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If your business is in New Jersey, you can expect higher electricity bills in 2025. The reason? PJM’s record-breaking capacity auction is driving up costs across the region.

For a state where 9 million people and thousands of businesses rely on electricity daily, the impact is significant. What used to be a minor line item is quickly becoming a major operating expense. Whether you manage a warehouse in Newark or multiple sites in Jersey City, now is the time to look at what businesses can do to stay ahead (and still save).                                                                                                                       

What’s Going On With New Jersey's Electricity Prices?

As of June 2025, PJM, the regional transmission organization serving 65 million people from New Jersey to Illinois, cleared its latest capacity auction at historically high prices. This auction sets the cost of ensuring enough power will be available in future years. It directly affects what retail electricity suppliers charge business customers today.

• In many New Jersey zones, capacity prices jumped by more than 20% to $270.43 per megawatt-day.
  
• PJM estimates residential bills could rise by 1.5% to 5%.
• For commercial and industrial buyers, the impact could be even larger, especially if your contract is up for renewal.
  

Demand Is Rising While Supply Lags

Several long-term trends are driving up demand across the PJM region:

• Growth in data centers
  
• Expansion of EV charging infrastructure
• Electrification of heating and manufacturing processes
  
  

At the same time, clean energy projects such as solar, wind, and battery storage are facing long delays in PJM’s interconnection queue. This supply-demand imbalance is one of the primary reasons for rising prices.

Infrastructure and Policy Costs Are Climbing

According to the Electric Power Supply Association (EPSA), most of your electricity bill is not made up of the power itself. It includes:

• Transmission and distribution system charges
  
• State policy compliance fees
  
• Grid modernization and investment costs

These components have been increasing steadily in New Jersey due to state-level clean energy goals and aging grid infrastructure. These non-supply costs now account for a growing share of total energy expenses.

What This Means for Commercial Customers

If you're a business buying power in New Jersey, these capacity prices affect your budget, procurement strategy, and timing.

• Timing matters more than ever. Customers who locked in contracts before June 2025 likely avoided the spike.
  
• Contract structure is key. If your supplier builds capacity into a fixed rate, your future costs may rise significantly when your contract ends.
  
• Multi-site buyers may see bigger impacts, especially across different PJM zones.

What You Can Do Right Now

The good news? You have options. Here are five actions you can take today to protect your energy budget:

Review your current contract
Know when it ends, what rate structure you are on, and what is included in the rate (capacity, transmission, etc.).

Time your renewal wisely
Avoid locking in rates during periods of high capacity or transmission cost increases. 

Compare total cost, not just the rate
Some suppliers may offer lower supply rates, but offset them with high pass-through charges. Ask about hidden or unforeseen charges.

Stay informed or let us monitor for you
Capacity markets, infrastructure filings, and policy shifts can change your energy costs overnight. At Arise Energy, we monitor those shifts for you and let you set alerts, so you’re always a step ahead and never caught off guard.

Talk to a procurement expert.
If your current energy partner isn’t flagging cost-impacting changes, it’s time for one that does. Our experts at Arise Energy help you make smart, timely decisions before higher costs show up on your energy bill.