Your recent article on rising electricity costs was, to say the least, interesting but I must take issue with a number of the writer’s implications.
Our governor has said that “New Jersey isn’t generating even close to enough in-state power to keep costs low ...” That’s correct, but how did we wind up here?
According to the EIA, our politicians in Trenton decommissioned more than 4,000 MW of generation capacity over the last decade; replaced only 35% of it; and about 40% of the replacements are renewables, which are the most expensive form of electricity generation on the planet. Consequently, to meet demand, our utilities had to compete with others to purchase power at higher rates from our grid partner PJM.
Your writer suggests that data center expansion is the antagonist du jour. Yes, they’re a growing part of our technology landscape. According to real estate services company CBRE, current plans for data center growth in 2026 call for about 6,000 MW of power consumption, an increase of less than 1% of our current peak capability. More importantly, data centers are increasingly considering BYOP, bring-your-own-power capabilities to mitigate the impact and the grid connection problems they encounter.
The cost of natural gas is raised as another issue driving up prices. However, according to the EIA, natural gas prices are down 30% year-to-date and down 11% over the last year. It would appear that that’s not the issue, either.
Utility profit margins are another common villain highlighted in the article, suggesting that their after-tax margins were “relatively high” at about 13% and rose to 15% in 2025. The author notes that, “Most industries see single-digit margins. . .” According to SEC filings, for 2025 the four primary electric utilities in NJ had a weighted average after-tax margin of 11.9% versus 13.0%-13.5% for the S&P 500. Other industries such as technology, real estate, financial services and pharmaceuticals commonly deliver after-tax margins from 17% to as much as 40%. So if our utility suppliers are price gouging they’re not doing a very good job of it.
The bottom line is that we, the citizens of New Jersey, allowed this situation to happen and no amount of looking for monsters under the bed will change that.
R.M. Faulkner
Sparta
