Surging electricity prices have risen to the forefront of the New Jersey governor’s race — and could be a key issue in the 2026 midterms.
Nationwide, power prices have risen 6.2 percent over the last year, more than doubling the 2.9 percent inflation rate overall.
In New Jersey, household electricity rates were about 22 percent higher in July than the year before.
In the recent Garden State gubernatorial debate, both candidates mentioned the issue in their opening statements.
“We have an affordability crisis because of property taxes and electricity bills,” said Republican nominee Jack Ciattarelli.
“I am laser focused on driving down your costs, making New Jersey more affordable. I’m going to start by declaring a state of emergency on energy costs,” said Democratic Rep. Mikie Sherrill (N.J.).
Experts say the rising rates are due to both increased demand from new and planned data centers and not enough supply connecting to the grid to meet that demand.
“Governors have limited ability here,” said Arah Schuur, a research specialist at Rutgers University’s Center for Urban Policy Research.
Schuur said that PJM, the regional grid operator that is responsible for providing electricity to about a dozen states including New Jersey, “really holds the reins when it comes to bringing on new supply.”
“What PJM does is they run an auction, a competitive auction, based on forecasted demand” for electricity, said Frank Felder, principal at Independent Electricity Consultants and former director of the Rutgers Energy Institute.
Felder said that the potential for new, power-hungry data centers to be built is driving up forecasted demand, and therefore electric prices.
“There’s just been a slate of proposed data centers,” he said.
“The proposals can be the size of a large power plant, if not bigger. So those forecasts are included in this auction, and if you increase demand for … [an] almost fixed supply, then prices go up,” he added.
Another piece of the puzzle is the timeline for getting new power on the grid, which can be lengthy as projects await financing and approval to connect.
“Economics, policy, PJM’s regulations, [have] all caused supply constraints,” Schuur said.
It’s also something Sherrill’s campaign is posting videos about, including criticism of PJM.
Grid operators such as PJM are typically little-known among the general public and don’t often make the political discourse unless there’s a major issue, such as when power failures brought Texas’s ERCOT to the spotlight in the aftermath of a deadly 2021 winter storm.
“268 gigawatts of power is just waiting to be added to the grid … and PJM has taken far too long to add it, taking up to six years to permit and add these new projects to our grid,” Sherrill said in a video posted in May.
However, PJM has since said it is making progress to cut down on the projects that had been waiting in line.
“There is plenty of supply that has made it through our generation interconnection queue that can connect to the grid,” Asim Haque, senior vice president of governmental and member services for PJM Interconnection, wrote in a recent op-ed.
“A queue transition backlog that began with over 200 GW of projects is now down to just 46 GW,” Haque added.
PJM spokesperson Dan Lockwood told The Hill in an email that the grid operator is “working with our stakeholders on multiple fronts to alleviate this supply/demand imbalance.”
“This includes reforming our markets and the process for interconnecting new resources to the system, working to establish new rules for integrating large loads, increasing opportunities for demand flexibility and ensuring greater accuracy in load forecasting,” Lockwood said.
While both Sherrill and Ciattarelli say there’s a problem, they have different plans to approach it.
Sherrill has called for using “ratepayer protection funds” as a “temporary financial lifeline to help cover the sudden rise in utility costs” and more broadly to push for the buildout of renewable energy, batteries and energy efficiency upgrades.
Ciattarelli, meanwhile, has called for withdrawing from the Regional Greenhouse Gas Initiative, an agreement among Northeast states to cap their emissions. He also said during the debate that he plans to expand nuclear and natural gas plants.
Both candidates have backed putting solar energy on warehouse rooftops.
However, Felder said that actually solving the issue will be complicated, as data centers, which are a major driver of the hikes, could raise prices from inside or outside of New Jersey.
“What New Jersey needs is other states or PJM or both, to say you can’t interconnect a large data center unless there’s … either sufficient supply at PJM or you brought your own meaningful generation and demand response,” he said, referring to data centers supplying their own power.
Meanwhile, the political implications of increasing electric bills are stretching beyond New Jersey and this year.
Democrats running for GOP-held seats in particular see power prices as a way to go after their opponents, especially after congressional Republicans’ “big, beautiful bill” slashed incentives for renewable energy.
“We’ve had direct consequences right here in Colorado’s 8th already,” said Shannon Bird, one of the Democrats running to try to unseat Rep. Gabe Evans (R). Bird particularly pointed to a halted battery plant, as well as grants canceled by the Trump administration for states such as Colorado.
“I will be fighting to bring more of this investment back into our state,” she said.
Beth Davidson, who is running for the seat currently held by Rep. Mike Lawler (R-N.Y.) similarly criticized his vote to cut incentives for renewable power.
“Energy costs and utility bills are, yes, a frequent topic of discussion and a complaint I hear from my constituents,” Davidson said.
“I’m already talking to voters about it every day. …it will certainly be some clear focus of my campaign,” she said.
Meanwhile, Republicans are seeking to turn the issue around on Democrats.
“From shutting down nuclear power plants to banning natural gas hookups and imposing unrealistic mandates under the Climate Leadership and Community Protection Act, those decisions have driven up costs for working families,” said Lawler spokesperson Ciro Riccardi in an email.
“Utility rates in blue states are the direct result of the failed leadership, misplaced priorities, reckless spending, and radical policies of Governors like Hochul and Polis,” said National Republican Campaign Committee Spokesman Mike Marinella, referring to New York’s Kathy Hochul and Colorado’s Jared Polis.
