Listen to this articleFollowing a particularly hot cooling season, New Jerseyans faced a rash of rising utility bills through the summer months. And following concerns and complaints from constituents, lawmakers have turned their attention to the hot-button issue.
Utility companies and stakeholders point to issues out of their control while lawmakers note that customers received bills up to four times higher than is typical during the summer months. Legislators called for hearings and introduced measures to address the issue. Meanwhile, the state has highlighted efforts to provide financial relief to affected customers.
State Sen. John Burzichelli, Assemblywoman Heather Simmons and Assemblyman David Bailey – all 3rd District Democrats – announced plans Sept. 9 to introduce legislation calling on utility companies to adopt a user-friendly energy notification program that alerts consumers of their energy use so they can avoid unexpected and expensive electric and gas bills. The plan, titled “Energy BillWatch,” advanced through a Senate committee earlier in October.
“This would be a proactive, user-friendly program that alerts consumers of their energy use, so they aren’t caught by surprise with exorbitant bills at the end of the month,” said Burzichelli. “It would provide real-time information that allows customers to manage their energy consumption and control costs.”
The bill would require utility companies to directly notify customers by phone, email or text message 10 days into the billing cycle if their energy usage is exceeding their monthly average — and the requirement would apply to electric and gas companies that use smart meters.
“The utility companies should be taking advantage of new technologies in ways that help consumers,” said Simmons. “This plan will provide the information that customers need in ways that are easy to use.”
“The sticker shock of large utility bills at the end of the month can be unaffordable for working families who struggle to manage household finances,” said Bailey. “The early notifications will give them the ability to adjust their usage and prevent surprise bills that break their budgets.”
Placing blame
Republicans at the state and federal level have pushed hard on the issue – blaming the Legislature and the Murphy administration for the high cost.
“Make no mistake, Gov. Murphy’s energy master plan is the driving force behind the absurd surge of utility bills across the state,” said Sen. Joe Pennacchio, R-26th District, who warned in a Sept. 5 statement that without a change in direction soon, rates would soar even higher in 2025. “I am afraid it will only get worse as our grid efficiency falters and our demand for electricity grows.”
As reports surfaced of Atlantic City Electric customers facing steep bill increases, U.S. Rep. Jeff Van Drew, R-2nd District, has dug in on the issue – demanding accountability, calling for a federal investigation, and holding a field hearing in South Jersey to investigate the rising electricity bills.
“We need to ensure big companies cannot take advantage of the system and leave hardworking families paying the price,” Van Drew said Sept. 20.
The field hearing was held Oct. 8.
“These outrageous bills have been crippling for families, and the field hearing we held today on this growing crisis confirmed what we have suspected all along – ACE’s practices demand federal scrutiny,” said Van Drew. “The New Jersey Board of Public Utilities [NJBPU] has failed in its responsibility to act, leaving us no choice but to escalate this to the federal level.”
Warmest summer to date
AC Electric has said it is committed to working with local officials to support customers facing financial hardships. The company noted that this past summer was the warmest to date, combined with changes in rates and the cost of energy, which led to fluctuations in customer bills.
“New Jersey experienced the second hottest June on record, with a nearly 8% temperature increase from June 2023 to June 2024,” AC Electric told NJBIZ in a statement. “It was also determined that residential usage in Atlantic City Electric’s service area for June and July increased 20% compared to last year. Recent studies have revealed that New Jersey residents are using energy more than ever before – causing equipment to work harder. This increased energy demand, coupled with inflation and extreme weather, are contributing factors affecting energy bills. Customers have also experienced a 20% overall rate increase during the last year due to several different factors, including supply, distribution, and seasonal rate increases.”
Back in Trenton, the Assembly Telecommunications and Utilities Committee held a hearing Oct. 2 featuring different stakeholders and lawmakers.
“We do need to do more,” said Committee Chairman Wayne DeAngelo, D-14th District, as the hearing opened. “We are going to have more hearings. We’ve got to diversify our energy generation. I’m a person that does not like to put all my eggs in one basket. We need to discuss offshore wind. We need to discuss doing more with solar. We need to discuss battery storage. We’ll be discussing that as we move forward. We’ve got to be mindful of cold winters. We’ve got to be mindful of when it’s hot in the summer.”
NJBPU president testifies
NJBPU President Christine Guhl-Sadovy testified at the hearing. “I think this is an important opportunity to bring transparency and shed light on some of the issues that we have been talking about,” said Guhl-Sadovy. “But I want to say first, we understand that no one wants to see their electric bill go up. We are committed to ensuring affordability. We have many energy assistance programs as well as energy efficiency programs through the Board of Public Utilities – to help people both afford to pay their bill at times when they do go up, and also to help support reducing their bill. So that in the future, we won’t see as significant an increase.”
She pointed to the Residential Energy Assistance Program, announced in late August, which provides a one-time $175 bill credit to some 278,000 qualifying residential ratepayers.
“I want to shine a little bit of light on what goes into the utility bill,” she continued. “And the main components are generation and distribution. Generation is approximately 60% to 70% of the utility bill. Generation is procured – it is energy as a commodity. And this year, we saw that commodity go up.”
The NJBPU president noted that there is a supply-and-demand delta. “The cost of energy has gone up and that had an impact on bills starting in the beginning of the summer,” she said. “We understand, again, that no one wants to see their bill go up – and we are trying to do what we can to provide assistance when customers need it. But that generation portion of the bill is something that is outside of the control of Board of Public Utilities – done through an auction process. And those costs have gone up. As pointed out, we need more generation. That is an important thing. And I think one of the main takeaways that we probably will all share today is that we do need more generation.”
Leaders from the state’s largest utilities echoed many of those sentiments and cited similar trends. In his testimony, Phil Vavala, vice president of governmental and external affairs, region president, Atlantic City Electric and Delmarva Power, noted that each customer bill is unique.
Also in this issue:
Experts from the NJBPU, NJEDA and Genova Burns join the latest NJBIZ panel discussing New Jersey’s challenges and opportunities regarding energy. Click here to read what they had to say.
“It can vary from energy use to the supplier,” he explained. “Our goal at Atlantic City Electric is to make sure that we’re ensuring customers are well-informed – about the factors affecting their bill. They can better understand their rates and consider all potential ways to save energy and save money. We provide extensive information regarding energy efficiency and assistance programs. And while we communicate to customers about impacts, we heard our customers feedback – that we certainly need to do more and have begun taking steps.”
“One of the things that we focus on consistently is managing our costs prudently. We take these responsibilities extremely seriously,” David Johnson, vice president of customer care and chief customer officer, PSEG. “New Jersey’s rate increase of 2.8% is lower than the national average over the same time frame. Especially when you compare it to those states in the Midwest and along the East Coast. Our rates have even increased lower than the rate of inflation, which we know the CPI [consumer price index] over the last couple of years has been around four percent. And I have to tell you, this doesn’t happen by chance – it happens because of the support and some of the sound decisions you’ve made; some of the sound decisions that the BPU has participated and driven; as well as the fact that at PSEG, we are committed and focused on continuously driving our costs down.”
Ninth District Republicans submitted testimony to the committee concerning what they called the “unconscionable rise in electricity costs.”
“In a state where the cost of living is already prohibitively high, these rate increases are pushing many residents into deeper financial distress, and it is unsustainable,” said Sen. Carmen Amato, along with Assemblymen Brian Rumpf and Gregory Myhre. “This is especially true for senior citizens and individuals living on fixed incomes who comprise a considerable segment of our constituency and are the most vulnerable to these hikes.”
“One takeaway from today’s hearing is that costs will continue to increase as a direct result of these failed Democrat policies,” said Senate Republican Leader Anthony Bucco, R-25th District. “We can effectively address the situation without sacrificing the environment, affordability, and reliability, but New Jersey must change this ill-conceived policy course now to avoid dramatically higher bills for families and businesses.”