Politics

New Jersey’s Ratepayer Watchdog Warns Lawmakers’ Energy Agency Plan Would ‘Almost Certainly’ Raise Utility Costs

New Jersey Gov. Mikie Sherrill (Screenshot/X/@MikieSherrill)

New Jersey lawmakers are weighing a new state energy agency as utility bills climb, but the state’s ratepayer advocate says the legislation to create it does not explain how it would buy power or who would pay for it.

Division of Rate Counsel Director Brian Lipman urged lawmakers in an Oct. 2 letter to reject the legislation, A4004, warning it would “almost certainly result in higher bills for New Jersey ratepayers.”

The Assembly Telecommunications and Utilities Committee took testimony for more than two hours Monday on two bills, including A4004, that would create a state agency dedicated to planning and buying energy, the New Jersey Monitor reported. Specifically, A4004 would set up a state energy resource and development division, and the other, A3610, would establish a state Department of Energy. The panel did not vote.

Supporters argued that the Board of Public Utilities (BPU) cannot both shield ratepayers and expand the state’s power supply, noting that New Jersey produces only about two-thirds of the energy it uses, according to the outlet.

Democratic Gov. Mikie Sherrill signed executive orders declaring a state of emergency on utility costs during her inaugural speech in January, she wrote on X at the time.

“No disrespect for BPU because I like BPU. I think they do an excellent job of protecting the ratepayers,” Democratic Assemblyman Robert Karabinchak, the chief sponsor of A4004, said at the hearing, according to the Monitor. “However, I think there has to be some level of separation.”

Karabinchak, Republican Assemblyman Paul Kanitra and PJM Interconnection, the regional grid operator, each did not immediately respond to the Daily Caller News Foundation’s requests for comment.

Lipman wrote that the programs A4004 would move out of the BPU are “almost all fully funded through utility ratepayers” yet the bill does not say how rates would be set, when the programs would face a prudency review or that the new division’s rates must be “just and reasonable.”

“The dismemberment of a single-agency authority to set rates will only ensure higher rates in New Jersey,” Lipman wrote. “At a time of affordability, this is simply untenable.”

“Preliminarily, it is unclear how the bill as drafted would allow the state to procure power for our residents,” Lipman said in a statement to the DCNF. “Basically, the bill is missing the entire subject of funding, and where that funding will come from.”

The BPU, which would hand some of its responsibilities to the new division under A4004, said in a statement to the DCNF that the agency does not comment on pending legislation.

California lawmakers have already authorized the state’s Department of Water Resources to buy electricity from offshore wind farms and other large projects that the state’s biggest utilities had not been willing to commit to, Power Engineering reported. California already has some of the highest electricity rates in the country, the outlet noted.

New Jersey is one of 13 states, along with Washington, D.C., on the grid run by PJM, according to the Federal Energy Regulatory Commission. Democratic Assemblyman Kevin Egan said at the hearing that the state should work out how to “break our ties with PJM and get away from that circus,” according to the Monitor.

Kanitra criticized speakers at the hearing for “throwing PJM under the bus” and blamed “ideology on climate change” for rising costs, the outlet reported.

New Jersey had a state energy department until 1987, when then-Republican Gov. Tom Kean abolished it, according to the Monitor.