Charge the rich more for electricity? NJ weighs equity options

🔴 New Jersey wants to make electric bills more equitable

🔴 One recommendation follows in California's footsteps

🔴 Republican state senator says it's a recipe for disaster

TRENTON — New Jersey wants to make electric bills more equitable.

On Wednesday, the state Board of Public Utilities accepted a report from the Brattle Group on how to give more assistance to low-income New Jersey households.

Commissioned in 2024, the report comes at a time when state ratepayers are bracing for monthly bills to skyrocket on June 1.

"Nobody wants to see their bills go up.  This report is another example of our efforts to manage any rate increases and ensure we are improving our available assistance programs to reach as many ratepayers in need as best we can," BPU President Christine Guhl-Sodovy said.

It made several recommendations, one of which has caught the attention of state lawmakers. While the report has been accepted, its recommendations have not been approved.

However, the BPU could implement any of them at future monthly meetings.

Expanding benefits to help with electric bills

The Universal Service Fund is one program to help New Jersey residents pay their electric bills. It offers benefits to low-income households.

According to BPU Chief Economist Ben Witherell, the USF aims to make it so participating households spend no more than 2% of their income on electric bills and 2% on gas bills.

But BPU President Christine Guhl-Sodovy says not enough people are taking advantage.

Only 20% of New Jersey households eligible for the USF are enrolled. Currently, New Jersey residents enrolled in the Supplemental Nutrition Assistance Program are auto-enrolled in the USF.

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The report recommends that the state expand auto-enrollment so more low-income households are enrolled.

Other options to offer more assistance include increasing the maximum benefit per household and adding a new tier so moderate-income households are eligible.

Charge the rich more for electricity?

Another option in the report included a sweeping change: charge income-based fixed rates.

That would mean charging ratepayers different amounts per kilowatt hour depending on how much money they make.

"This was not recommended since the affordability benefits that this option could provide are already achieved through the USF," Witherell said to the board.

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Even the possibility of implementing such a policy caught the attention of state Sen. Anthony Bucco, R-Morris. He said a similar plan had been implemented in California and implementing it in New Jersey would be a disaster.

Bucco said the priority should be to reduce costs for everyone by generating more electricity instead of "gimmicks."

"The reality is simple — if we prioritized reliable, conventional energy sources like natural gas and nuclear to generate more electricity, which it already does for 90  percent of our electricity, everyone’s energy bills would be lower, we’d attract more jobs, and have a more reliable power grid," Bucco said.

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