PSEG Chair and CEO Ralph LaRossa, in a public statement Tuesday morning about surging energy prices, said the current rules and regulations around energy generation and delivery are not capable of providing what the state needs — and that the state must take action.
“This is not a blip,” he said. “It’s a warning light that supply is too tight and that regional market rules are not delivering — and not capable of delivering — the power New Jersey customers need.
“New Jersey needs to take matters into its own hands and develop a pragmatic, integrated energy plan that balances the reliability of the system, affordability for customers and public policy needs of the state.”
LaRossa, speaking on the matter for the first time outside of earnings, made his comments a day after numerous governors in the Mid-Atlantic and Northeast region met in Philadelphia to discuss PJM Interconnection, the grid operator for New Jersey, 12 other states in the region and Washington, D.C.
LaRossa did not attend the meeting; neither did Gov. Phil Murphy, who was on an economic mission trip in India.
The PJM power grid holds the largest concentration of energy-intensive data centers in the world. PJM is governed by a board of managers, and its voting members include transmission line owners and independent power plant operators.
States do not have a vote in the decision-making process, which is upsetting to governors in the region, many of which feel PJM is not attentive to their needs.
“We need to be thinking about consumers and their costs, something that PJM, I think, doesn’t really spend a whole lot of time focused on,” Pennsylvania Gov. Josh Shapiro told reporters after delivering the keynote address.
Who is responsible for the rapid rise in rates is complicated and confusing. Polls indicate many in New Jersey blame utility companies for the increased costs. LaRossa pushed back on that, saying PSEG and other utility companies are limited in what they can do.
“New Jersey utilities are not currently allowed to build power generation,” he said. “We simply pass energy supply costs on to customers with no mark up.”
LaRossa said part of the reason for the rising costs is a change in consumer habits —combined with public policy in the state.
“Population growth, changing consumer needs including EVs, and the surge of new technologies like artificial intelligence and data centers are pushing energy consumption upward at the same time power plants are being retired and not replaced,” he said. “As a result, New Jersey imports between 40-50% of its power, which is only projected to worsen.
“Now consumers are paying higher energy costs, strained by the energy supply-demand imbalance.”
LaRossa said PSEG is ready and eager to work with all stakeholders.
“PSEG remains committed to partnering with policymakers and stakeholders to achieve solutions and recommends that regulated utilities be allowed to participate in providing generation solutions, that put reliability and affordability for New Jersey customers first,” he said.
