NJ Electricity Costs Have Surged A Shocking 17 Percent: Here’s Why

NEW JERSEY— New Jersey residents saw their energy costs surge, and experts say that much of the increase is tied to forces beyond state control, even as policies and efficiency programs offer some relief. But that is little comfort for residents shouldering the burden.

New Jersey residents paid less than the national average for electricity in 2024, but that changed this year.

In 2024, the average household paid $128.13 per month for 662 kilowatt-hours, slightly below the U.S. average of $142.26, according to a Patch analysis of U.S. Energy Information Administration data.

Then, in January, prices climbed nearly 17 percent, pushing monthly bills up by roughly $260 annually, even as usage remained moderate.

Clinton J. Andrews, a Rutgers University professor and energy policy researcher, said rising electricity prices reflect structural and regional realities.

Andrews explained that over the past few decades, there has been a strong focus on cutting back on polluting energy sources like natural gas while expanding the use of solar power.

Nuclear plants were kept running as long as possible.

Meanwhile, efforts were also made to promote energy efficiency, with various measures, such as building codes and appliance standards, helping homes and businesses use energy more responsibly.

“For example, it’s a lot easier to buy an LED lightbulb in New Jersey,” Andrews said.

The landscape is changing, Andrews said, driven by three major forces.

He cited fuel switching, such as electrifying space heating and the trending demand of electric vehicles, as two long-term factors to price increases.

However, the primary driver has been the rapid expansion of large data centers that support artificial intelligence, he said.

“But that’s not an individual decision,” Andrews said, “In our region, we have just enough capacity to meet demand, so we need to build more power plants, which drives up electric bills.”

New Jersey operates more than 80 data centers, with more planned or under construction, according to South Jersey Climate News research.

Natural gas dependence compounds the problem.

Global events like the war in Ukraine and rising liquefied natural gas prices create spikes in electricity costs

“Whenever natural gas prices get high because of global events, that gets echoed to electricity prices,” he said.

But Andrews emphasized that households can still control some costs through conservation and efficiency investments.

If your house doesn’t have insulation, if you replace old lights with LEDs, if you upgrade to a heat pump, those are smart investment choices.

“You can manage your own consumption, even if prices are rising,” he said.

State policy has moved to address both supply and demand.

Governor Mikie Sherrill has frozen utility rate hikes, declared a state of emergency on electricity, approved multiple solar and battery storage projects and expanded incentive programs to increase in-state power generation.

“By strengthening the Garden State Energy Storage Program, we’re cutting through unnecessary delays and opening the door to more competitive, cost-effective storage projects,” Sherrill said.

However, because New Jersey participates in a regional power market, coordination with neighboring states is critical, Andrews noted.

“The governor needs to have her attorney general talk with other states’ attorney generals,” Andrews said.

Temporary measures like rate freezes can offer relief, but carry risks.

Utilities are increasingly investing in underground power lines as a way to strengthen distribution systems, even though the upfront costs are significantly higher than overhead lines.

Burying lines protects them from storms, high winds and falling trees, reducing the frequency and duration of outages and improving overall reliability.

While installation can be expensive due to excavation, materials and labor, underground systems typically require less maintenance and are less vulnerable to weather-related damage.

Over time, these benefits can help offset initial costs by lowering repair expenses and minimizing disruptions to customers. “The danger is that if we get so freaked out about pricing, we stop investing in systems that will save us down the line,” Andrews said.

Here are the current operational, and planned, data centers in New Jersey:

Atlantic County

• Continent 8 Atlantic City DC3
• Continent 8 Atlantic City DC2

Bergen County

• Whitelabel IT Solutions Data Center
• Hackensack HQ (Garden State Backup)
• 410 Commerce Blvd (EWR14)
• US Liquidity Center (USLC)
• 365 Data Centers – Carlstadt
• 11:11 Systems Carlstadt

Camden County

• Cogent Data Center – Pennsauken

Cumberland County

• Data One / Nebius (Under Construction)

Essex County

• DataBank – Downtown Newark
• Equinix NY1
• Crown Castle Newark (NJ1)
• 165 Halsey Street
• BT Nutley
• ON3 Data Center (Planned)
• Lumen Newark Data Center

Gloucester County

• Earth Station 76 (Planned)
• Williamstown AI Data Center (Speculative)

Hudson County

• DataVerge NJ
• 365 Data Centers – Weehawken
• Equinix NY7
• Centersquare – New York EWR1
• One Evertrust Plaza
• Newport Financial Center
• QTS Jersey City 1 DC1
• Centersquare – New York EWR2-C,D
• Centersquare – New York EWR2-A,B
• Equinix NY6
• Lumen Weehawken 1
• Lumen Jersey City
• Equinix NY4
• CoreSite Secaucus (NY3)
• Centersquare – New York EWR5-A
• Equinix NY2
• Colocation America NJDC2
• Equinix NY5
• H5 Data Centers New Jersey
• InterServer TEB2
• InterServer TEB4
• Evocative EWR1
• Equinix NY3
• 247Rack Secaucus NY2

Mercer County

• QTS East Windsor 1 DC1
• Princeton Nurseries Data Center (Planned)
• Continuity Centers Princeton

Middlesex County

• Lumen South Brunswick 1
• Iron Mountain Data Centers NJE-1
• 3 Corporate Place (EWR11)
• 365 S. Randolphville Road (EWR12)
• 1115 Centennial Avenue (EWR19)
• DataBank EWR2 – Piscataway
• Digital Fortress New Jersey
• Constant Hosting PNJ1
• Centersquare – New York EWR3-A
• ReliableSite NYC Metro
• QTS Piscataway 1 DC1
• Hammer Piscataway Data Center
• ColoCrossing NJ1
• 24Shells NJ1
• Equinix NY11

Monmouth County

• Tata Communications Wall NJ
• NJFX Data Center

Morris County

• Cologix NNJ3
• Cologix NNJ2
• Cologix NNJ1
• Cologix NNJ4

Passaic County

• Colocation America NJDC1
• CyrusOne Data Centers – NYM2 – Totowa
• 100 Delawanna Ave
• 2 Peekay Drive – EWR21

Somerset County

• Rackspace New York 1
• Rackspace New York 2
• Comcast Clinton (Planned)
• Blue Hill New Jersey
• NYI – New Jersey
• 365 Data Centers – Bridgewater
• CyrusOne NYM1 – Somerset

Sussex County

• Planet Networks Data Center
• Cogent Data Center – Franklin
• Cogent Data Center – Sparta (Planned)

Union County

• CoreWeave Kenilworth (Planned)