 181 F.E.R.C. ¶ 61,162 at p. 15 (2022); Howland, E. “PJM fast-tracks 11.8 GW, mainly gas, to bolster power supplies.” Utility Dive. May 5, 2025.

    Silverman, Abraham, et al. Outlook for Pending Generation in the PJM Interconnection Queue. May 8, 2025.

    [9]Lang-Ree, C. and McIntire, N. What PJM Can Learn from MISO About Transmission Planning. NRDC. Jan. 9, 2024.

    [10] Transparency and Good Governance. Consumers for a Better Grid.

    [11] Chavin, Sabine, et al.Tackling the PJM Cost Crisis. Evergreen Collaborative. Apr. 15, 2025. p.1.

    [12] Chavin, Sabine, et al.Tackling the PJM Cost Crisis. Evergreen Collaborative. Apr. 15, 2025. p.5.

    [13] Allen, Lauren. Green energy is cheaper than fossil fuels, a new study finds. Jan. 20, 2023.

    [14] Benefits of Energy Storage. American Clean Power.

    [15] Pierpont, Brendan. Clean Energy Isn’t Driving Power Price Spikes. Energy Innovation Policy & Technology LLC. Jul. 2024. p.2.

    [16] Meet the Organization Raising Energy Bills Up to 30 Percent in 13 States. Evergreen Action. Jan. 23, 2025.

    [17] Ammann, Dana. Waiting Game: How the Interconnection Queue Threatens Renewable Development in PJM. NRDC. May 18, 2023.

    [18] New Jersey State Energy Profile. U.S. Energy Information Administration. Accessed Apr. 30, 2025.

    [19] Pennsylvania State Energy Profile. U.S. Energy Information Administration. Accessed Apr. 30, 2025.

    [20] Winter Storm Elliott Event Analysis and Recommendation Report. PJM Interconnection. Jul. 17, 2023. p. 2.

    Overview of Winter Storm Elliott December 23, Maximum Generation Event. MISO. Jan. 17, 2023. p. 11.

    [21] Chang, Rachel. Renewable Energy Is the Key to Building a More Resilient and Reliable Electricity Grid. Center for American Progress.

    [22] Castigliego, J.R., et al. PJM's Capacity Market: Clearing Prices, Power Plants,and Environmental Justice. Oct. 2021. p.i.

    [23] Tessum, C. et al. Inequity in consumption of goods and services adds to racial–ethnic disparities in air pollution exposure. PNAS. Mar. 11, 2019.

    [24] FERC Approves Governor Shapiro’s Settlement with PJM to Prevent Unnecessary Price Hikes and Save Consumers Over $21 Billion on Utility Bills. Commonwealth of Pennsylvania. Apr. 22, 2025

    [25] Public Hearing Before Senate Select and Assembly Telecommunications and Utilities Committees (March 28, 2025) available at https://www.njleg.state.nj.us/archived-media/2024/SSC-meeting-list/media-player?committee=SSC&agendaDate=2025-03-28-10:00:00&agendaType=J&av=A

    Letter from Governor Philip Murphy to Mark Takahashi, Chair of PJM Interconnection (January 17, 2025) available at https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-disclosures/2025/20250121-nj-gov-murphy-letter-re-capacity-market-price-cap.pdf

    [26] Howland, Ethan. FERC should order PJM to rerun last capacity auction: ratepayer advocates. Utility Dive. Apr. 14, 2025.

    [27] States Introduce Legislation to Increase Transparency in PJM Interconnection. National Caucus of Environmental Legislators. Mar. 10, 2025; N.J. A5463 (2025). https://www.njleg.state.nj.us/bill-search/2024/A5463

    [28] Find A Program. New Jersey’s Clean Energy Program.

    [29] N.J. S4143 (2025). https://pub.njleg.state.nj.us/Bills/2024/S4500/4143_I1.PDF

    C.A. SB57 (2025). https://leginfo.legislature.ca.gov/faces/billPdf.xhtml?bill_id=202520260SB57&version=20250SB5796AMD

    [30] Johnson, Tom. Thinking Small Could Alter Power Grid by Integrating Small-Scale Power Systems. NJ Spotlight News. Jul. 11, 2019.

    [31] LIHEAP Benefit Levels for Heating, Cooling, and Crisis: States and Territories. LIHEAP Clearinghouse. Access Apr. 30, 2025.

    [32] For Subscribers - Community Solar. New Jersey’s Clean Energy Program.

    [33] D.E. HB 50 (2025). https://www.legis.delaware.gov/BillDetail/142102.

    2025 Poverty Guidelines: 48 Contiguous States. U.S. Department of Health and Human Services. Accessed Apr. 30, 2025.

    [34] Condon, Christine. Lawmakers toss consumer electric bill refund into grab bag of energy bills. Baltimore Sun. Mar. 26, 2025.

    [35] W.A. HB 1903 (2025). https://app.leg.wa.gov/billsummary?BillNumber=1903&Initiative=False&Year=2025; Washington’s Cap-and-Invest Program. Department of Ecology, State of Washington.

    [36] Winter Termination Program. New Jersey Department of Community Affairs.

    [37] Hu, Akielly. Utilities are shutting off power to a growing number of households. Grist. Mar. 18, 2025.

    Gov. Murphy’s NJ Transit Funding Proposal Would Put Agency Back on Track

    Posted on by Alex Ambrose

    Later today, Governor Murphy will announce the first-ever dedicated source of funding for NJ Transit: A new Corporate Transit Fee of 2.5 percent on corporations with more than $10 million in annual profit. The tax is a scaled-down version of the Corporation Business Tax surcharge on corporations with more than $1 million in annual profit. The new tax is estimated to generate $800 million in annual revenue. Last year, New Jersey Policy Perspective (NJPP) published a report on the benefits of using the corporate surcharge as a dedicated source of funding for NJ Transit, which remains the only transit agency of its kind without dedicated public funding. In response to the new proposal to fund NJ Transit, NJPP releases the following statement.

    Alex Ambrose, Policy Analyst:

    “It’s hard to overstate how big of a deal this is for transit riders and the state as a whole. The governor’s proposal would finally provide stable, dedicated funding to an agency that’s never had it, setting a strong foundation to protect NJ Transit now and in the future. This is exactly the type of thinking needed to get NJ Transit back on track, and it’s long past time that big corporations pay for the infrastructure that helps them generate their record-breaking profits. At the same time, we can’t forget that riders are staring down a potential double-digit fare hike, and the agency is still raiding its capital budget, so there’s a strong argument for bringing back the full corporate surcharge to spare commuters from shouldering that burden.”

    Read NJPP’s report, Getting Back on Track: Fully Fund NJ Transit by Taxing Big Corporations.

    ###

    New Jersey’s Transition to Clean Energy Must Be Equitable

    Posted on by Alex Ambrose

    My name is Alex Ambrose, and I am a policy analyst with New Jersey Policy Perspective.
    Thank you Chairman Smith and members of the committee for your leadership on this issue.

    I want to start by emphasizing that clean must mean clean. Ensuring a strong definition will not only make NJ a national leader in the green economy, but it will also safeguard our environmental justice communities. Black and brown families suffer disproportionately due to our state’s over reliance on dirty energy.

    There’s a concept called energy privilege. The Univ of California found that communities that oppose clean energy tend to be wealthier and whiter communities, while poor communities and communities of color bear the brunt of fossil fuel-based energy generation.

    The transition to clean energy must be equitable—we must ensure that a privileged few do not dictate our energy policy, but that we center the lived experience of our environmental justice community leaders.

    We lift up the amendments specified by ICC and NJEJA on the definition of clean electricity production facilities. This is essential to moving our state forward and achieving true equity in our state.

    We also want to lift up the importance of having strong workforce development and labor provisions. I understand that there is a balance that needs to be struck in how much energy we purchase from out of state and how much needs to be generated in state. We support a provision that maximizes the in-state benefits of clean energy job creation.

    It is essential that the co-benefits of the green economy reach New Jerseyans, especially those in Black and brown communities who have historically been excluded from the benefits of energy generation.

    We appreciate your work on this bill and hope you will take these amendments into consideration to ensure the best possible future for all New Jerseyans. Thank you.

    The Best Response to Congestion Pricing is to Improve and Expand NJ Transit

    Posted on by Alex Ambrose

    Earlier today, Governor Murphy announced a new lawsuit against the Federal Highway Administration for approving New York’s congestion pricing plan for vehicles entering downtown Manhattan. Congestion pricing is meant to decrease the number of cars entering Manhattan and incentivize the use of public transportation. The governor’s announcement comes days after the NJ Transit Board of Directors approved a new annual budget that fails to address an imminent $1 billion shortfall that could result in drastic service cuts and fare hikes. In response to this announcement, New Jersey Policy Perspective (NJPP) releases the following statement.

    Alex Ambrose, Policy Analyst, NJPP:

    “The best way to respond to New York’s congestion pricing plan is to improve and expand our own public transit systems here in New Jersey. Fully funding NJ Transit would be a far better use of taxpayer dollars than suing the federal government for a plan lawmakers have known about for years and did nothing to prepare for. The irony here is that congestion pricing will benefit New Jersey and New York alike by reducing traffic, reducing air pollution, and generating revenue for subways that residents of both states rely on. It’s easy to oppose congestion pricing to score political points, but this sort of lawsuit does nothing for the nine out of ten New Jersey commuters who already rely on mass transit to get to and from work everyday.”

    NJ Transit Needs Dedicated Funding, Not Service Cuts and Fare Hikes

    Posted on by Alex Ambrose

    Tonight, the NJ Transit Board of Directors will vote to adopt the agency’s budget for Fiscal Year 2024. With no source of dedicated funding in the state budget approved last month, the proposed NJ Transit budget continues to raid the Clean Energy Fund and divert capital funds to cover operating expenses. As the agency predicts a nearly $1 billion budget deficit in the coming years, the Murphy administration has signaled that they will prioritize service cuts and fare hikes before they consider additional state funding. In anticipation of tonight’s vote to adopt the budget, and with no movement from state lawmakers to fully fund NJ Transit, New Jersey Policy Perspective (NJPP) releases the following statement.

    Alex Ambrose, Policy Analyst, NJPP:

    “State lawmakers are failing NJ Transit and the millions of residents who rely on the agency’s buses and trains. Without additional funding from the state, riders are looking at steep fare hikes and service cuts that will have them paying more for less frequent and less reliable service.

    “While a post-pandemic budget shortfall is not unique to NJ Transit, it remains the only agency of its size in the country without dedicated funding. It’s not like the money isn’t there. Lawmakers are poised to give the biggest and most profitable corporations a $1 billion tax cut at the end of this year, even though these funds can and should be used to fund NJ Transit. Across the river, New York avoided drastic service cuts by increasing taxes on corporations that benefit from public transit, and there’s no reason New Jersey can’t do the same.”

     

    The Biggest Threat to Whales is the Climate Crisis, Not Offshore Wind

    Posted on by Alex Ambrose

    Today, the Assembly Science, Innovation, and Technology Committee held a hearing on marine mammal deaths along the Atlantic Coast. The hearing follows months of fossil-fuel-funded groups, conservative politicians and media personalities, and celebrities like Snooki claiming, without evidence, that recent whale and marine mammal deaths are a result of offshore wind. In response to the hearing, New Jersey Policy Perspective (NJPP) released the following statement.

    Alex Ambrose, Policy Analyst, NJPP:

    “There is no evidence that anything related to offshore wind is harming whales or other marine mammals. There is, however, extensive evidence that the climate crisis will continue to harm not only whales but every resident of New Jersey, particularly those living near the shore and in communities hit hardest by fossil fuel pollution. New Jersey needs to continue the responsible development of clean energy to add good union jobs in the state and improve the health of our wildlife and our people.”

    # # #

    Stop the Raids: The Clean Energy Fund Should Fund Clean Energy

    Posted on by Alex Ambrose

    The health and safety of every New Jersey resident is threatened by the state’s reliance on fossil fuels to power our homes, businesses, and transportation. Fossil fuels — such as gas, oil, and coal — account for a majority of carbon dioxide and greenhouse gas emissions, with a large percentage generated by energy produced for heat and electricity.[i] Air pollution and environmental toxins disproportionately harm New Jersey’s low–income families and residents of color, who are more likely to live and work closest to sources of pollution.[ii]

    In recent years, state lawmakers and the Murphy administration have set ambitious goals to reduce emissions that will require a transition to alternative energy sources that are clean, affordable, sustainable, and reliable. Renewable sources of energy have many advantages to fossil fuels — they are abundant, increasingly cost-efficient, healthier, and create jobs — but they require investments in new technology and infrastructure. The state’s Clean Energy Fund, which is supported by a surcharge on monthly utility bills, is designed to support these investments in renewable energy, but the fund has been consistently raided by lawmakers to plug holes in the state budget. Since Fiscal Year 2010, lawmakers have raided nearly $2 billion from the fund, hampering the state’s ability to meet its clean energy goals, improve air quality, and mitigate against the worst harms of the climate crisis.[iii]

    New Jersey’s Reliance on Fossil Fuels Threatens Public Health and Safety

    Almost all of the energy consumed and produced in New Jersey comes from nonrenewable sources that pollute the air we breathe and the environment more broadly. In 2020, nearly 95 percent of energy consumed in the state came from nonrenewable sources, with nearly three-quarters of New Jersey families relying on natural gas as their primary heating fuel[iv]. In 2021, 90 percent of New Jersey’s energy production came from nonrenewable sources such as natural gas[v].

    As a result of this overreliance on nonrenewable energy, New Jersey consistently ranks among states with the worst air quality in the nation, and this burden is not shared equally. People of color are significantly more likely to live in a county that received an ‘F’ on the American Lung Association’s most recent air quality report card than white people.[vi][vii] Air pollution cuts life expectancy by more than 2 years, and particulate matter poses a larger threat to human health than cigarettes.[viii]

    Gas- and diesel-powered transportation are the biggest sources of air pollution in New Jersey, and natural gas and oil account for almost all of the state’s energy-related emissions.[ix][x] Natural gas leaks also release air toxins into the atmosphere which are linked to illnesses such as cancer.[xi]

    The burning of fossil fuels and the resulting air pollution come at a severe cost to New Jersey families in regard to both their health and personal finances. In addition to the costs associated with treating illnesses linked to pollution, the prices of nonrenewable energy are on the rise, as exemplified by a recent double-digit rate increase by gas providers serving millions of residents across the state.[xii] A recent report from the New Jersey Board of Public Utilities found that gas energy prices may continue to rise, particularly for low-income families who cannot afford more efficient appliances and heating and cooling systems.[xiii] Investing in 21st century technologies that promote clean energy would not only reduce nonrenewable energy consumption and improve air quality, but also save families money in the short- and long-term.

    The Clean Energy Fund: A Path to Funding New Jersey’s Clean Energy Future

    New Jersey lawmakers recognize the threats associated with fossil fuels and the importance of transitioning to a clean energy economy. Since 2018, state lawmakers and the Murphy administration have set the following clean energy goals:

    • 50 percent of energy consumed must come from renewable energy sources by 2030,[xiv] and 100 percent of energy consumed must come from clean energy by 2050[xv]
    • 80 percent reduction in greenhouse gas emissions by 2050 (compared to 2006 levels)[xvi]
    • 100 percent of new NJ Transit bus purchases are electric by 2032[xvii]
    • 100 percent of state-owned light-duty vehicle (i.e. passenger car) sales are electric by 2032[xviii]
    • 11,000 MW of offshore wind production by 2040[xix]
    • 2,000 MW of energy storage by 2030[xx]

     

    Meeting these clean energy targets will not happen on their own, however; they will require the right policies and funding mechanisms to steward the transition to a clean energy economy.

    The Clean Energy Fund is New Jersey’s primary mechanism for financing clean energy investments and incentivizing the use of clean energy through the state’s Clean Energy Program. Established in 1999, the fund is supported by the Societal Benefits Charge on residential and commercial energy bills, which is set by the Board of Public Utilities and funds numerous social and clean energy programs.[xxi] In 2021, the fund collected more than $380 million in revenue to invest in clean energy, with the average customer paying less than $65 annually on their household electricity bill, and less than $63 annually on their gas bill, into the Societal Benefits Charge. [xxii][xxiii]

    The Clean Energy Program primarily funds two types of investments: energy efficiency measures and renewable energy infrastructure. The energy efficiency measures provide funding for businesses and homeowners to retrofit existing buildings for clean energy technology and purchase more energy-efficient appliances. Investments in renewable energy infrastructure include support for solar technology, development of an offshore wind industry, creation of energy storage, and more.

    The Clean Energy Fund is not as effective as it should be, however, as it has been raided for years by Republican and Democratic administrations alike. Since Fiscal Year 2010, lawmakers have raided the Clean Energy Fund to plug budget holes and finance line items unrelated to clean energy, such as state park maintenance and utility bills for state buildings. In total, lawmakers have raided $1.98 billion (in 2022 dollars) from the Clean Energy Fund.[xxiv] The diversions include $242 million under Governor Corzine, more than $1.2 billion under Governor Christie, and more than $533 million under Governor Murphy.[xxv]

    While the Clean Energy Fund has been used to plug various budget holes over the years, the largest percentage of funds were diverted to NJ Transit operations. Public transportation is essential to a thriving New Jersey and deserves to be fully funded, but not at the expense of much-needed investments in clean energy. Ideally, NJ Transit would be funded through the state budget or a new, dedicated source of revenue, and the Clean Energy Fund would be used for its intended purpose. Lawmakers should not be robbing Peter to pay Paul.

    In the FY 2023 budget, new language was added that states the Clean Energy Fund raids directed to NJ Transit can be used to pay for bus electrification and other clean energy projects.[xxvi] However, there is no mandate or guarantee that the funds will be used for those purposes. Since the funding is directed to NJ Transit operations, not capital projects, it is unlikely it will be invested in clean energy projects as the new budget language suggests. Until these raids end, New Jersey will continue to shortchange and delay its transition to a clean energy future.

    End the Raids, Invest in New Jersey’s Future

    There is no shortage of opportunities to use the Clean Energy Fund for its intended purpose, from electrifying NJ Transit’s bus fleet, to assisting low-income families with purchasing new energy efficient appliances and heating systems, to developing clean energy infrastructure. Investing in clean energy projects will reduce air pollution across the state, make energy more affordable for families, and create good-paying jobs in the burgeoning green energy economy. State lawmakers have already set admirable goals for the state’s clean energy future, now it’s time to stop raiding the Clean Energy Fund to make these goals a reality.

    End Notes

    Note:
    In the context of this report, clean energy means any energy that does not produce greenhouse gas emissions. Renewable energy means any energy that uses a source like sunlight or wind that cannot be consumed or depleted.

    [i]New Jersey Department of Environmental Protection, New Jersey Greenhouse Gas Inventory, December 2022. https://dep.nj.gov/wp-content/uploads/ghg/2022-ghg-inventory-mcu_final.pdf pages 3-4

    [ii] American Lung Association, Disparities in the Impact of Air Pollution, 2022. https://www.lung.org/clean-air/outdoors/who-is-at-risk/disparities

    [iii]Reported in 2022 dollars. NJPP Analysis of FY2010-FY2023 Appropriations Acts.

    [iv]New Jersey State Profile and Energy Estimates, 2020. U.S. Energy Information Administration. https://www.eia.gov/state/?sid=NJ#tabs-1

    [v]New Jersey State Profile and Energy Estimates. U.S. Energy Information Administration. https://www.eia.gov/state/?sid=NJ

    [vi]American Lung Association, State of the Air Report Card Key Findings, 2022. https://www.lung.org/research/sota/key-findings

    [vii]NJ Spotlight News, Air quality worse for communities of color, 2022. https://www.njspotlightnews.org/2022/04/air-pollution-ozone-particle-pollution-communities-of-color-american-lung-association/

    [viii]Air Quality Life Index, Pollution Facts. https://aqli.epic.uchicago.edu/pollution-facts/

    [ix]New Jersey Department of Environmental Protection, Bureau of Mobile Services. https://dep.nj.gov/stopthesoot/

    [x]U.S. Energy Information Administration, State Energy-Related CO2 Emission Data Tables. https://www.eia.gov/environment/emissions/state/excel/table2.xlsx

    [xi]Environmental Protection Agency, Basic Information about Oil and Natural Gas Air Pollution Standards. https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry/basic-information-about-oil-and-natural-gas

    [xii]NorthJersey.com, NJ heating bills in line for double-digit increases after state OKs big rate hikes, 2022. https://www.northjersey.com/story/news/2022/09/08/nj-natural-gas-bills-approved-hikes-pseg-njng/66934128007/

    [xiii]New Jersey Energy Master Plan Ratepayer Impact Study, August 2022. https://nj.gov/bpu/pdf/reports/2022-08-13%20-%20BPU,%20EMP%20Ratepayer%20Impact%20Study%20Report_PUBLIC_Brattle.pdf#page=6

    [xiv]N.J. Stat. Sec. 48:3-87.8. (d)(2) 2022. https://pub.njleg.gov/bills/2018/PL18/17_.HTM

    [xv]Executive Order No. 28, 2018. https://www.nj.gov/infobank/eo/056murphy/pdf/EO-28.pdf

    [xvi]N.J. Stat. Sec. 26:2C-38.2. 2022. https://pub.njleg.state.nj.us/Bills/2018/PL19/197_.PDF

    [xvii]N.J. Stat. Sec. 48:25-3a.(9)(b). 2022. https://pub.njleg.gov/bills/2018/S2500/2252_U2.PDF

    [xviii]N.J. Stat. Sec. 48:25-3a.(8)(b). 2022 https://pub.njleg.gov/bills/2018/S2500/2252_U2.PDF

    [xix]Executive Order No. 307, 2022. https://nj.gov/infobank/eo/056murphy/pdf/EO-307.pdf#page=5

    [xx] N.J. Stat. Sec. 48:3-87.8. 1(d). https://pub.njleg.gov/bills/2018/PL18/17_.HTM

    [xxi]N.J. Stat. Sec. 48:3-60.12a. 2022. https://www.njcleanenergy.com/files/file/23_.pdf

    [xxii]Reported in 2022 dollars. New Jersey Board of Public Utilities Response to Office of Legislative Services Budget Analysis, Fiscal Year 2022. https://pub.njleg.state.nj.us/publications/budget/governors-budget/2023/BPU_Response_2023.pdf#page=7

    [xxiii]Reported in 2022 dollars. NJPP Analysis of New Jersey Board of Public Utilities Response to Office of Legislative Services Budget Analysis, Fiscal Year 2022. https://pub.njleg.state.nj.us/publications/budget/governors-budget/2023/BPU_Response_2023.pdf#page=8

    [xxiv]Reported in 2022 dollars. NJPP Analysis of FY2010-FY2023 Appropriations Acts.

    [xxv] Reported in 2022 dollars. NJPP Analysis of FY2010-FY2023 Appropriations Acts.

    [xxvi]New Jersey Office of Management and Budget, FY 2022 Appropriations Act, 2021. Page 187, lines 44-48. https://www.nj.gov/treasury/omb/publications/23bill/AppropriationsAct.pdf

    New Jersey Must Prepare for the Next Big Storm

    Posted on by Alex Ambrose

    My name is Alex Ambrose, and I’m the Transportation and Climate Policy Analyst with New Jersey Policy Perspective. Thank you Chair Karabinchak, Chair Kennedy, and members of both committees for the opportunity to speak today.

    It is past time the state takes action to secure the safety and wellbeing of our families, small business, and overall economic security. This month, we honor the people who lost their lives in the deadliest storm in NJ history. Not coincidentally, we also just passed the one-year anniversary of the second deadliest storm event, Ida. As someone who comes from a family of first responders, I saw firsthand the danger frontline workers face during these disasters.

    Fortunately, New Jersey is poised to be a leader in storm resiliency.

    First, we need to stabilize our current energy portfolio by reducing emissions, investing heavily in public transportation, elevating New Jersey union jobs in exciting new sectors like offshore wind and solar, and modernizing our grid. This will require a Clean Energy Jobs bill that will add not just jobs, but careers in our state and uphold local standards for craftsmanship.

    Second, we need to end the diversion of Clean Energy Funds started by Governor Christie and continued in this administration. Spending the funds as they are intended opens up more funding for projects that create a better and more resilient state.

    Third, we need to give the DEP full authority to regulate flooding on residential properties. As it stands right now, that authority is unclear and would best be affirmed with a legislative fix.

    Finally, we ask you to join us in calling on the Murphy Administration to release the flood zone rules and NJ PACT rules promised nearly three years ago. These rules will ensure new development does not put families and small businesses in harm’s way just so a developer can make a profit. We need more housing in our state, and we need to make sure we don’t repeat our past mistakes and wake up the day after a storm to headlines of people drowning in their own apartment. It is time to stop looking to the past for planning where to build and instead to plan for the future.

    I grew up in a house that was built in a 500-year flood zone. One of my earliest memories is my father carrying my family through the waist-deep waters of Hurricane Floyd. We were fortunate enough to make it to my grandparents’ house nearby before we faced imminent peril. There are too many New Jersey residents who have not been so fortunate.

    For too long, our state has been exploited by corporations prioritizing profits over people. We deserve a New Jersey that values people over polluters. After Sandy, the motto said, “We are stronger than the storm.” I posit that we are also smarter than these storms. It is not a matter of if the next storm comes–it’s when. Let’s be proactive now and plan for that future. Thank you.

    Offshore Wind Benefits New Jersey in More Ways Than Meeting Climate Goals

    Posted on by Alex Ambrose

    My name is Alex Ambrose and I’m a policy analyst with New Jersey Policy Perspective. Thank you for the opportunity to speak today.

    New Jersey Policy Perspective fully supports Ocean Wind 1 moving forward as quickly as is feasible and safe. We need clean energy to mitigate the worst effects of climate change, and without offshore wind, we will not be able to meet those clean energy goals. There is no doubt that climate change is one of the biggest known threats to our wildlife and our environment, and we are already seeing those effects on our oceans with sea level rise and ocean acidification. New Jersey is uniquely situated to not only be on the front line of the worst effects of sea level rise; we are also on the verge of becoming a national leader in offshore wind.

    The offshore wind sector is the biggest job creator in the US’s energy economy, and is one of the best ways we have to meet our climate goals while keeping good-paying jobs in New Jersey.

    There is no doubt climate change has already caused irreversible effects to New Jersey’s people and environment, and clean energy projects such as this are one of the best ways to mitigate those effects. Every day we delay these projects, we are letting the real threat to wildlife–climate change–take more than the already 3 billion birds that have disappeared and endanger more than the 1 million species of plants and animals threatened due to a rapidly changing environment.

    Offshore wind sits at the intersection of protecting our shore tourism, preserving wildlife, creating local jobs, improving public health, and addressing long-standing inequities for overburdened communities. I look forward to seeing this project move forward with the environmental guardrails outlined in the proposal to ensure the net benefits are maximized for this essential clean energy resource. Thank you.