Spike in N.J. electric costs was ‘preventable,’ Murphy said. Feds asked to investigate.

New Jersey Gov. Phil Murphy called for a federal investigation Thursday into energy costs, saying sharp hikes set to kick in this summer might be the result of “market manipulation.”

The governor called for an investigation into the regional transmission organization that helps set prices.

The average consumer in New Jersey can expect to see a monthly hike $20 to $25 as a result of an auction held by a regional transmission organization last summer, state officials said. The auction for reliable electricity from generators resulted in total costs of nearly $14.7 billion compared to $2.2 billion the previous year.

Murphy outlined his concerns in a letter to the Federal Energy Regulatory Commission, calling out PJM Interconnection for an auction last summer that is expected to cause energy costs to soar.

PJM Interconnection serves more than 65 million people in New Jersey, Pennsylvania, Maryland, Delaware, Washington, D.C, and nine other states.

“The manufactured PJM cost crisis was foreseeable and preventable,” Murphy said in statement. “Today, I’m urging FERC to take immediate action to investigate the unacceptable outcome of PJM’s 2024 capacity auction, which has resulted in exorbitantly high price increases that PJM will unjustly pass down to everyday New Jerseyans.”

PJM officials pushed back against Murphy’s criticism, saying the state was to blame.

“New Jersey has insufficient generation in-state to meet its needs, and has to make up this difference through imports,” PJM Interconnection said in an emailed statement. “A seven -year long effort by New Jersey to fill this gap with offshore wind has failed to deliver any results whatsoever, and consumers are now paying the price for this failure.”

 It also denied there was market manipulation at the auction

“PJM has not seen evidence that supports a finding of market manipulation in the 2025/26 capacity auction, but we take such allegations very seriously. The Federal Energy Regulatory Commission Office of Enforcement is the right place to address such a concern, and PJM will follow any directives we receive from FERC.”

The auction was held to ensure PJM Interconnection could secure enough electricity from generators to manage supply.

PJM admitted the auction was subject to market manipulation, according to Murphy’s letter.

Federal Energy Regulatory Commission Chairman Mark Christie also defended PJM at Thursday’s FERC meeting.

“I think that a lot of this criticism I have seen in the media, directed at PJM and its management, and blaming them, for everything that’s wrong with the PJM capacity market, I think is in many ways misplaced and lot of it is because of state policies that have sort of come to a head just recently,’ Christie said.

In a March report, the Independent Market Monitor concluded the auction clearing price did not reflect supply and demand fundamentals, resulting in market capacity payments that were approximately twice as high as needed.

Murphy said he wants to make sure New Jerseyans can pay their utility bills.

“I am deeply concerned with how increasing energy bills will affect families and businesses as we head into the summer months,” the governor said. “As the regulator, FERC must ensure that PJM is prioritizing the safe, reliable, cost-effective, and clean delivery of electricity – especially when neglecting this obligation will be at the expense of ratepayers.”

State officials said they continue to invest in solar energy and are offering help to people who can’t afford their utility bills. Customers in need of financial assistance with utility costs can visit the state’s website.

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Jeff Goldman may be reached at jeff_goldman@njadvancemedia.com.