Bad news for New Jersey residents: This is the date when your electricity bills will increase

Earlier this month, the New Jersey Board of Public Utilities (NJBPU) warned residents that, as a result of the state’s 24th annual electricity auction, many residents and businesses will see higher energy bills starting June 1, 2025.

The Basic Generation Service (BGS) auction is one-factor that influences electricity prices in the Garden State. Residents and businesses that do not receive electricity from a third-party provider, representing around 18 percent, have their rates set through this auction. Under New Jersey law, purchasing electricity from a third party is not required, and can instead be provided through local electric distribution companies, or EDCs.

“Winning prices for all four EDCs increased compared to last year’s auction, with the average monthly bill projected to rise between 17.23% and 20.20%, depending on the service territory,” the Board reported. These higher prices will last for at least twelve months, with any potential decreases dependent on the results of next year’s auction. In dollar terms, electricity bills for those that form part of the BGS system are expected to rise in the following manner:

PSE&G, one of the state’s EDCs, defends the auction process, stating that it is the “most efficient way” to provide electricity for BGS recipients and offers “the greatest opportunity for electric supply at the lowest cost to consumers.” However, as residents face steep price increases, that claim is becoming harder to accept, as the burden on households grows.

What drove prices up?

Officials cited several factors behind this year’s sharp price increases. Christine Guhl-Sadovy, President of the NJBPU, pointed to “flawed market dynamics in the PJM region” as the “main driver of these increases.” The PJM Interconnection (PJM) is a company that operates the grid delivering electricity to residents in thirteen states, including New Jersey. The Federal Energy Regulatory Commission describes PJM as a “competitive wholesale electricity market” responsible for managing the transmission grid.

Guhl-Sadovy stated that Governor Phil Murphy and his administration would “continue to aggressively push and hold PJM accountable to address rising costs by expediting interconnection and implementing additional market reforms."

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