Electricity capacity prices skyrocketed 900% in latest auction
TRENTON, NJ – Today, New Jersey Assembly Members James Kennedy, Andrea Katz, Robert Karabinchak, and David Bailey released a joint statement on the 900% price increase announced last month by New Jersey’s electric grid operator, PJM. Prices in their annual capacity auction rose over 900 percent from $28.92 per megawatt-day to $269.92. By the end of 2025, New Jersey ratepayers will likely see electricity bill increases of as much as 29 percent.
These prices are driven by the grid operator’s years-long issues in getting more generating resources connected to the grid. At the end of 2023, PJM had 3,309 projects – mostly solar and battery storage – waiting to connect to the grid and provide cheaper power to the region. Developers are forced to wait longer in PJM than any other region in the country. Because of this backlog, new renewable projects cannot even apply to bring power to New Jersey consumers until 2026. Earlier this year, PJM earned a "D-"—the lowest grade nationwide—on a scorecard by Advanced Energy United ranking interconnection processes.
“New Jersey’s economic and clean energy goals are being held hostage by an unelected, unaccountable grid operator that has time and time again demonstrated their incompetence. Electricity prices are going to rise because they can’t do their job and get new, clean power connected to the grid,” said Assemblyman James Kennedy.
“We want to be very clear: prices in the region are going to rise because we somehow have a shortage of energy – while at the same time, every other region in the country is experiencing unprecedented growth in generation from mostly clean and renewable sources. New Jersey doesn’t have an energy problem, we have a mismanagement problem,” said Assemblywoman Andrea Katz.
“The current approach is outdated and expensive. If PJM improves the interconnection process, we can unlock the full potential of clean energy and drive down costs at the same time,” said Assemblyman Robert Karabinchak.
“Every day we delay interconnection is a day our constituents keep paying high energy bills and missing out on the benefits of the energy transition. We demand swift action to modernize the grid and bring more clean energy online,” said Assemblyman David Bailey.