BPU Approves $60 Deferral Credit on Electricity Bills
In another move to lessen the blow of sharply rising electricity prices, the New Jersey Board of Public Utilities on June 18 approved a proposal from Atlantic City Electric that defers to the fall $60 in electricity bill payments due from the high-usage summer months.
The utility will add a deferral credit for $60 for all customers, covering July and August. The deferral credit will have to be repaid interest-free over a defined period of time after the summer season.
According to BPU officials who spoke at the meeting, Atlantic City Electric has gone beyond the summer bill credit. The company will suspend service disconnections for nonpayment for eligible customers from July through September, waive fees for already disconnected customers who are seeking to restore service during that period, and offer longer repayment terms, up to 24 months, for residential customers.
The announcement comes after Gov. Phil Murphy pledged $430 million in state funds to ratepayers to temporarily ease the burden of the soaring rates. The state funding comes in the form of a nonrepayable grant to ratepayers, with $100 for each utility account holder. Murphy said he did not yet have the details, but that the funds are likely to be distributed in September.
The moves are the result of a scramble among state officials and utilities to deal with the impact of electricity power capacity auctions that have driven up supply costs of power as much as ninefold in the one year between auctions. On June 1 new supply rates for Atlantic City Electric customers rose more than 17% since rates last increased in June 2024.
Ratepayers will see some relief from the combined effect of the state and utility funding of summer credits, but the new, higher rates for power will still be in effect when the short-term relief funding ends.
BPU Commissioner Zenon Christodoulou said before the vote that this action to provide temporary relief only makes sense if officials use the intervening months to educate the public to “help themselves” by using less power. He saw little that was going to result in lower rates in the short term and felt customers must learn to use less electricity if they want to reduce their bills.
Democrats and Republicans have very different narratives for how the state got to this point. They do appear to agree that New Jersey needs more electricity generation. Solutions to increase supply and possibly lower rates by doing so will take time to implement. Meanwhile, the state, barring some other intermediate plan, will continue to experience high rates for supply.
The supply rate increases come from power generators, utilities that produce electricity but do not distribute it to end users. The prices are set by electricity power capacity auctions held for this area of the country by the grid operator PJM Interconnection, which manages a 13-state area that includes New Jersey. Atlantic City Electric is not a power generator, it only distributes power to customers and has no control over the supply price that is included in its monthly bill as a pass-through for the power generators.
New Jersey Republicans blame Murphy’s energy plan for the soaring prices, saying he and the Democratic Legislature allowed the decommissioning of coal and nuclear plants before clean energy alternative supply was available to match what was being lost. They are especially critical of the state’s investment in offshore wind power, which has failed to produce the supply expected.
Democrats argue that Republicans and others in the state damaged the ability of wind farm developers to construct their turbines, leaving the state short of needed power. They also blame PJM, which they say has delayed the connection of significant numbers of power generators, many of which provide it through solar arrays.
On June 13 Jeff Shields, a spokesperson for PJM, said in an op-ed piece in NJ Spotlight News that prices are rising because of a clear imbalance between electricity supply and demand. He said that “for more than two years, PJM has been warning of the supply and demand conditions that would lead to these increases” in price.
PJM also rejects the numbers being used to criticize the grid operator for delays in bringing new power to the grid, calling those cited by many New Jersey legislators “wildly and willingly wrong.” Shields points to 46 gigawatts worth of projects that have cleared PJM’s interconnection process and are free to build and plug into the grid. He also cites the many renewable projects that are currently having land use issues and permit problems “that have nothing to do with PJM.”