Why Are New Jersey Electric Rates Going Up? (2026)

7 min read • Updated October 2026 • By the CliQ Team — the team that created Blink

Why are New Jersey electric rates going up? Mostly because of the regional power grid. New Jersey buys its electricity through PJM, a grid that serves 13 states, and the price PJM pays power plants to stay available hit record highs as demand from data centers grew faster than new supply. That pushed the average New Jersey electric bill up 17% to 20% in June 2025, between $22 and $28 a month depending on your utility.

The 2026 news is better, but not by much. Rates held roughly flat this June. They did not come back down. Here's what drove the spike, where things stand now, where to get help with a bill, and the one part of it you actually control.

Why New Jersey Electric Rates Jumped

Your electric bill has two big pieces: delivery, which your utility charges to run the wires, and supply, which is the electricity itself. The 2025 spike came from supply.

New Jersey doesn't buy power plant by plant. Every February, the state runs an auction, called the Basic Generation Service auction, to buy a year of electricity for most households. What that electricity costs depends heavily on PJM, the grid operator for New Jersey and 12 other states. Part of every PJM power bill is a "capacity" charge: money paid to power plants to be available on the hottest and coldest days, whether they run or not.

That capacity price exploded. The New Jersey Board of Public Utilities (BPU) pointed to three reasons: demand for electricity rising quickly, new power plants stuck in long waits to connect to the grid, and what it called "flawed market dynamics" in PJM. New Jersey's Rate Counsel noted that PJM's last capacity auction before the increase had cleared at the highest price in its history. Data center growth across the PJM region was a big part of that demand.

Here's what it did to the average residential bill on June 1, 2025, according to the BPU, with this year's change for comparison:

Average residential customer, per NJ BPU. 2026 figures assume 650 kWh a month, before state bill credits.

CBS New York covered the fallout in March. A congressional report put New Jersey's 2025 rate increase near 17%, against a national average of a little over 6%. The segment also shows the blame splitting along party lines. Rep. Frank Pallone points at PJM and federal energy policy. State Sen. Declan O'Scanlon argues New Jersey's own decisions, including closing power plants, made the state more exposed than its neighbors.

Video by CBS New York via YouTube, March 2026. Not affiliated with CliQ.

Both can be true at once. The capacity price is set regionally, so every PJM state felt it. How much it hurt depends on each state's mix of supply, its policies, and how its utilities buy power. For how New Jersey's rates compare nationally, see which states have the highest electricity rates.

Where New Jersey Rates Stand Now

This year's auction, certified in February 2026, came in close to flat. Winning prices actually rose a little, again because of wholesale energy and PJM capacity costs. But a temporary cap on PJM capacity prices kept the increase small, and the table above shows the result: PSE&G and Rockland customers saw small decreases on June 1, while JCP&L and Atlantic City Electric customers saw small increases. NJ Spotlight News had the 70-second version.

Video by NJ Spotlight News via YouTube, February 2026. Not affiliated with CliQ.

The state has also moved on several fronts since January:

• A rate-hike freeze. On her first day in office, Gov. Mikie Sherrill declared a state of emergency on utility costs and directed regulators to offset supply increases starting with June 2026 bills.
• Bill credits. In July, the state announced a $25 credit for all 3.6 million residential electric customers, plus $150 more for lower- and moderate-income households.
• Three new laws, signed July 7. One creates a separate rate class for data centers using 50 megawatts or more, so their grid costs aren't spread across everyone else. One ends a bonus return utilities earned for being part of PJM. One requires state approval before utilities build certain transmission projects whose costs land on bills. The governor's office says its actions this year will save ratepayers more than $1 billion a year, citing an estimate by Synapse Energy Economics.

Gas is steady too. If you heat with gas, PSE&G asked to hold its gas supply rate flat for the winter starting October 1, 2026, and the BPU approved that on a provisional basis in September.

Don't expect a reversal. PJM's auction for June 2027 through May 2028 cleared at the price cap for the third year running, and for the first time it didn't secure as much capacity as PJM's own reliability target calls for. The underlying squeeze is still there: more demand, slow-to-connect supply. Flat is the good scenario for the next couple of years. Lower is not on the schedule.

Help Paying Your Electric Bill in New Jersey

If the bill itself is the problem, New Jersey has more help than most states, and higher income limits than many people expect. CBS New York talked to a Martinsville homeowner who got a December bill of about $900, including heat. His family's answer was setting the thermostat lower. The state's answer is below.

Video by CBS New York via YouTube, February 2026. Not affiliated with CliQ.

The Part You Control: How Much You Use

The rate gets set in Trenton and at PJM. The other half of your bill is how much electricity and gas you use, and that part is yours.

Start with heating and cooling. They account for more than half of the energy used in a typical US home, according to the EIA. That makes your thermostat the biggest lever in the house. The Department of Energy says you can save up to 10% a year on heating and cooling by turning the temperature back 7 to 10 degrees for 8 hours a day, like while you sleep or while the house is empty. (DOE does caution that deep setbacks aren't a good fit for heat pumps.)

The catch is "disciplined." Nobody wants to remember to turn the heat down every night and back up every morning. That's the job a schedule does for you. More reasons a bill runs high, beyond the rate, are in our guide to why your electric bill is so high. To see whether yours is actually out of line, check what a normal electric bill looks like.

That's where CliQ comes in. It's a $69.99 smart thermostat that runs the setback for you. You set four temperatures for morning, day, evening, and night. Away mode drops the temperature when you leave and brings it back when you're home, including automatically based on your phone's location. The app is free, with no subscription.

It also installs where other smart thermostats won't. Many older New Jersey homes have two-wire thermostats with no C-wire, the constant-power wire most smart thermostats need. CliQ doesn't need one. It works with most 24V systems: gas furnaces, electric forced air, and boilers. It doesn't control electric baseboard heat. If your old thermostat is a compatible Honeywell two-wire model, CliQ clicks onto the existing wall plate with no tools. Otherwise it's a screwdriver and a few minutes.

$69.99 MSRP. No C-wire required.

Frequently Asked Questions

Prices verified as of October 2026. Check retailer links for current pricing.