Agreement with Utility Co. Protects Residents from Rising Prices

NEW JERSEY – Governor Phil Murphy today welcomed an agreement between Pennsylvania and PJM Interconnection that is set to save electricity consumers $21 billion over two years. The deal comes after months of record electricity price spikes in PJM’s market—spikes that threatened costly bill increases for residents throughout New Jersey and the 13 other states PJM serves.

“I am pleased that PJM did the right thing by finding a path forward that will save consumers billions of dollars on their energy bills,” said Governor Murphy. “New Jersey will continue to advocate for affordability on behalf of consumers and work with our partner states to hold PJM accountable for unconscionable and unnecessary price hikes that hurt families and businesses. This is the beginning of a long road to common sense reforms.”

PJM Electricity Prices on the Rise

PJM, the regional transmission organization tasked with maintaining reliable electricity across a large swath of the Mid-Atlantic and Midwest, has faced historic challenges:

• Slow Introduction of New Generation: Inadequate capacity additions have kept supply tight.
• Skyrocketing Clearing Prices: In July, the most recent PJM capacity auction experienced 10-fold price spikes over the previous year, potentially raising typical monthly household bills by $12-$15.

In October, Governor Murphy—along with governors of Pennsylvania, Illinois, Maryland, and Delaware—called for urgent action to rein in these unprecedented electricity costs. Subsequent complaints filed with the Federal Energy Regulatory Commission (FERC), and direct pressure from state leaders, led PJM to impose a price cap, averting a feared $21 billion ratepayer increase across the PJM region.

“Affordability is always top of mind and we will continue fighting for New Jersey ratepayers,” said NJBPU President Christine Guhl-Sadovy. “PJM needs to improve its market rules and speed up interconnection queue times to alleviate and reduce costs on New Jersey’s ratepayers. While some progress has been made, PJM must do more.”

New Jersey’s Role in Curbing Costs

The State of New Jersey has consistently advocated for policies to moderate utility bills while encouraging clean, reliable in-state power generation. Recently, the Governor stressed the need for swift reforms within PJM’s market structure. The Murphy Administration is pushing for:

1. Alignment of PJM Market and State Policy
   PJM’s electricity market rules and planning should incorporate New Jersey’s policy goals, ensuring resource adequacy is satisfied at fair prices.
2. Faster Project Interconnections
   A backlog of 240 gigawatts of energy projects—predominantly clean energy and battery storage—languishes in PJM’s queue. Streamlining this process can accelerate capacity additions and reduce pressure on prices.
3. Future-Focused Transmission Planning
   PJM must require long-term transmission strategies and define new cost-sharing frameworks consistent with state-driven energy policy.
4. Integration of State Policies into Market Rules
   State public policies, such as renewable mandates and energy storage targets, should factor meaningfully into market constructs, creating a stable resource mix and realistic pricing for the future.

“This appears to be a good step that will likely help reduce the exposure to high electricity prices for New Jersey ratepayers. There is, however, more work to do to ensure that future electric prices are reasonable. We understand that other important market design changes have been proposed and are now before FERC. We encourage FERC to approve additional, structural changes to the PJM markets to ensure fair prices for all New Jersey ratepayers before the next auction,” said Rate Counsel Director Brian Lipman.

Moving Forward

Under PJM’s agreement with Pennsylvania, and thanks to parallel advocacy by the Murphy Administration, millions of residents stand to benefit from stabilized electricity prices. The decision showcases the power of regional cooperation and targeted regulatory reforms to ensure reliable, affordable energy for ratepayers.

Looking ahead, New Jersey's Governor and fellow leadership across PJM jurisdictions will continue pressing for swift, lasting solutions. By fostering in-state generation, accelerating project interconnections, and anchoring PJM’s rules in modern, clean-energy realities, New Jersey and their partnering states aim to secure a more reliable, cost-effective electric grid for all.

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