Murphy Demands Feds Investigate Energy Price Hikes That Threaten NJ Businesses

New Jersey families opened their electricity bills this spring and felt the sting of a system gone wrong. A jaw-dropping price surge, tied to a flawed regional energy auction, has tacked on $20 to $25 a month to the average household’s expenses. For small businesses, the hit is even harder, threatening their survival. Governor Phil Murphy, backed by a coalition of state leaders, is sounding the alarm, demanding the Federal Energy Regulatory Commission investigate whether market manipulation drove these punishing costs.

This isn’t just about numbers on a bill. It’s about parents choosing between groceries and keeping the lights on. It’s about shop owners staring at ledgers, wondering how to make ends meet. The 2024 Base Residual Auction, run by PJM Interconnection, which manages the grid for 65 million people across 13 states, saw costs skyrocket from $2.2 billion to $14.7 billion in a single year. That’s not a market working efficiently. That’s a market failing people.

Murphy’s call for action isn’t a knee-jerk reaction. It’s a response to a crisis that’s been brewing for years, rooted in a system that prioritizes profits over people. The auction’s outcome, which sets the price for future electricity capacity, has left ratepayers footing the bill for what many suspect is deliberate manipulation. PJM’s own Independent Market Monitor flagged the auction as skewed by withheld resources, doubling costs beyond what supply and demand should dictate.

The stakes couldn’t be higher. As summer looms, families and businesses brace for even steeper bills. Murphy’s push for accountability, joined by Governors Josh Shapiro, J.B. Pritzker, and Wes Moore, is a stand for fairness, demanding a system that serves the public, not just the powerful.

PJM’s capacity auction is supposed to ensure a reliable electricity supply, but its 2024 results tell a different story. The clearing price leaped from $28.92 per megawatt-day to $269.92, a tenfold increase that defies logic. Independent analysts, including PJM’s market monitor, point to market power abuses, like withholding exempt resources to artificially inflate prices. This isn’t competition. It’s exploitation, and New Jerseyans are paying the price.

Historical parallels are hard to ignore. The California energy crisis of 2000-2001 saw companies game the system, creating artificial shortages to jack up prices. Blackouts followed, and families suffered. Today’s PJM auction may not have caused blackouts, but the financial strain is real. Maryland’s consumer advocates have filed complaints with FERC, arguing that customers are paying twice for the same capacity due to anticompetitive behavior. These aren’t isolated incidents but symptoms of a market structure that invites manipulation.

Some defend the auction’s outcome, claiming higher prices reflect the costs of reliability, especially with aging coal plants retiring and demand rising from data centers and electric vehicles. But this argument crumbles under scrutiny. PJM’s own data shows the auction didn’t reflect true supply and demand. Instead, flawed rules and lax oversight allowed a handful of players to dictate terms, leaving ratepayers to clean up the mess. Reliability is critical, but it shouldn’t come at the expense of fairness.

Murphy’s administration has been proactive, pushing FERC to cap auction prices and stabilize the market long before this crisis hit. Their advocacy, alongside other states, recently secured a $21 billion savings deal for consumers across the region. Yet, the deeper issue remains: a market design that fails to prioritize affordability and transparency needs more than patchwork fixes. It needs an overhaul.

While Murphy battles for immediate relief, he’s also charting a long-term course to shield New Jerseyans from future price shocks. The state’s investment in renewable energy and storage is a beacon of hope. Last year, New Jersey surpassed five gigawatts of solar power, cutting costs and emissions. A new storage incentive program, set to launch this summer, will boost grid reliability by harnessing excess capacity, reducing dependence on volatile auctions.

Nationally, the renewable energy boom offers a blueprint. In 2024, the U.S. added 54 gigawatts of clean energy, with solar leading the charge. Battery storage grew by 11.9 gigawatts, and costs dropped to $115 per kilowatt-hour. These advancements, fueled by the Inflation Reduction Act’s tax credits, show that a cleaner, more affordable grid is within reach. Yet, bottlenecks in permitting and grid interconnection slow progress, underscoring the need for federal and state collaboration.

Skeptics argue that renewables can’t yet meet rising demand, pointing to the intermittency of solar and wind. But this ignores the rapid pace of innovation. Energy storage, demand response, and efficiency programs are already bridging the gap. New Jersey’s all-of-the-above approach, from community solar to battery incentives, proves that reliability and affordability can coexist. The real obstacle isn’t technology; it’s a market structure that clings to outdated fossil fuel models.

For those struggling now, New Jersey offers tangible relief. State utility assistance programs help with bills, rent, and efficiency upgrades, ensuring no one is left in the dark. These measures, while vital, are stopgaps. The ultimate solution lies in transforming the energy market to prioritize people over profits, with renewables and storage at the core.

New Jersey’s fight against soaring energy bills is more than a policy dispute; it’s a moral imperative. Families and businesses deserve a system that delivers reliable, affordable power without exploitation. Governor Murphy’s demand for a FERC investigation is a critical step, but it must spark broader reform. PJM and FERC have the tools to fix this broken market, from stricter oversight to rules that curb manipulation. They just need the will.

The path forward is clear. By doubling down on renewables, storage, and efficiency, New Jersey can lead the nation toward a grid that’s not only reliable but just. This crisis, painful as it is, is a chance to rethink how we power our lives. Let’s seize it, for the sake of every family staring down a bill they can’t afford and every business fighting to keep the lights on.