New Jersey Electricity Rates: Cut Your Bill

New Jersey electricity bills are punishing homeowners right now. The average residential rate sits at roughly 23 cents per kilowatt-hour in early 2026 — about 33% above the national average of 17.24 cents. That translates to monthly bills of $150 to $200 depending on your utility and usage, and summer months push those numbers even higher. Governor Mikie Sherrill declared a State of Emergency on utility costs on her very first day in office in January 2026. That tells you everything about how serious the situation has become.

But here's the thing most New Jersey residents do not realize: you live in a deregulated electricity state. You have the right to shop for a cheaper electricity supplier, and switching is completely free. Between supplier shopping, time-of-use rates, the state's strong solar and community solar programs, and billions in efficiency incentives, there are real paths to lowering your bill. This guide walks you through all of them.

How the New Jersey Electricity Market Works

New Jersey deregulated its electricity market in 1999 under the Electric Discount and Energy Competition Act. That law split the old utility monopoly into two distinct functions that show up as separate charges on your bill.

Supply (generation) is the cost of producing the electricity itself. This is the competitive, "shoppable" portion. You can either accept the default rate from your utility or choose a third-party supplier who might charge less.

Delivery (distribution) covers the poles, wires, transformers, and crews that physically bring power to your home. This portion is regulated by the New Jersey Board of Public Utilities (BPU) and stays the same no matter which supplier you choose. Switching suppliers does not affect your reliability — the same utility delivers your power regardless.

If you do not actively choose a supplier, you receive what's called Basic Generation Service, or BGS. The BGS rate is set through an annual auction — a descending-clock process where power generators bid to supply electricity for the coming year. The 2026 auction, the 25th annual, was certified by the BPU on February 12, 2026, setting rates effective from June 1, 2026 through May 31, 2027. This auction process is unique to New Jersey and directly determines what roughly 4 million households pay for electricity supply.

The BPU oversees the entire system. It regulates the four electric distribution companies, licenses third-party suppliers, administers the NJ Clean Energy Program, and runs NJ Power Switch at njpowerswitch.com — the state's official comparison tool for shopping suppliers.

If you want a deeper understanding of how supply and delivery charges appear on your statement, our guide on how to read your electric bill and spot overcharges breaks it down line by line.

What New Jersey Residents Actually Pay

Let's look at the real numbers. The average residential electricity rate in New Jersey hit 23.13 cents per kWh in January 2026 — up sharply from 19.34 cents in 2024, an increase of roughly 19% in just one year. For context, rates were relatively stable around 15 to 17 cents per kWh from 2019 through 2023 before spiking.

Rate trend over recent years:

On a monthly basis, the typical New Jersey household uses about 650 kWh and pays around $150 to $180, depending on which utility serves them. But that "depending on which utility" part matters enormously. Your bill can vary by more than $60 per month based purely on where you live.

How the Four Utilities Compare

New Jersey has four electric distribution companies, and the cost differences between them are striking. Here's what a typical monthly bill looks like for 650 kWh of usage under the 2026 BGS rates:

That is a $64 per month gap between the cheapest utility (JCP&L at $137) and the most expensive (ACE at $202) for identical usage. Over a year, an ACE customer pays roughly $770 more than a JCP&L customer. These differences come from variations in distribution infrastructure costs, transmission charges, and legacy agreements — not just the supply rate.

PSE&G is the dominant utility, serving 2.2 million electric customers across the most densely populated parts of northern and central New Jersey. If you live in the state, there's a good chance PSE&G is your utility. The good news from the 2026 auction is that PSE&G bills actually decreased slightly, by $3.23 per month.

Each utility publishes a "Price to Compare," or PTC — the BGS supply rate that serves as your benchmark when shopping for a third-party supplier. If a supplier offers a rate below your PTC, you save money. You can find your utility's current PTC on their website or on your monthly bill.

Why New Jersey Electricity Rates Are So High

Understanding why rates are elevated helps you make smarter decisions about where to focus your savings efforts. There are six main drivers.

Data Centers Are Driving Up Capacity Costs

New Jersey is part of the PJM Interconnection, the regional grid operator covering 13 states and Washington, D.C. PJM runs a capacity market where power plants are paid to be available during peak demand periods. In 2025, capacity prices exploded — jumping roughly 9 times, from $28.92 per megawatt-day to $269.92 per megawatt-day. Another 22% increase followed for 2026-2027.

The primary culprit: data centers. The explosive growth of AI and cloud computing is driving massive electricity demand across the PJM region. Data centers are responsible for 63% of the capacity price increase, equivalent to $9.3 billion in costs passed to all PJM customers — including every New Jersey household. Data center electricity demand is projected to grow by 30 gigawatts between 2025 and 2030, and there is no sign of this trend slowing.

Supply Is Tightening While Demand Grows

Generator retirements have reduced available supply. Coal plants closed in 2022, and the Oyster Creek nuclear station retired in 2018. At the same time, PJM's interconnection backlog — the queue of proposed new power plants waiting to connect — has swelled to roughly 140 GW. New generation is simply not being built fast enough.

Meanwhile, demand is climbing. PJM forecasts summer peak demand growing at over 3% annually and winter demand at over 4% annually, driven by data centers, EV adoption, building electrification, and general economic growth.

Infrastructure and Policy Costs

Aging grid infrastructure requires billions in upgrades for storm hardening and modernization. Transmission congestion limits how much cheaper power can flow into New Jersey from other regions. On top of that, every NJ electric bill includes a Societal Benefits Charge of roughly 3% that funds the NJ Clean Energy Program, the Universal Service Fund for low-income assistance, and nuclear plant subsidies through Zero Emission Certificates that keep the Salem and Hope Creek reactors running.

Taxes and Cost of Business

New Jersey's Sales and Use Tax applies to electricity, and the state's generally high cost of doing business flows through to utility operating costs. Combined with the policy surcharges, these add meaningful dollars to every bill.

The Political Response

The severity of the rate crisis prompted Governor Sherrill to issue two executive orders on January 20, 2026 — her first day in office. Executive Order No. 1 directed the BPU to provide Residential Universal Bill Credits to offset supply cost increases by July 1, 2026, and froze further rate hikes. Executive Order No. 2 ordered a massive expansion of in-state power generation, including solar and battery storage in the short term and nuclear in the long term. She also ordered a review of reducing the Societal Benefits Charge.

Prior to Sherrill's action, the BPU had already approved $100 in electric bill credits for residential customers in August 2025. Whether these measures produce lasting relief remains to be seen, but they signal that Trenton is taking the problem seriously.

How to Shop for an Electricity Supplier

Shopping for a supplier is the most direct action you can take to lower your bill. Here's how to do it step by step.

Step 1: Find your Price to Compare. Look at your most recent electric bill or visit your utility's website. The PTC is the supply rate you're currently paying under BGS default service. This is your benchmark — any supplier offer needs to beat this number for you to save money.

Step 2: Visit NJ Power Switch. Go to njpowerswitch.com, the BPU's official comparison tool. Enter your zip code and utility to see available supplier offers. You can also visit individual supplier websites directly.

Step 3: Compare carefully. Look at these factors for each offer:

• Fixed vs. variable rate — Fixed-rate plans lock your supply rate for the contract term. Variable-rate plans can change monthly and may spike above BGS rates. For most households, fixed-rate plans offer better predictability.
• Contract length — Plans range from month-to-month to multi-year terms.
• Cancellation fees — Your utility charges nothing to switch, but some suppliers charge early termination fees if you leave before the contract ends.
• Renewable content — Some suppliers offer 100% wind or solar plans if that matters to you.

Step 4: Enroll. Once you've chosen a supplier, enroll through their website or by phone. Your utility handles the switch automatically. You'll still receive one bill from your utility — the supply charge line will simply reflect your new supplier's rate instead of the BGS rate.

Step 5: Monitor. Check your first couple of bills to confirm the rate matches what you signed up for. If you're on a variable plan, watch it monthly.

Cautions When Switching

Variable-rate plans deserve extra scrutiny. They may start with an attractively low rate but can spike above BGS during high-demand periods. Some suppliers use aggressive door-to-door sales tactics — the BPU has consumer protection rules against misleading practices, but you should still verify any offer independently before signing.

Always compare against your PTC, not just against other supplier rates. And if you're considering time-of-use rates, PSE&G offers a risk-free 12-month TOU trial where they'll credit you the difference if you do not save money. JCP&L also offers a two-tier time-of-day rate with on-peak weekday hours and off-peak evenings and weekends.

The Offshore Wind Situation

New Jersey's offshore wind program was supposed to be transformative — 11,000 megawatts by 2040, the most aggressive program in the country. Instead, it's effectively stalled.

Orsted cancelled its Ocean Wind 1 and Ocean Wind 2 projects, which would have totaled over 2,200 MW of capacity. The company paid $125 million in penalties to the state. Rising costs, supply chain disruptions, and higher interest rates made the projects financially unviable at the prices originally agreed to. The Atlantic Shores project (1,510 MW) is also stalled after Shell pulled out as co-developer and the BPU declined to award a new power purchase agreement.

Federal headwinds have made things worse. The Trump administration paused or rescinded offshore wind leases and permits, and the BPU delayed offshore wind transmission infrastructure by more than two years. As of early 2026, the entire NJ offshore wind program is effectively paused.

What this means for your bill: the individual projects would have added only $1 to $4 per month per household. But the cancellations and delays may paradoxically increase costs over the long run by keeping New Jersey dependent on natural gas and the tight PJM capacity market. Some infrastructure costs already incurred may still be passed to ratepayers.

Solar Options in New Jersey

Despite the challenges, New Jersey remains one of the best states in the country for solar — and that's true even after the federal 30% solar tax credit expired on December 31, 2025.

Here's why the math still works:

High electricity rates drive fast payback. At 23 cents per kWh, every kilowatt-hour your panels produce is worth significantly more than in a state paying the national average. Net metering in New Jersey is 1:1 at the full retail rate — any excess solar you send to the grid earns credits at approximately 26 cents per kWh in PSE&G territory.

State incentives are strong. The Successor Solar Incentive (SuSI) program pays residential solar owners $85 per megawatt-hour through the Administratively Determined Incentive (ADI), locked in at registration for a full 15-year term. A typical 10 kW system producing 12,000 kWh per year earns roughly $1,020 annually in ADI payments alone.

Tax exemptions are extremely valuable in high-tax New Jersey. Solar equipment is exempt from the 6.625% state sales tax, and solar installations receive a 100% property tax exemption — your home value increases but your property taxes do not. Neither exemption has an expiration date.

If you're considering panels, our solar panel buyer's guide walks through the selection process in detail.

Community Solar: Go Solar Without Panels

If your roof is not suitable for solar — maybe it faces the wrong direction, has too much shade, or you rent your home — New Jersey's Community Solar Energy Program is an excellent alternative. The program was made permanent in 2023 and expanded by 250 MW in April 2025.

Here's how it works: you subscribe to a share of a local solar farm and receive bill credits for the electricity it produces. Over 28,000 New Jersey residents have enrolled, collectively receiving $37 million in bill credits with net savings exceeding $7 million. The program guarantees a minimum 15% discount on community solar credits, and 51% of capacity is reserved for low-to-moderate income households.

No rooftop, no installation, no upfront cost. You simply sign up and start saving. Our community solar guide explains the enrollment process.

NJ Clean Energy Rebates and Efficiency Programs

New Jersey funds substantial efficiency programs through the Clean Energy Program at njcleanenergy.com. Two programs stand out for homeowners.

Whole Home Energy Efficiency Program (2026): This offers up to $7,500 in cash-back incentives and up to $25,000 in zero-interest financing for home energy improvements. You receive a $2,000 base rebate for achieving 5% or more in projected total energy savings, with an additional $200 for each percentage point above 5% — up to 32% savings for a maximum $7,400 rebate. Eligible improvements include insulation, HVAC upgrades, and water heating systems. Participants can save up to 30% on their energy bills.

Home Performance with ENERGY STAR: This program starts with a professional energy audit that identifies the highest-impact improvements for your specific home, then connects you to rebates and financing. Eligible upgrades include heat pumps, heat pump water heaters, insulation meeting IECC standards, and ENERGY STAR windows and doors.

A smart thermostat is one of the simplest and most cost-effective upgrades, typically cutting heating and cooling costs by 10-15%. Pairing one with a home energy monitor gives you real visibility into where your electricity is going — and where to focus your next efficiency investment. For a comprehensive approach, our whole-home electrification guide lays out the full roadmap.

Individual utilities also offer their own rebate programs for smart thermostats, heat pumps, ENERGY STAR appliances, and efficient water heaters. Check your specific utility's website for current offerings.

Low-Income Assistance Programs

If you're struggling to pay your electric bill, New Jersey has several programs that can help.

Universal Service Fund (USF): Monthly utility bill credits of $20 to $200 on electric and gas bills. Eligibility requires household gross income at or below 60% of State Median Income. The application period runs from October 1, 2025 through June 30, 2026, on a first-come, first-served basis. Apply online at energyassistance.nj.gov or call 1-800-510-3102.

LIHEAP (Low Income Home Energy Assistance Program): A federal program administered by NJ's Department of Community Affairs that provides heating assistance grants. Same application process and contact information as USF.

Comfort Partners (Weatherization): Free home energy improvements including insulation, air sealing, lighting, and appliance replacement for households with income within 250% of the Federal Poverty Level. Administered by PSE&G, JCP&L, and ACE. This program does not just lower your current bill — it permanently reduces your energy consumption.

Winter Termination Program: From November 15 through March 15 each year, qualifying residential customers cannot have their electricity, gas, or water disconnected. Eligibility covers LIHEAP recipients, SNAP recipients who self-certify hardship, and individuals unable to pay due to circumstances beyond their control. Important: this is shutoff protection only, not bill forgiveness. Customers still owe accumulated charges and should make good-faith payments to avoid large balances after March 15.

How to get started: Call NJ 211 (dial 2-1-1) to reach the Home Energy Assistance Hotline, or call 1-800-510-3102 directly for LIHEAP and USF information.

Frequently Asked Questions

Why is my electricity bill so high in New Jersey?

New Jersey rates average about 23 cents per kWh — roughly 33% above the national average. The biggest drivers are skyrocketing PJM capacity market costs (data centers are responsible for 63% of the increase), tightening power supply from plant retirements, billions in grid infrastructure upgrades, and policy surcharges including the approximately 3% Societal Benefits Charge. The situation was severe enough that Governor Sherrill declared a State of Emergency on utility costs in January 2026.

Can I choose my electricity supplier in New Jersey?

Yes. New Jersey has been a deregulated electricity market since 1999. You can shop for a third-party supplier at njpowerswitch.com, the state's official comparison tool. Compare offers against your utility's Price to Compare. Switching is free from the utility side, and it does not affect your service reliability — the same utility delivers your power regardless of which supplier you choose.

What is the Price to Compare, and where do I find it?

The Price to Compare (PTC) is the supply rate you currently pay under Basic Generation Service — the default utility rate set by the annual BGS auction. You can find it on your monthly electric bill or on your utility's website. If a third-party supplier offers a rate below your PTC, switching saves you money. The PTC changes periodically and varies by utility.

Which New Jersey utility has the lowest bills?

JCP&L customers pay the lowest average monthly bills at roughly $137 per month for 650 kWh of usage. PSE&G falls in the middle at about $180, and Atlantic City Electric customers pay the most at approximately $202. These differences reflect distribution infrastructure costs, transmission charges, and regional factors — not just the supply rate.

Is solar worth it in New Jersey without the federal tax credit?

Yes. Even without the 30% federal Investment Tax Credit (which expired December 31, 2025), New Jersey remains one of the strongest solar markets in the country. High electricity rates of roughly 23 cents per kWh mean fast payback on your investment. The state ADI incentive pays $85 per MWh for 15 years. Net metering credits excess solar at the full retail rate. And NJ's sales tax and property tax exemptions on solar are both permanent. Typical payback periods run 8 to 10 years, and community solar offers a zero-installation alternative with guaranteed savings of 15% or more.

What happened to New Jersey's offshore wind projects?

Orsted cancelled Ocean Wind 1 and 2, paying $125 million in penalties. Rising costs, supply chain problems, and higher interest rates made the projects financially unworkable. The Atlantic Shores project stalled after Shell pulled out as co-developer and the BPU declined to award new contracts. Federal policy changes have further delayed all NJ offshore wind development. The entire program is effectively paused as of early 2026.

What help is available if I cannot afford my electric bill?

Apply for the Universal Service Fund (monthly credits of $20-$200) and LIHEAP (heating grants) at energyassistance.nj.gov or by calling 1-800-510-3102. The Comfort Partners program provides free weatherization improvements. The Winter Termination Program prevents shutoffs from November 15 through March 15 for qualifying households. Call NJ 211 for assistance navigating these programs.

Will New Jersey electricity rates go down?

The 2026 BGS auction results show rates stabilizing, with changes ranging from a 1.8% decrease to a 1.6% increase depending on utility. Governor Sherrill's executive orders aim to provide bill credits by July 2026 and expand power generation capacity. However, structural factors — PJM capacity costs, data center-driven demand growth, and limited new supply — suggest rates will remain elevated for the foreseeable future. The PJM "price collar" mechanism helped moderate 2026 rates, but it is a temporary guardrail, not a permanent fix.

Your Action Plan: Lower Your New Jersey Electric Bill

Here is a concrete plan you can start today.

This week — quick wins:

1. Pull out your most recent electric bill. Find your utility's Price to Compare and your average monthly kWh usage. If you do not know your usage pattern, check your utility's online portal for the past 12 months.
2. Visit njpowerswitch.com and compare third-party supplier offers against your PTC. Focus on fixed-rate plans for price stability. If you find a supplier offering 1 to 3 cents below your PTC, the switch could save you $80 to $230 per year.
3. Check if your utility offers time-of-use rates. PSE&G's TOU plan has a risk-free 12-month trial — if you can shift laundry, dishwashing, and EV charging to overnight hours, the savings can be significant.

This month — efficiency upgrades:

4. Install a smart thermostat if you have not already. It is the single highest-impact, lowest-cost upgrade for most homes, saving 10-15% on heating and cooling.
5. Visit njcleanenergy.com and check eligibility for the Whole Home Energy Efficiency Program. Up to $7,500 in cash-back incentives and $25,000 in zero-interest financing is substantial — the audit alone will identify your biggest energy waste areas.
6. Look into community solar at your utility. A guaranteed 15% or greater discount with no installation required is hard to beat, especially if your roof is not ideal for panels.

This quarter — bigger moves:

7. Get solar quotes if you own your home with a suitable roof. Even without the federal tax credit, NJ's combination of high rates, ADI payments, 1:1 net metering, and tax exemptions makes solar one of the best long-term investments in the state. Our solar panel buyer's guide will help you evaluate proposals.
8. If you're struggling financially, apply for USF and LIHEAP at energyassistance.nj.gov before the June 30, 2026 application deadline. Monthly credits of $20 to $200 can make a meaningful difference.

Ongoing:

9. Set a calendar reminder to review your supplier rate every 12 months. Rates change, and the best deal today will not be the best deal next year.
10. Track your usage with a home energy monitor to catch waste and measure the impact of any changes you make. For tips on cutting consumption dramatically, our guide on how to cut your electric bill in half covers the full range of strategies.

New Jersey's electricity market rewards informed consumers. The gap between passively accepting your default BGS rate and actively managing your energy costs can easily be $500 to $1,000 per year. With rates at historic highs and real tools available to fight back — supplier choice, strong solar incentives, generous efficiency rebates, and community solar — the case for taking action has never been stronger.