Squeezing the ballon: Bedminster official blames state policies for electric bill hikes
BEDMINSTER TWP. - A looming jump in electric bills is not the fault of the utility but rather a result of state policies that have skewed supply and demand, a local official asserted at the Township Committee meeting on Tuesday, Feb. 18.
"By not adopting a balanced approach to the state energy policy where both traditional and renewable sources of energy play a role, the governor and the BPU (state Board of Public Utilities) have condemned New Jersey residents to pay more for energy now and in the years to come," said Committeeman R. Colin Hickey.
The BPU announced on Wednesday, Feb. 12, that as a result of the state's annual electricity auction for Basic Generation Service, consumers across New Jersey will receive rate increases ranging from 17 to 20 percent effective June 1.
The rates will vary among the four providers in the state — Jersey Central Power & Light (JCP&L) — which serves the five towns in the Somerset Hills, PSE&G, Atlantic City Electric, and Rockland Electric Company.
The average consumer is expected to pay at least an extra $20 per month for electricity.
Hickey, who is the committee's liaison for utilities, said JCP&L customers will receive an estimated annual rate increase of 20.2 percent.
"Believe it or not, this is not, not, JCP&L's fault," he said. "They've had a lot of faults, but this is not one of them."
Hickey went on to explain that JCP&L does not generate power, nor does it own power plants, so it purchases energy from PJM, a regional energy wholesaler serving 13 states and the District of Columbia that signs agreements with companies that own the power plants and generate electrical power.
The energy market responds to supply and demand, with PJM buying capacity for both short-term and long-term energy needs, he noted.
"Here in New Jersey, in my opinion, state policy has constrained supply by limiting traditional sources of energy like nuclear and natural gas in favor of renewable energy sources like solar and wind," he said. "Right now, 91 percent of the electricity in New Jersey comes from nuclear and natural gas, 7 percent from solar and 2 percent from other sources including wind.
"The state has enacted policies prohibiting the extension of natural gas pipelines, making traditional plant construction unfeasible," Hickey said. "Instead, they have poured millions into the construction of off-shore wind farms which are heavily subsidized because the economics don't pencil out.
"As we just saw on the New Jersey shore, that program collapsed under its own economic weight," he continued. "By adopting a renewables or bust approach, the state has severely limited new sources of supply.
'Ginned Up'
"Meanwhile, state policies have ginned up demand," he said. "Remember, we have a state mandate that all new cars must be electric by 2035. The state's energy master plan proposes that all new appliances and furnaces can't be powered by natural gas — they must be electric.
"And the state's affordable housing mandates will likely result in the construction of over 200,000 housing units over the next decade," Hickey said. "And, by the way, electric demand is already surging as more data centers, powered by artificial intelligence, are coming online.
"I just read an estimate last week that, by 2028, roughly 10 percent of all the electricity generated will be used by data centers alone.
"Folks, you can not squeeze a balloon on all sides and expect it not to pop," he said. "Policy drives supply and demand and ultimately, prices."
Aside from Gov. Phil Murphy and the BPU, there "is plenty of blame to go around and certainly PGM shoulders some of the responsibility" but "we all pay for these unfunded mandates," Hickey said. "Folks, the buck stops here and unfortunately now it's worth only 80 cents when it comes to paying the electric bill."
Mayor Larry Jacobs observed that he saw "some media posts going after JCP&L" and yet all four electric utilities in New Jersey will be raising their rates.
"Certainly, this Township Committee, we endorse going after JCP&L," he said, alluding to the committee's complaints about power outages. "We have done it ourselves multiple times and we will continue to do so, but there seems to be some conflating of the issue on this bulk energy purchase - a lot of finger-pointing at JCP&L.
"But this issue ... is separate and apart from the transmission to your home," the mayor said.
Editor's note: This article originally appeared in The Bernardsville News.