The Board of Public Utilities says charges for keeping power plants on standby now make up 15% to 20% of a typical bill. New Jersey utilities asked the grid operator to plan for 3,470 megawatts of new large-customer demand in 2030. PJM accepted 1,523, and public records do not identify the projects behind that number.
MORRISTOWN, NJ – The New Jersey Board of Public Utilities released a report on Aug. 13 finding that the regional electricity market responsible for a growing share of residents’ bills can no longer deliver reliable power at the lowest possible cost. The report names fast demand growth, most of it from data centers, as one of the changes straining that market.
That market sets a charge on every electric bill in the state. Capacity charges account for roughly 15% to 20% of a typical New Jersey electric bill, according to NJBPU, and they are the largest bill component the state cannot directly set, regulate or change. New Jersey electricity bills rose about 20% last year, the agency said, driven in large part by those costs.
Capacity is a payment for being available. PJM Interconnection, the grid operator for New Jersey and 12 other states plus Washington, D.C., holds auctions years ahead of time to line up enough power plants, batteries and customer demand reductions to cover the hottest and coldest days of a future year. Customers pay for those commitments through the supply portion of their bills whether or not the plants ever run.
“New Jersey ratepayers deserve a clear explanation of why their bills are rising and what can be done about it,” said NJBPU President Ben Hertz-Shargel. “The fastest way to lower bills is getting new power generation built.”
The Legislature ordered the study in August 2025 and gave board staff a year to review PJM’s auction results, its demand forecasts and the reform proposals already under debate at PJM and the Federal Energy Regulatory Commission.
The demand forecast
PJM plans around the single hour each summer when demand is highest. It projects that hour will grow across its 13 states from 156 gigawatts in 2026 to 183 gigawatts in 2030, or 156,000 to 183,000 megawatts. NJBPU’s report attributes about 30 of the 32 gigawatts of growth PJM projected between 2024 and 2030 to data centers.
Most of that projected demand enters PJM’s forecast the same way: a utility tells PJM that a large new customer is coming, and PJM adds demand its ordinary economic model would not have predicted. For 2030, New Jersey’s utilities submitted requests totaling about 3,470 megawatts, roughly 2,970 in Public Service Electric & Gas territory and 500 in Jersey Central Power & Light territory, which covers Morristown and much of Morris County, according to PJM’s September 2025 request workbook. The workbook noted the submissions were informational and not final.
PJM’s final 2026 forecast tables kept 1,523 megawatts of that demand for 2030, about 44% of what the utilities asked for. Of that total, 1,446 megawatts sit in PSE&G territory and 77 in JCP&L’s. The statewide figure equals roughly 7.6% of New Jersey’s forecast summer peak of 19,997 megawatts in 2030.
PJM applied several tests before settling on that figure. It counted a project as committed only if the customer had made a financial commitment and had a signed service agreement, active construction or a long-term supply contract. Projects that failed that test were left out of the years before 2030 and cut roughly in half afterward. PJM also assumed each site would phase in over at least three years, would draw 70% of the power it requested rather than all of it, and trimmed submissions further after reviewing the combined total across all its territories.
Forecasts have missed in both directions. NJBPU’s report compared 2025 actual demand with adjusted forecasts and found demand ran about 14% above forecast in the ComEd territory around Chicago and about 12% above in Dominion’s Virginia territory, while the PSE&G territory came in about 12% below forecast.
Gaps in the public record
PJM’s workbooks report totals by utility territory. They do not name the projects behind the 1,523 megawatts, their municipalities, their request dates or their expected service dates. PJM has not published how many of those megawatts came from customers who met its commitment test and how many were carried at a discount.
No public dataset connects a New Jersey large-customer request to the transmission lines, substations or distribution work built to serve it, or to the cost of that work and the party responsible for paying it. PSE&G’s total also combines data centers with electrification at the state’s ports, so the public tables do not give an exact data-center figure for New Jersey.
The new state law
Gov. Mikie Sherrill signed P.L. 2026, c. 32 on July 7. It directs NJBPU to set standards for large data centers within 12 months. The board must set the size threshold at 50 megawatts or lower and count buildings together when they share ownership or infrastructure, so a large campus cannot fall below the line by splitting into separate filings.
Under the law, those standards must assign the generation, transmission, distribution and substation costs caused by a data center to that customer, protect other customers from paying for equipment left behind if a project is delayed or canceled, require deposits or other financial security, and require developers to disclose substantially similar service requests made to other utilities. Covered facilities must commit to pay for at least 85% of their requested supply for at least 10 years, unless NJBPU sets an alternative with comparable protection. Utilities write the rate schedules that carry out the standards only after the board adopts them, so the requirements do not yet apply to demand already sitting in PJM’s 2030 forecast.
PJM’s proposed capacity purchase
PJM asked federal regulators on July 31 for authority to buy up to 6,831.3 megawatts of new capacity under contracts running as long as 15 years, a one-time purchase meant to close a shortfall its 2028-29 auction did not fill. The proposal caps what PJM would pay at an average of $555 for each megawatt held available per day, and would divide the bill among utility territories according to how much their demand is forecast to grow between 2026 and 2028.
States could direct their utilities to charge that cost to the large customers driving the growth. Without such direction, the default spreads it across all electricity use in the territory. Comments in FERC docket ER26-3380-000 are due Aug. 21.
The state’s virtual power plant proposal
NJBPU is separately taking comment on a proposal to pay households and businesses to let a utility or contractor nudge thermostats, delay electric-vehicle charging or draw on home batteries during the hours when demand peaks. The draft cites delayed power plant construction and rising data-center demand as reasons to use equipment already connected to the grid.
It proposes about $68 million in startup budgets across the state’s four electric utilities and estimates $28.4 million to $143 million a year in avoided capacity costs, depending on how much demand the program removes and how reliably participants respond. The draft does not set payment rates or estimate what a participating household would earn. Comments close at 5 p.m. Aug. 17.
NJBPU’s data-center standards are due by July 7, 2027, and utility rate filings follow within 180 days of the board’s order. PJM has proposed starting its capacity purchase Sept. 30, pending FERC approval.
Methodology: Morristown Minute compared the 2030 summer peak requests in PJM’s September 2025 large-load workbook with the “total load associated with load adjustments” in Table B9b of PJM’s final 2026 forecast tables. Figures are rounded to the nearest megawatt. PSE&G’s totals include port electrification and are not entirely data-center demand.