New Jersey electricity rates largely stable after BGS auction

The basics:

• 25th annual New Jersey BGS auction results certified Feb. 12
• Most residential, small business electricity rates remain stable
• Slight rate increases for JCP&L, Atlantic City Electric; decreases for PSE&G, RECO
• Gov. Mikie Sherrill pushes for relief measures and bill credits to offset increases

Electricity rates will remain relatively stable for most customers following New Jersey’s 25th annual Basic Generation Service auction. The New Jersey Board of Public Utilities certified the BGS results Feb. 12.

The auction sets electricity supply prices for most residents and many small and mid-sized businesses beginning June 1, 2026. NJBPU only certifies the auction as consistent with market conditions. It does not include setting the prices.

This year’s results show slight increases for some utilities and decreases for others.

Winning prices increased modestly compared with 2025, largely due to higher wholesale energy costs and capacity prices in PJM Interconnection.

However, a PJM “price collar” adopted in 2025 to cap capacity price spikes tempered results. The mechanism was adopted after PJM member states, including New Jersey, argued they were being asked to overpay for capacity. It sets a cap of $325 per megawatt-day.

BGS auction results

The auction secured about 7,600 megawatts of supply through two descending clock auctions. The results cover residential/small commercial (RSCP) as well as large commercial/industrial (CIEP) customers.

The results come on the heels of two executive orders Gov. Mikie Sherrill signed immediately upon taking office. The first declared a state of emergency on utility costs. It also calls on NJBPU to provide Residential University Bill Credits to offset any increases that would take effect June 1.

For average residential customers using 650 kWh per month, impacts before credits include:

• Atlantic City Electric: increase of $0.22 from $201.54 to $201.76 up 0.11%
• JCP&L: increase of $2.23 from $135.24 to $137.47 up 1.6%
• PSE&G: decrease of $3.23 from $183.46 to $180.23 down 1.8%
• RECO: decrease of $1.17 from $170.10 to $168.93 down 0.7%

Top priority: affordability

“As wholesale markets continue to put pressure on energy prices, our top priority is keeping electricity affordable for New Jersey customers by using every available tool to keep costs down as directed by Gov. Sherrill’s Executive Order No. 1,” said NJBPU President Christine Guhl-Sadovy.

Sherrill said in a statement, “Affordability is my top priority. I’ve heard from people across New Jersey that the cost of energy is too high, which is why I’m using every tool at my disposal to drive costs down. The recent auction results demonstrate that the fight to implement price caps at PJM is working to keep electricity costs from further skyrocketing.

“From Day One of my administration, I’ve taken action to provide direct relief to ratepayers, and to offset any increases from this auction. I’m committed to continuing to work to drive down utility costs and hold PJM accountable.”

In a call with reporters, Guhl-Sadovy said the NJBPU will now work to effectuate the EO as quickly as possible. However, she could not comment further on potential or pending actions, such as bill credits. The board would still need to consider those items for a vote, Guhl-Sadovy said.

Utilities responded to the results, noting they do not make a profit on supply costs, which pass directly to customers. The organizations said they will take steps to keep bills as low as possible while providing safe and reliable service.

Shared frustrations

“A residential customer who uses an average of 650 kilowatt-hours per month will pay $180.23 per month, or about $3.23 less per month than they do now due to the change in the supply costs,” PSE&G said in a statement.

“There are many components that make up a bill and the supply cost is only one,” the statement went on to say. “The average customer bill on June 1 and throughout the summer will be determined by all the factors that make up the bill, not only the energy supply price.”

“While the increase in supply rates is far smaller than last year, we know that every dollar matters for our customers,” a JCP&L spokesperson told NJBIZ. “We are actively getting out into our communities to make sure those who need help are enrolled in assistance programs. JCP&L will continue to invest responsibly and make sure that our customers are seeing real benefits from the portion of your bill that we do control.”

“Energy supply prices across the state of New Jersey remain stubbornly high, as indicated by the results of the 2026 electricity Basic Generation Service auction … As a result of the auction, Atlantic City Electric customer bills are projected to remain at historically elevated levels, with a less than 1%  to the supply portion of their bill beginning June 1, 2026,” Atlantic City Electric said in a statement.

“Customers across New Jersey are feeling financial pressure. We understand their frustration with high energy supply costs — and we share in that frustration. These costs are real and will continue to be a challenge for New Jersey households and small businesses until action is taken to build new power generation.”

A ray of light

In a statement, Solar Landscape CEO Shaun Keegan said, “While this week’s BGS auction delivered relatively modest changes for ratepayers, it also highlights how much New Jersey is relying on temporary market measures to keep rates stable, and why we need to move faster to add more in-state energy generation.

“Commercial rooftop solar can be deployed quickly across the state to strengthen the grid, create good-paying local jobs, and help lower energy costs for families and businesses. We’re proud to support Gov. Sherrill’s leadership to lower energy prices and stand ready to work with the administration and the BPU to deliver greater energy stability and affordability across New Jersey.”