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If you live in Jersey City or Hoboken, your summer electric bill is about to get even uglier. Thanks to the latest results from PJM Interconnection’s annual capacity auction, New Jersey residents—already reeling from a 20-percent spike in June—are staring down another hike next summer.
PJM, the grid operator responsible for electricity in New Jersey and 13 other states, just announced that wholesale capacity prices—the fees power providers charge to ensure enough juice flows during peak demand—have surged to $329.17 per megawatt-day. That’s a 22-percent jump from last year’s already record-setting rate.
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What does that mean for your wallet? Expect a 1.5-percent to 5-percent increase on your electric bill in 2026, depending on how utilities pass along those costs. And yes, that’s on top of the roughly 20-percent hike that slammed New Jersey households last month following last year’s auction.
While the price hit the cap set in a legal settlement with Pennsylvania Governor Josh Shapiro, who accused PJM of market manipulation, it would’ve been even worse without it. PJM admitted the clearing price would have hit nearly $389 without the cap.
These soaring prices are driven by a classic case of demand outpacing supply. With power-hungry data centers cropping up across the region and more homes going electric, PJM says demand for power is ballooning. Meanwhile, new power plants, especially cleaner ones, are slow to come online, thanks to a backlog of over 63,000 megawatts of projects stuck in regulatory limbo.
To be fair, PJM insists things are improving. This year’s auction finally saw an uptick in new generation capacity—about 2,669 MW’s worth, the first increase in four years—and several aging plants walked back retirement plans. But the margin between supply and demand is still razor thin. The grid barely met its reliability requirement, clearing just 139 MW above the minimum.
And if you're wondering whether solar or wind are swooping in to save the day, not quite yet. Natural gas still dominates the region’s energy mix at 45-percent, with coal and nuclear close behind. Solar is even worse, at just 1-percent.
Unless regulators fast-track cleaner energy or overhaul how the grid works, don’t expect your electric bill to cool down anytime soon. You might want to start budgeting for those summer surges—again.