Bill Impact Analysis of Four NJ Policies Addressing Supply Costs
Evergreen Collaborative
Project completed.
Synapse calculated high-level estimates of annual electric bill savings achievable for New Jersey residential customers from four policies on behalf of Evergreen Action. These included (1) a policy where all electricity system costs posed by data centers are paid for by data centers, (2) a requirement for transmission owners operating in New Jersey to participate in PJM so they are no longer entitled to the 0.5 percent return on equity (ROE) adder incentive, (3) PJM’s temporary capacity auction price collar, and (4) increased Board of Public Utilities (BPU) oversight of transmission projects that currently escape meaningful regulation.
We found the following:
- A data center tariff requiring data centers to pay for their own costs may save residential customers $140 per customer per year or $910 million statewide per year.
- Removing the ROE adder may save residential customers $5 per customer per year or $20 million statewide per year.
- The capacity auction price cap in effect for the 2026/2027 and 2027/2028 auction years has saved residential customers $130 per customer per year or $440 million statewide per year. It will likely save a similar amount for the 2028/2029 and 2029/2030 delivery years.
- Savings could vary substantially with enhanced BPU oversight of supplemental transmission projects. It is challenging to predict how many projects could be avoided or how much costs could be reduced with increased oversight, as there is very limited precedent to rely on for this portion of the analysis. However, if we assume that enhanced oversight reduces costs by 10 percent, the policy would save residential customers an average of $8 per customer per year or $30 million statewide per year. If we assume that enhanced oversight reduces costs by 25 percent, the policy would save residential customers an average of $20 per customer per year or $80 million statewide per year.