As Energy Prices Surge, NJ Groups Urge Gov. Murphy to Demand Bold PJM Reform

PJM reforms are critical for New Jersey’s energy future and affordability crisis

TRENTON, NJ –  July 14,2025 - Representatives from 17 leading environmental, consumer, and clean energy organizations today issued a public call to Governor Phil Murphy, thanking the governor for his work pressing PJM Interconnection for bolder and more urgent reforms, and calling for continued pressure in the face of rising electricity costs across New Jersey.

The message comes as New Jersey’s regional transmission organization (RTO), PJM, gets ready to announce the results of its latest capacity auction. Advocates are raising concerns of another abrupt rise in utility rates, similar to the previous auction that drove electricity bills up for ratepayers by roughly 20%.

“New Jersey families are stuck with rising electricity bills while affordable clean energy projects that could lower costs are needlessly stalled in PJM’s interconnection queue,” said Alex Ambrose, policy analyst at New Jersey Policy Perspective and author of the report Why Are New Jersey’s Electricity Bills Going Up, and What Does PJM Have to Do With It? “PJM needs to adapt to make our power grid more resilient and save customers money on their bills. But with growing demand from AI data centers and expensive, unstable natural gas projects being fast tracked, it’s hard to see how PJM will achieve its vision of affordable and reliable energy for all.”

The July 2025 capacity auction comes at a time when PJM is under heavy criticism for its delays in approving newer, more reliable sources of energy generation. PJM’s interconnection queue includes projects that have been waiting multiple years for approval, earning the RTO a D- grade from Advanced Energy United, the lowest grade of any RTO/ISO in the nation. A lack of new supply and an increase in expected demand from AI data centers resulted in an unprecedented ten times increase in July 2024 capacity auction prices, leaving New Jersey ratepayers with higher bills.

Historically, PJM runs an annual baseload capacity auction three years in advance of the planned delivery year, intended to allow investors to develop new resources during the three year period. However, PJM has fallen off of that schedule, with the July 2025 auction intended for the 2026/27 delivery year. The auction delays were requested by PJM and approved by FERC.

“New Jersey families are already facing an energy affordability crisis worsening with Trump’s Clean Energy Ban and the big tax bill the Congress just passed, which is increasing the cost of electricity. PJM must reform its governance, increase transparency, and speed up clean energy interconnection, to lower electric bills,” said Ed Potosnak, Executive Director, New Jersey LCV. “We’re calling on the Governor to keep up the pressure for passage of the 100% clean energy by 2035 bill to become law and to push PJM to partner with New Jersey and support our clean energy goals, which will lower costs, and deliver a more reliable grid for all.”

While PJM operates behind the scenes, its decisions impact 67 million people across 13 states and Washington, D.C. The letter highlights Governor Murphy’s efforts to hold PJM accountable and outlines specific recommendations to reduce costs, boost grid reliability, and accelerate the transition to affordable, reliable energy.

“We applaud Governor Murphy’s recent actions to demand accountability from PJM, including his legal action with Pennsylvania and other states,” said Elowyn Corby, Mid-Atlantic Regional Director at Vote Solar. “But we can’t stop here. The governor must now use his full influence to ensure PJM becomes a true partner in building a more affordable, equitable, and resilient energy future.”

While over 95% of PJM’s interconnection queue is renewable energy and battery storage projects, the recent Reliability Resource Initiative (RRI) fast-tracked over 9.3 GW of new capacity, the majority of which is from natural gas and coal resources. RRI was criticized for discriminating against proposed projects that have been waiting in the interconnection queue for years.

“PJM’s Reliability Resource Initiative is a guise that allows a “fast pass” for big oil and gas, and provides a convenient excuse to fall back on dirty and dangerous fossil fuel energy sources. Meanwhile, over 1,500 cheaper and cleaner energy generation sources are stuck ready and waiting in PJM’s interconnection queue. This demonstrates a clear bias that exposes how our grid operator continues to allow dirty energy projects to jump the line under the guise of “reliability” and for the sake of profit, while millions of residents across the region pay the price,” said Anjuli Ramos-Busot, Director of the New Jersey Sierra Club. “We thank Governor Murphy for all of the work he has done thus far to hold PJM accountable for their severe lack of transparency and market manipulations, and look forward to continuing the momentum to get cleaner, cheaper energy sources plugged into the grid to bring relief to ratepayers across the state.”

According to a recent analysis from Evergreen Action, if PJM continues its current course, New Jersey ratepayers could face annual energy bills exceeding $2,000. However, by adopting common-sense reforms and accelerating clean energy deployment, consumers could instead save more than $400 per year.

The coalition’s letter outlines several critical steps Governor Murphy should press PJM to take, including:

• Modernizing PJM Governance by creating board seats for state and community representatives, and making PJM’s voting processes public.
• Speeding Up Renewable Interconnection, with a mandatory 150-day timeline for processing studies and assistance for approved projects to come online faster.
• Ending Bias Toward Fossil Fuels, ensuring all energy technologies—especially solar, wind, and battery storage—are evaluated on a level playing field.

“Our current energy system is too slow, too expensive, and too tied to yesterday’s technology,” added Winn Khuong, Executive Director of Action Together New Jersey. “Governor Murphy has an opportunity to stand with ratepayers and demand PJM catch up to the moment. The time for halfway measures is over.”

The coalition’s message is clear: if PJM reforms its processes, New Jersey can unlock cleaner, cheaper power — and protect families from future rate shocks.

"For New Jersey to continue to attract and retain businesses of all sizes, and for businesses to prosper, we must be better prepared for the ever-increasing demand on the grid and threats due to superstorms and climate change. We need a reliable, modern grid that can host greater amounts of power from clean energy sources. PJM must implement interconnection queue and capacity market reforms, thoughtfully engage in interregional transmission planning, and more effectively manage large load capacity, especially as AI data centers plant roots in the region." said Rebecca C. Lubot, PhD, MSc, Executive Director, New Jersey Sustainable Business Network.

“The recent increases in energy costs add another layer of inequity for New Jersey communities facing the effects of climate change,” said Laura Fenster Rothschild, Chief Operating Officer at Isles. “Isles supports the push for PJM to speed up interconnection for cheaper renewable energy and storage; this will help ensure long-term energy reliability and affordability so the communities we serve can catch a break.”

The letter was signed by 17 organizations; New Jersey Policy Perspective, New Jersey LCV, New Jersey Sustainable Business Network, Action Together New Jersey, Vote Solar, Jersey Renews, NJ Work Environment Council, Isles, New Jersey Chapter Sierra Club, Newark Science and Sustainability, Inc., Waterspirit, GreenFaith, Newark Green Team, MnM Consulting, Energy Efficiency Alliance of New Jersey, Clinicians for Climate Action NJ, Environment New Jersey, Metuchen-Edison-Piscataway Area Branch of the NAACP.

###

About the Sierra Club: The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information about our work in New Jersey, visit www.sierraclub.org/new-jersey.