New Jersey Joins Bipartisan Energy Collaborative as Regional Electricity Costs Draw Scrutiny

By: Cosmo F. Terrigno, Ed.S.

Dana DiFilippo | New Jersey Monitor

SOUTH JERSEY | Decisions about electricity prices and reliability extend far beyond New Jersey’s borders, but their financial consequences can reach households, businesses, and public institutions throughout the state, and specifically, the state’s eight southern counties.

On October 8, New Jersey Governor Mikie Sherrill joined governors from 12 other states and the mayor of Washington, D.C., in formally establishing the bipartisan PJM Governors’ Collaborative, an organization intended to give participating states a stronger, coordinated voice in regional electricity decisions affecting costs and reliability.

The announcement came during the Second Annual Governors’ Summit on the State of PJM Interconnection in Chicago. Participating officials announced a signed memorandum of understanding establishing a framework for cooperation on electricity affordability, reliability, and regional energy planning, according to the October 9 announcement from Sherrill’s office and the Collaborative’s October 8 press release. The formal establishment is also confirmed by Illinois Governor JB Pritzker’s office.

For South Jersey residents, the initiative raises questions about how regional electricity markets influence local utility costs, how states participate in decisions affecting those markets, and whether proposed changes could eventually affect household and business expenses.

Understanding PJM’s Role in South Jersey

PJM Interconnection operates wholesale electricity markets and coordinates electricity transmission across all or parts of 13 states and the District of Columbia, including New Jersey. Its responsibilities include managing regional transmission operations, administering wholesale electricity markets, and planning transmission improvements needed to maintain reliability.

Across South Jersey’s eight counties, Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean, and Salem, residents and businesses receive electricity through local utilities, but the cost of that electricity is influenced in part by decisions made within PJM’s regional wholesale markets.

PJM’s capacity market is particularly relevant because it compensates electricity resources for commitments to be available when the grid needs them. Those costs can become part of the electricity supply charges ultimately paid by customers, although changes in wholesale market prices do not necessarily produce equivalent percentage changes in individual electricity bills.

South Jersey also plays a role in supplying electricity to the broader region. The Salem and Hope Creek nuclear generating stations are located together on Artificial Island in Lower Alloways Creek Township, Salem County. According to PSEG Nuclear’s official description of the facilities, the three nuclear units collectively produce a substantial portion of New Jersey’s electricity.

Their importance extends beyond the generating stations themselves. PJM has documented regional transmission improvements involving Artificial Island designed to address grid-stability concerns associated with the complex and improve transmission connections serving the broader region.

These facilities illustrate how South Jersey participates in the regional electricity system not only as a consumer of power, but also as a location of significant generating and transmission infrastructure.

Why Electricity Costs Are Receiving Regional Attention

The Collaborative’s announcement identifies several concerns affecting PJM’s electricity system, including increasing demand, delays in connecting new generating facilities, the retirement of existing power plants, supply-chain constraints, and tightening electricity supplies.

PJM’s published capacity-auction results also document challenges in securing sufficient electricity resources to meet the region’s projected reliability requirements.

In its July 14, 2026 capacity-auction announcement PJM reported that its auction for the 2028-2029 delivery year secured 138,318 megawatts of accredited generation capacity and demand response. Including an additional 10,864 megawatts committed through separate Fixed Resource Requirement arrangements, the total reached 149,182 megawatts, approximately 6,831 megawatts below the region’s stated reliability requirement.

PJM also reported that the auction clearing price reached the federally approved cap of $325 per megawatt-day, approximately 2.5 percent below the previous auction’s price cap of $333.44.

PJM identified growing electricity demand, including projected consumption by large data centers, as one factor influencing its planning requirements.

The reported shortfall concerns PJM’s planning standard for maintaining adequate electricity reserves. It does not, by itself, establish that South Jersey communities will experience electricity interruptions.

PJM’s Perspective on Electricity Supply and Reliability

While participating governors have raised concerns about electricity affordability and PJM’s decision-making structure, the grid operator has identified several factors contributing to higher capacity prices and tightening electricity supplies.

In its July 2024 capacity-auction report PJM attributed rising capacity prices partly to generator retirements, increasing projected electricity demand, and federally approved market reforms designed to account more accurately for reliability risks, including extreme weather.

PJM also characterized higher capacity prices as an economic signal intended to encourage investment in additional electricity resources.

In its July 2026 announcement, PJM acknowledged that the region’s committed electricity resources fell short of its reliability requirement. The organization outlined efforts to accelerate connections for new generation, address near-term reliability needs, and develop approaches for accommodating large electricity users, including data centers.

PJM stated that it remained focused on maintaining transparent markets, improving its processes for connecting new electricity resources, and working with states and industry participants to increase available supply.

These explanations illustrate that electricity affordability and reliability involve questions of generation investment, market design, regulatory requirements, and the pace of growing demand.

Thirteen States Join the Collaborative

According to the Collaborative’s official October 8 announcement, the memorandum was signed by the governors of New Jersey, Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia, along with the mayor of Washington, D.C.

The participating governments represent different political parties and energy-policy priorities, but the agreement identifies shared interests in regional electricity affordability, reliability, and state participation in PJM’s decision-making.

Under the agreement, the Collaborative will coordinate state positions on PJM proposals, share technical expertise, and organize engagement with PJM, the Federal Energy Regulatory Commission, state public utility commissions, and other organizations involved in regional electricity policy. These coordinating functions are also described in the Collaborative’s earlier joint statement of intent.

The organization builds on discussions among PJM-region governors that began at a September 2025 gathering in Philadelphia. Participating governors subsequently coordinated on regional electricity issues before formally establishing the organization through the October 8 memorandum.

Sherrill described cooperation across state and party lines as necessary to address electricity affordability and regional grid reliability.

“We are facing an energy affordability crisis,” Sherrill said in the official announcements, emphasizing the need for coordinated action to reduce costs and support the region’s electricity infrastructure.

Pennsylvania Governor Josh Shapiro expressed concerns about the pace at which new electricity generation has entered the regional system, while Indiana Governor Mike Braun emphasized the importance of cooperation among states connected through the same grid.

Their statements reflect the participating governors’ positions. The agreement establishes a mechanism for cooperation and joint advocacy rather than granting the governors direct authority to establish PJM market rules or electricity rates.

What Could Change for South Jersey Residents?

The Collaborative’s potential significance for South Jersey lies in how regional electricity decisions may affect consumers, businesses, and public institutions over time.

For households, electricity supply costs are one component of monthly bills. Changes in regional capacity and energy markets can influence those costs, although the effect depends on utility procurement arrangements, regulatory decisions, and other charges.

For businesses, electricity is an operating expense that can influence budgets and financial planning. The importance of that expense varies considerably among industries, from small retail establishments to energy-intensive manufacturing operations.

Public schools, hospitals, municipal governments, and other institutions also purchase electricity to maintain their facilities and services. Changes in electricity expenses can therefore affect organizational budgets, although their individual costs and purchasing arrangements differ.

Reliability represents a separate consideration. Regional planning decisions influence the availability of electricity resources, while local outages may also result from weather, equipment failures, and distribution-system conditions outside PJM’s direct control.

Whether the new organization produces measurable changes will depend on the proposals advanced and the responses of PJM, federal regulators, and other participating organizations.

What Comes Next?

The establishment of the PJM Governors’ Collaborative creates a formal forum for state governments to exchange information, develop common positions, and participate more collectively in regional electricity policy discussions.

Its immediate responsibilities center on coordination and advocacy. Changes to PJM’s market rules and governance would require action through the applicable decision-making and regulatory processes.

For South Jersey, the questions extend beyond future electricity bills. They include whether the region will have sufficient generating resources to meet growing demand, how regional transmission planning will support reliability, and whether greater state participation in PJM’s decision-making will produce meaningful changes for consumers and communities.

The Collaborative’s effectiveness will become more apparent as participating states identify specific proposals, PJM responds, and regulators consider any resulting recommendations.

RELATED ARTICLESMORE FROM AUTHOR