Increasing electricity costs have become a central theme in New Jersey’s upcoming gubernatorial race and may play a significant role in the 2026 midterm elections.
Across the country, electricity prices surged by 6.2%, significantly outpacing last year’s overall inflation rate of 2.9%.
In New Jersey, electricity expenses for homes are about 22% higher in July compared to the previous year.
During the latest gubernatorial debate in the Garden State, both candidates made this issue a priority in their opening remarks.
Republican candidate Jack Ciatarelli expressed, “We are facing an affordability crisis due to property taxes and electric bills.”
Meanwhile, Democratic Representative Mikie Sherrill stated, “I’m focused on lowering costs and making New Jersey more affordable, which starts with declaring a state of emergency on energy costs.”
Experts attribute the rising rates to increased demand from new and upcoming data centers, alongside insufficient grid connections to satisfy this demand.
Ara Schuur, a research expert at Rutgers University’s Center for Urban Policy Research, noted, “The governor’s capabilities are somewhat limited in this situation.”
According to Schuur, PJM, the regional operator that provides power to several states including New Jersey, essentially controls the influx of new energy supply.
Frank Felder, president of Independent Electric Consultants and former head of the Rutgers Energy Institute, added that PJM is conducting competitive auctions based on projected electricity needs.
Felder pointed out that the emergence of new, power-hungry data centers will likely elevate demand estimates and consequently drive up electricity prices.
“A lot of data centers are being proposed,” he remarked.
These projections could rival the scale of large power facilities, meaning that as demand rises, so do prices, while supply remains relatively stagnant.
Additionally, the timeline for adding new power to the grid tends to be lengthy, often depending on securing funding and approvals.
Schuur remarked, “Economics, regulations, and PJM have all combined to create these supply limitations.”
Sherrill’s campaign has criticized PJM in a recent video, highlighting that the operator usually operates under the radar and only gets attention in crisis situations, like the power outages that brought ERCOT in Texas into focus following the severe winter storm in 2021.
She noted, “We’re awaiting 268 gigawatts of new power to be incorporated into the grid, yet PJM has taken too long, sometimes up to six years, to approve new projects.”
However, PJM indicated it is making progress in streamlining its approval processes.
Asim Haq, PJM’s senior vice president for government and member services, stated, “There’s enough supply that can be connected to the grid from the projects that have been cleared.”
He also mentioned the backlog of projects has decreased significantly from over 200 GW to just 46 GW.
According to PJM spokesperson Dan Lockwood, the operator is implementing multiple strategies to address the current imbalance between supply and demand.
“This includes rethinking how we connect markets and new resources, establishing new regulations for consolidating major loads, enhancing demand flexibility, and improving load forecasting accuracy,” Lockwood shared.
While both Sherrill and Ciatarelli acknowledge the issue, their approaches differ.
Sherrill proposed utilizing the “Ratepayer Protection Fund” as a temporary solution to cover abrupt spikes in utility costs and to promote cleaner energy and efficiency upgrades.
On the other hand, Ciatarelli suggested withdrawing from the Regional Greenhouse Gas Initiative, an agreement aimed at limiting emissions among northeastern states, while also discussing plans for expanding nuclear and natural gas power plants.
Both candidates support initiatives for solar energy installations on warehouse rooftops.
Yet, Felder cautioned that practically addressing the issue might be complex since data centers, which are key contributors to price hikes, can generate costs from both inside and outside of New Jersey.
“What New Jersey requires is either collaboration with other states or meaningful support from PJM. Unless PJM ensures adequate supply or power generation on its own, it can’t connect large data centers effectively,” he stated.
The political implications of rising electricity prices are also resonating beyond New Jersey this year.
Democrats targeting Republican seats are leveraging rising power costs to challenge their opponents, particularly in light of Congress’s recent cuts to renewable energy incentives.
“We’re already seeing a direct effect in Colorado’s 8th District,” noted Shannon Byrd, a Democrat hoping to unseat Republican Rep. Gabe Evans, specifically mentioning halted battery factory projects and eliminated subsidies from the previous administration.
“I’m committed to bringing more investment back to our state,” she promised.
Beth Davidson, running for a seat held by Rep. Mike Lawler (R-N.Y.), similarly slammed his vote to cut renewable energy incentives, saying, “Energy costs and utility bills are prevalent topics among my constituents.”
“I discuss this with voters daily. It’s undoubtedly going to be a central focus of my campaign,” she added.
Meanwhile, Republicans are attempting to shift the blame onto Democrats.
“From closing nuclear power plants to imposing unrealistic obligations under the Climate Leadership Act, these choices are responsible for rising costs for families,” argued spokesperson Ciro Riccardi.
“Energy bills in blue states reflect the consequences of failed leadership and misguided policies from governors like Hochul and Polis,” remarked Mike Marinella, a spokesman for the National Republican Campaign Committee, referring to New York’s Kathy Hochul and Colorado’s Jared Polis.
