EElectricity rates are rising dramatically in New Jersey. As of June 1, 2025, business can see up to a 20% rise in rates. An increase that large can significantly affect your budget. For context, JCP&L rates are now over 14¢ per kilowatt-hour for basic service—compared to 11¢ per kilowatt-hour prior to the rate increase. Businesses in New Jersey, especially those with large electricity needs, will see substantial increases in monthly energy bills. For example, a business using 20,000 kWh per month (an expected consumption amount for a small to mid-size operation) would face a monthly electricity cost of over $2,800.
What’s Driving the Increase?
Several market and infrastructure challenges are putting upward pressure on electricity costs:
- Auction Price Spikes: The PJM Interconnection, which oversees the regional grid, has seen record-high-capacity auction results, reflecting a supply/demand imbalance.
- Rising Capacity Costs: Capacity charges—fees to ensure power availability—have surged, with some regions experiencing a nearly tenfold increase. These charges make up roughly a fifth of a typical energy bill.
- Increased Demand: A growing reliance on electricity, including expansion of energy-intensive data centers, is straining supply across the state.
- Grid Constraints: Delays in bringing new power generation projects online—combined with the retirement of older facilities—are tightening supply. As a net importer of power, New Jersey is especially vulnerable to these constraints.
While utilities like PSE&G, JCP&L, Atlantic City Electric, and Rockland Electric pass these wholesale electricity costs directly to consumers without profit, the impact on monthly bills is undeniable.
What is the State Doing?
State leaders are working to ease the burden:
- The NJBPU approved a plan for all residential customers to receive an automatic $30 credit in July and another in August. The deferred cost will be repaid interest-free in $10 increments from September through February. As NJBPU is primarily focused on protecting residential properties, there are currently no relief programs for commercial ratepayers.
- Public hearings and policy reviews are underway to address PJM’s auction model and advocate for more consumer-friendly reforms.
The NJBPU plays a crucial role in approving any utility rate changes. They investigate utility requests, with the Division of Rate Counsel advocating for consumer interests throughout the process. Public hearings also provide an opportunity for ratepayers to voice their concerns.
How to Take Control of Your Energy Costs
While utilities are limited in their pricing flexibility, your business isn’t. As a trusted energy partner for over 155 years, Sprague empowers you to make smarter energy decisions with tailored solutions that put you in control.
Instead of relying on your utility’s basic service rate, Sprague offers businesses options:
- Lock in Budget Certainty: Fixed pricing options provide predictable monthly costs, helping to eliminate seasonal rate spikes.
- Stay Flexible: Variable or market-based pricing programs let you respond to changing market conditions and potentially capitalize on lower prices.
- Customize Your Plan: Every business is unique. Our energy experts build pricing strategies that align with your usage patterns and financial goals.
Getting Started is Simple
Taking control of your energy costs starts with one easy step. Just send us a recent electric bill, and we’ll do the rest. As an energy broker, our experts will analyze your usage, compare available options, and recommend a cost-effective solution— so you can focus on running your business while we help you take control of your energy costs.
Don’t let rising rates catch you off guard — connect with Sprague today.
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