Green Policies Generate Higher Electric Rates

At Issue

By Ray Cantor, NJBIA Deputy Chief Government Affairs Officer On Apr 30, 2025

Since Gov. Thomas Woodrow Wilson expanded the Department of Public Utilities in 1911 to cover electric public utilities, two predicates determined how the state regulated these utilities for more than 100 years: Rates must be affordable and service reliable. 

Because we had leaders who understood the vital importance of a stable and affordable energy system, the professionals who led the Board of Public Utilities (BPU) ensured these goals were the first thing they considered.

The basis for managing our electrical grid changed dramatically with the adoption of the 2020 Energy Master Plan (EMP) and policies that implemented it. Gone was the emphasis on affordability and reliability. In its place were “green” policies that sought 100% “clean” energy by 2035 and emphasized renewable energy and the near total elimination of natural gas to generate electricity. The grownups have left the room.

This outcome was not a surprise to those of us who commented on the EMP back then. We warned of higher energy prices and the potential for brownouts and blackouts. Reality has finally caught up with ideology. The BPU has announced residential electric rate increases of 20% beginning next month. PJM (the regional grid manager) has warned of a resource shortfall as older coal and natural gas plants are being taken offline even as demand for electricity grows.

Policies that promote the complete electrification of our transportation and building sectors have the unavoidable consequence of creating demand for more energy. Creating data centers to run our AI buildout will exacerbate demand. This predicament was foreseeableand avoidable.

So, what do we do now? First, we need grownups back in the room who will make decisions based on reality, not ideology. While we should still support the creation of more solar installations, and offshore wind when the economics are made to work, we also need to immediately begin building clean natural gas electric generation units. These units will drive down costs and will reduce greenhouse gas emissions by replacing dirtier energy sourced from the PJM. 

Nuclear power also needs to be part of our energy future, and we should actively pursue the development of new plants in our state. We should also rethink the state’s membership in the Regional Greenhouse Gas Initiative (RGGI), which drives up both costs and emissions.

It is not too late to fix this problem. We just need to grow up.

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