While electricity costs rarely ignite political passions, they’ve become the dominant issue in New Jersey’s upcoming November gubernatorial election. Campaign ads and stump speeches are buzzing with discussions about power bills, an unusual spotlight on a typically overlooked topic.
This sudden prominence stems from a significant 22 percent increase in electricity rates over the past year, placing New Jersey second only to Maine in rapid price hikes. As the governor’s race tightens and concerns about affordability grow, energy costs have been amplified in political advertisements funded by both national parties.
The situation in New Jersey is seen as an early indicator for the national political landscape in 2026, when numerous gubernatorial, congressional, and state legislative seats will be contested. The reason? Electricity rates are climbing sharply across many states, with the national average residential rate up 5 percent in July compared to last year. Experts predict these rapid increases will continue.
For many Americans, the rising cost of living has been a persistent worry over the past few years. This year, it’s notably impacted by President Trump’s aggressive tariffs on imported goods.
“Electricity is the new eggs,” observed David Springe, executive director of the National Association of State Utility Consumer Advocates. He draws a parallel to the widespread frustration over inflation that significantly influenced last year’s election results.
Despite the complex and often obscure reasons behind escalating energy costs, New Jersey’s gubernatorial hopefuls, Democrat Representative Mikie Sherrill and Republican Jack Ciattarelli, are actively trying to leverage the issue.
Ms. Sherrill has pledged to “massively expand cheaper, cleaner power generation” and proposed an emergency declaration to freeze electricity costs for a year.
Conversely, Mr. Ciattarelli, in his third gubernatorial bid, blames Democrats, including Ms. Sherrill, for the rising expenses. Democrats have held the governor’s office for eight years and maintained control of the State Legislature for 23 years.
Seven years ago, under Gov. Philip D. Murphy’s initial term, New Jersey was an electricity exporter, thanks to its extensive natural gas and nuclear power plants. However, increased energy demand and the closure of several plants have since transformed the state into a net importer of electricity, according to an analysis by the Energy Information Administration.
“We’re having to import our electricity and paying through the nose to do it,” Mr. Ciattarelli asserted at a recent news conference.
However, simply importing electricity isn’t solely responsible for New Jersey’s escalating rates. Other states, like West Virginia, which generate more energy than they consume, have also experienced substantial price increases.
Most governors have limited immediate power to reduce electricity prices. Rates comprise various costs, only some of which retail utilities and state officials can influence. Utility companies or government-run power agencies typically propose electricity costs, which state and city regulators then approve. While governors or mayors usually appoint these regulators, they often lack the authority to reject rate increase requests or mandate lower prices.
“Let’s be clear: The cost of electricity is not set by the governor in any state,” stated Mark Cooper, a senior fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law and Graduate School. “Everyone will say, ‘We will lower the prices,’ but the question is how? The answer is it’s a long process.”
New Jersey, along with a dozen other states, is part of the nation’s largest regional electric grid, managed by PJM Interconnection, a nonprofit organization. PJM oversees the electricity grid for 67 million people spanning from Virginia Beach to Chicago, effectively determining a significant portion of retail electricity rates over which governors and their appointed regulators have minimal influence.
PJM’s membership includes a wide array of energy industry players: utility companies, power plant and power line owners, and energy traders.
A primary driver of soaring electricity prices in New Jersey and other PJM states is the annual auction where power plant owners bid on the prices they’ll accept to supply electricity during peak demand, typically in summer. These auction prices have surged in recent years, directly leading to higher retail energy rates.
Remarkably, at least three-quarters of New Jersey’s average 22 percent electricity rate increase can be traced back to this PJM auction.
For New Jersey’s four main investor-owned utilities, power system costs have added hundreds of dollars annually to household bills. As of June 1, customers using 650 kilowatt-hours per month are paying an additional $22.67 to $28.02 compared to previous rates.
New Jersey isn’t alone in grappling with this financial strain.
Several governors have grown increasingly critical of PJM, arguing that the grid manager has created excessive hurdles for new wind and solar projects to connect to the grid and deliver more affordable electricity.
In December, Pennsylvania Governor Josh Shapiro, a Democrat, initiated a lawsuit against PJM concerning its annual July auction. Subsequently, Mr. Shapiro and PJM reached a settlement that capped the auction’s price, a deal the governor estimates will save PJM customers approximately $21 billion over two years.
A PJM spokesperson, Dan Lockwood, stated that the organization is actively reforming its markets and the processes for integrating new energy sources and addressing supply-demand imbalances. “Electricity prices are rising, not only in New Jersey but across PJM and throughout the rest of the United States, because demand is outpacing supply,” Lockwood said. “PJM understands the challenges that higher energy prices pose to the people and businesses of any state or jurisdiction we serve, and we are working with our stakeholders on multiple fronts to alleviate this supply/demand imbalance.”
Beyond PJM’s challenges, other factors contribute to rising electricity prices. The significant costs of long-overdue power system upgrades and the infrastructure needed to support energy-intensive data centers are also pushing up household electric bills.
New Jersey and several other East Coast states are also facing the impact of Mr. Trump’s opposition to offshore wind projects. Last month, he directed several federal agencies to devise strategies to impede the installation of hundreds of wind turbines in coastal waters from Maine to North Carolina.
Governors from New Jersey, New York, Massachusetts, Connecticut, and Rhode Island jointly signed a letter, urging the Trump administration to remove any obstacles to offshore wind projects currently in development or under construction.
Ms. Sherrill supports offshore wind initiatives, while Mr. Ciattarelli aligns with Mr. Trump’s stance against them.
Energy experts warn that this dispute over offshore wind could lead to even higher electricity bills.
After more than a decade of stagnant electricity demand, the East Coast desperately needs more energy, driven by a boom in data center construction. Gregory Poulos, executive director of the Consumer Advocates of PJM States, an organization representing electricity customers, noted that this demand equates to roughly 60 gigawatts, almost California’s entire electricity consumption.
“I’m very worried that we’re looking at superhigh costs and blackouts in the region,” Mr. Poulos cautioned.
Public Service Enterprise Group, the utility serving approximately 70 percent of New Jersey’s electricity users, announced it offers payment relief and energy efficiency programs. However, the company clarified that it manages less than half of what customers pay for electricity service, with costs influenced by factors like PJM’s grid capacity auction results.
“We’re working hard to keep bills as low as possible on the portion of the bill that we manage and control,” stated Dave Johnson, the utility company’s chief customer experience officer.
Ashley Koning, director of the Eagleton Center for Public Interest Polling at Rutgers University, which has surveyed the governor’s race, highlighted that voters are acutely aware of affordability, with utility costs being among their most tangible concerns.
“That increase that you’re seeing,” she said, referring to monthly utility bills, “is probably more affecting and more damaging to you than seeing your tax bill go up.”