New Jersey Orders Probe, Demands Transparency From PJM – Inside Climate News

New Jersey has reached the forefront of a regional revolt against PJM Interconnection, the grid operator serving 65 million people across 13 states and the District of Columbia. 

Gov. Phil Murphy signed two measures into law last week, pressing for reforms to PJM’s controversial capacity market and forcing its utilities to disclose how they vote inside the operator’s opaque decision-making system.

“These bills complement our long-term plan of action to hold PJM responsible for hardworking New Jerseyans’ skyrocketing electricity bills and a lack of new energy generation,” Murphy said. “We are committed to creating a system that is fairer and more transparent for customers and the states that represent them—a necessary change from the opaque practices that have, for too long, defined PJM.”

The moves come as frustration with PJM builds across the region. Governors from Maryland, Pennsylvania and Illinois, among others, have already called for governance reforms.

In New Jersey, electricity prices jumped by about 20 percent this year after PJM’s capacity auction in 2024, forcing the state to fund a $430 million relief package for ratepayers. The spike won’t be a one-off: Prices are expected to climb again next year, after this year’s auction price hit the price ceiling, adding urgency to Trenton’s push for reform. 

The first measure, Senate Joint Resolution 154, directs the state Board of Public Utilities (BPU) to investigate whether PJM’s Reliability Pricing Model—its capacity market—is achieving its intended purpose of securing enough electric power capacity from the right mix of power producing companies at the lowest possible cost. 

“The energy auction that is the principal cause for the spike in utility bills is clearly broken and in desperate need of reform,” said state Sen. John Burzichelli, a Paulsboro Democrat and one of the sponsors of the resolution.“This investigation is needed to identify the specific causes and determine the reforms needed to reduce costs and increase the supply of new energy.” 

Lawmakers argued that rising capacity prices, combined with PJM’s delays in reviewing new generation projects, have saddled ratepayers with higher bills while slowing the entry of cleaner, cheaper power plants. The resolution also instructed the state to work with other PJM states to push for reforms, including faster interconnection reviews and protections for low-income families who are hit hardest by bill increases.

“Energy price hikes disproportionately affect low-income families and vulnerable populations, aggravating existing inequalities and creating additional financial hardships,” the resolution said.

The second measure, Assembly Bill 5463, mandates transparency. 

The law required electric utilities statewide such as Public Service Electric and Gas Company, Atlantic City Electric and Jersey Central Power & Light to file annual reports with the BPU disclosing every recorded vote they or their affiliates cast at PJM meetings. They must also explain the purpose of the meeting, their role in it and whether the vote aligned with the state’s goals for affordable, reliable and sustainable energy

For years, PJM has published only aggregate tallies of “yes,” “no,” and “abstain” after many of its committee votes, leaving stakeholders and the public in the dark about how powerful companies and utilities voted. 

“This bill will ensure PJM voters take responsibility for their decisions, increasing the public’s confidence in the decisions being made,” said Assemblyman Robert Karabinchak, a Democrat from Edison and one of the bill’s sponsors.  

PJM’s decisions are shaped by a layered voting process. At the top, a Members Committee acts like a Senate, where each sector like utilities, generators and consumer advocates get one vote. Below that, dozens of technical and policy committees function more like a House of Representatives, where individual companies and their affiliates cast ballots. Those lower-level votes, roughly 150 at a time, set the stage for what rises to the top. 

Because the big holding companies that supply power in the state, known as independent power producers, can control multiple affiliates, they often wield outsized influence in shaping PJM’s policies before they ever reach the final stage.

“It’s really exciting to see the disclosure bill in particular passed,” said Clara Summers, who advocates for cleaner and more affordable energy at the Citizens Utility Board (CUB). “If you think of PJM similar to Congress, where there are committees and then the House and the Senate, PJM’s lower-level committees are the gatekeepers. They decide what proposals get considered at the higher levels. But right now, you don’t know who’s voting for what.”

CUB, as a consumer advocate member of PJM, once proposed that a PJM board seat be reserved for someone with expertise in clean energy. The motion was initially set for a public vote, but members switched it to a secret ballot—and the proposal was ultimately killed.

“So if that’s happening because of anonymous voting on innocuous issues like having expertise on the PJM board, then imagine what’s happening on issues where it’s actually something that affects how much we pay for our electricity,” said Summers.

States have since demanded reforms ranging from lowering PJM’s high capacity prices and unclogging the interconnection queue to expanding access for renewables and storage. They’ve also pushed for stronger transmission planning and governance changes that give states more say over the grid operator’s board.

The New Jersey law on transparency may not immediately upend PJM’s decision-making, Summers said, but it chips away at one of the operator’s biggest blind spots: how utilities use their multiple votes. By forcing New Jersey’s utilities to disclose their positions, the state can better ensure they aren’t voting against its policy goals, even if they only represent a fraction of PJM’s overall tally.

PJM pushed back against New Jersey’s new measures, arguing that the state is misplacing blame. In a statement, the grid operator said it does not set retail rates and insisted that price spikes reflect broader supply-and-demand pressures, not PJM’s governance or market design.

“Pointing fingers will not solve the supply-and-demand realities driving higher prices for consumers in New Jersey, including challenges that stem from failed policies. Our focus remains on working toward real solutions, because New Jerseyans deserve nothing less,” PJM said in a statement.

New Jersey is not alone in pushing for utility vote disclosure. Maryland and Delaware have passed similar measures and at least eight other states introduced legislation this year, including Pennsylvania, Illinois and Virginia.

“The more states in PJM who get to do this—to hold their utilities accountable and get more transparency at PJM—the better the outcomes we hope for consumers,” said Summers.