Higher electric bills are coming for NJ following energy auction

New Jersey energy customers ailing from high electricity bills received more bad news Tuesday afternoon.

PJM, the region's electrical grid authority, announced the results of this year’s capacity auction, an annual gathering where the energy industry determines what it will cost to keep the lights on for the following year.

This year’s price-per-megawatt day – the amount paid to energy generators per day over the year for every megawatt of energy they’re capable of putting on the grid – landed at $329.17, about a 22% increase from last year.

What this means for consumers: yet another rise in electricity bills next summer.

During a press briefing Tuesday afternoon to announce the auction results, PJM’s Executive Vice President of Market Services and Strategy Stu Bresler said the company would expect the price to translate to an increase of 1.5%–5% in customers’ bills next year.

“It depends on the jurisdiction and the existing rates,” Bresler said. That's why we have a range.”

The news that even higher bills are on the way comes after New Jersey residents' electricity costs spiked 20% in June.

This was due in part to last year’s capacity auction, where the price per megawatt day rose from $28.92 to $269.92 for the PJM region, which includes New Jersey, 13 other states and Washington, D.C. The company said it serves 67 million people in total.

Tuesday’s price was the maximum level allowed under a cap that PJM agreed to last year as part of a settlement in a lawsuit brought by Pennsylvania Gov. Josh Shapiro, who said the company had initially sought a maximum of $500 per megawatt day.

Bresler said Tuesday’s clearing price would have been substantially higher – at $388.57 – if the cap hadn’t been in place.

PJM was already under pressure from state officials due to the spike last year. During a tense March hearing, company executives told NJ lawmakers that the drastic jump was largely due to future demand for energy outstripping supply.

In April, New Jersey Gov. Phil Murphy sent a letter to the Federal Energy Regulatory Commission accusing PJM of market manipulation in how it runs its capacity auction.

Murphy also signed onto a letter last week with nine other governors, calling for two newly vacant PJM board seats to be filled by candidates that they choose.