New Jersey residents and businesses already reeling from a 20% surge in electricity costs that began in June should start bracing for potentially even higher bills in 2026.
PJM, the regional power grid operator, announced results from its latest capacity auction on Tuesday, revealing that electricity rates for consumers across the state could rise between 1.5% and 5% next year. The annual auction determines the amount of power generation required and establishes wholesale pricing for electricity distribution.
“Consumers could expect an increase of 1.5%–5% in customers’ bills next year,” said Stu Bresler, PJM Executive Vice President of Market Services and Strategy.
This anticipated hike comes on the heels of a controversial rate increase approved by New Jersey’s Board of Public Utilities (BPU), whose members were appointed by Governor Phil Murphy. Despite this approval, Murphy and state Democrats have targeted PJM, accusing the grid operator of failing to adequately meet rising energy demands.
Facing voter backlash over soaring utility costs, Democratic legislators swiftly criticized PJM following the latest auction results.
Republicans have pointed to energy policies championed by the Murphy administration as the real culprit behind escalating electricity rates.
“Instead of pursuing a balanced, affordable, and reliable energy strategy, Trenton Democrats catered to the far-left wing of their party with unrealistic mandates and politically driven policies that ignore basic energy economics,” Senate Minority Leader Anthony Bucco said. “Now, ratepayers will see no relief for the 2026–2027 delivery year.”
The looming 2026 rate changes come as New Jersey prepares to elect a new governor, potentially reshaping the state’s approach to energy policy. Both gubernatorial nominees—Republican Jack Ciattarelli and Democrat Mikie Sherrill—have openly expressed concerns about rising energy costs.
The incoming governor will have the opportunity to appoint new BPU regulators, potentially influencing future pricing and policies aimed at controlling electricity rates.