New Jersey — A proposal to cap electricity supply prices for New Jersey and other states has been introduced by PJM Interconnection, the operator of the regional electricity grid. This plan aims to save consumers approximately $21 billion over the next two years by setting both a price cap and floor for PJM’s annual electricity auctions. The proposal comes as New Jersey faces a 17% increase in the supply portion of electricity bills, which will take effect on June 1.
The proposal seeks to prevent similar rate hikes in the future and was spurred by a complaint from several state governors to the Federal Energy Regulatory Commission (FERC) after last year’s price increase. Under the proposal, PJM would set a $325 per megawatt-day price cap and a $175 per megawatt-day price floor for the 2026/27 and 2027/28 auctions. However, the proposal has encountered opposition from LS Power Development, a power generator involved in the auctions, which has challenged the price cap in a filing to FERC. The cap is not expected to affect the planned 17% increase in June. New Jersey Rate Counsel has also criticized the price floor, arguing that it is higher than the average of past auctions. FERC has yet to decide whether to approve the proposal. In the meantime, the state faces additional potential hikes in distribution rates and continues to see supply struggles amid growing demand.
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