Ever since last July, when the PJM Interconnection’s electricity capacity auction produced what Gov. Phil Murphy called a “staggering” price increase for the 2025/2026 delivery year, New Jersey residents have been fearing a significant rise in their electricity bills beginning June 1.
Now Murphy has written a letter to the Federal Energy Regulatory Commission asking that agency to investigate that July 2024 PJM auction. Murphy says he believes the “exorbitant price increases” may be the result of market manipulation.
Earlier this year, PJM, the grid operator for 13 states including New Jersey, reacted to a letter from Pennsylvania Gov. Josh Shapiro supported by other governors from PJM’s territory, including Murphy, that criticized the auction.
In response PJM offered a plan that would establish a cap on price increases for the next two auctions, in July and in 2026. That plan was challenged by at least one power generator, LS Power Development, which filed a complaint with FERC.
Subsequently, three state ratepayer advocates, including New Jersey’s Brian Lipman, filed a complaint with FERC requesting that the July 2024 auction prices be set aside and that a new auction be conducted for the delivery year that begins in June. They propose a refund to consumers if the new auction prices cannot be determined prior to June 1.
FERC has not ruled on anything yet concerning the price increases likely coming in June. But into this mix comes Murphy’s assertion that market manipulation may have played a role in that controversial 2024 auction.
Murphy’s April 16 letter also comes as Democrats prepare for the June 10 primaries, in which voters will determine who will be the party’s candidate for governor in November. It is an election in which all 80 seats in the Assembly also are before the voters.
With anxious Democrats doing their best to blame PJM for raising energy prices, the grid operator is hitting back with accusations that the present situation is due to New Jersey energy policy. In a statement PJM blamed the price hikes on “insufficient generation in-state.”
That argument plays to the Republican criticism of the Murphy administration in which the GOP has stressed Murphy’s focus on offshore wind projects, saying it led to an electricity supply imbalance.
The day after Murphy wrote his letter, an FERC meeting revealed little support for blaming PJM. Commission Chairman Mark Christie praised PJM and said politicians have been too critical of the grid operator. He called the criticism “misplaced” and pointed to “state policies that have sort of come to a head recently.”
Christie added: “I never doubted PJM’s good faith.” FERC Commissioner Willie Phillips said he found Christie’s comments to be “spot-on.”
Later Christie said he had not seen Murphy’s letter at the time he made his comments at the meeting, but he added that “a lot of these problems are some 20 years in the making.”
FERC has not formally said what it will do with the various complaints it has received.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
