Congratulations Governor-elect Sherrill on your election as New Jersey's next governor. During your hard-fought campaign, you made it clear that addressing rising utility costs will be a top priority of your administration. Now that the campaign is over, it's time to get everyone to the table and start working toward real solutions.

Under your leadership, New Jersey has a chance to take on today's rising costs – from taxes to health care to utility costs. It's time to get to the root of what's driving those costs and find practical solutions that work for everyone. We know you're ready to take on this challenge, and PSEG – which serves 2.4 million electric and 1.9 million gas customers across the state – is ready to roll up our sleeves and partner with you to deliver smart, reliable and affordable utility solutions for New Jersey families and businesses.

Our current reality

When it comes to electricity, New Jersey doesn't have enough power generation to meet our growing demand. Some estimate the gap for New Jersey to close, if it wants to control its own destiny, to be as much as 6,000 megawatts. Population growth, new industries, the growing electrification of homes and transportation – including EVs and electric heating – are increasing demand and putting new pressure on the grid. At the same time, supply is tightening because power plants are being retired and not replaced, in New Jersey and across our region. Today, our state imports between 40%-50% of its power, and that number is expected to grow.

It's no secret that New Jerseyans have been hit with rising utility bills. For PSEG, these recent cost increases are almost entirely due to rising electricity supply costs that stem from the growing imbalance between supply and demand. In 2000, the responsibility for developing an Integrated Resource Plan was removed from the state electric utilities. While not responsible for an integrated plan, PSEG had cautioned for years that without new generation, supply costs would climb and reliability would be compromised. That moment has arrived. On June 1, electric supply costs rose by as much as 20%.

In New Jersey, power is purchased through state-run auctions and utilities like PSE&G pass those costs on to customers with no mark-up. On top of that, under state law New Jersey's regulated electric utilities cannot legally build or own generation to address the projected supply-demand shortfall. Without new supply, costs increased.

Now the PJM Interconnection – the 13-state grid operator our state relies on – is signaling that as soon as 2030 we might not be able to meet electric demand. That means less reliability during high-demand periods, like summer heatwaves and winter freezes.

Together this means customers may pay more for less reliable service.

It will take all of us, across sectors, to craft a plan that tackles both affordability and reliability for the future while still supporting your economic growth and emissions profile policy objectives. Your administration brings a new opportunity for us to think long-term, roll up our sleeves and work together.

PSEG urges immediate action on an all-of-the-above path

Here are some steps we recommend you take as soon as possible:

• Develop a New Jersey Power Plan – an integrated resource plan – something the state has not had in more than 25 years. It needs to be realistic, forward-looking, and grounded not only in end-use demand, but also in how much supply and capacity the state will need by 2030 and beyond.
• Immediately open a process to procure in-state generation. Solar, energy storage, modernizing gas fired generation sites and new nuclear could all play a role. PJM hasn't responded to the crisis, but PSEG is ready to deliver new generation quickly and affordably. We have sites with infrastructure ready to go and union labor partners ready to get to work. This while the state continues to seek reforms at PJM to better incentivize new generation and long-term investment.
• Double down on supporting customers by expanding energy efficiency, demand response, and bill-management tools to streamline assistance for those who need help.
• Advance nuclear energy as part of the mix. As the operator of three nuclear plants in South Jersey, we at PSEG are strong believers in the value of reliable, 24x7, emission-free nuclear power. The state needs to start charting a path to new nuclear now, knowing it will take ten or more years to come online. While nuclear is essential to an all-of-the-above strategy, it alone will not close the supply gap.

Ready for the future

PSEG has a proud, long-standing history of working with state leadership to meet the challenges of the time and establish a path for the future as we have done since our founding in 1903.

• When the 2003 Northeast Blackout hit, PSEG worked with the Corzine administration to redevelop our transmission grid.
• When Superstorm Sandy hit in 2012, PSEG worked with the Christie administration to build back the grid more resilient than ever.
• When the COVID pandemic hit in 2020, PSEG worked with the Murphy administration to maintain our essential services to customers safely.

If we want a reliable, affordable, and secure energy future that truly puts New Jersey first, we need to plan and build it here, and we need to start now. PSEG is ready to do its part.

Let's get to work.