David Furst: It's the Brian Lehrer Show on WNYC. I'm David Furst in for Brian today. Good morning. Electric bills in New Jersey have been going up for a long time, and now the state's new governor says she is stepping in.

Governor Mikie Sherrill: I'm going to sign my first in a series of executive orders to declare a state of emergency on utility costs. [applause]

David Furst: As she promised on the campaign trail on day one of her term in office, Governor Mikie Sherrill has signed executive orders aimed at freezing certain utility rate increases. She declared an energy emergency framing electricity costs as an affordability crisis for households across the state. The orders also direct regulators to speed up new power generation and take a closer look at where rising demand is coming from, including from large energy intensive data centers.

New Jersey doesn't set electricity prices on its own. What people pay is shaped by a regional power system that serves multiple states, by long standing decisions about what kind of energy gets built and connected to the grid, and by a growing gap between how much electricity the region uses and how much it produces. To help us understand what is driving these costs and how utilities rates are regulated and what the governor's actions can realistically change, we are joined by Steven Rodas, environmental reporter for NJ Advance Media. Welcome.

Steven Rodas: Hey, David. How's it going?

David Furst: Steven, thanks so much for being with us. I know you have a big task ahead of you today to try to explain all of this for us. Steven, why have electric bills in New Jersey been rising so steadily over the past several years? I speak as a New Jersey resident that has been receiving some of these bills.

Steven Rodas: Yes. I am a fellow New Jerseyan in Jersey City, in fact. The reason why people's energy bills have been surging, it's been a plethora of things and sometimes it depends on who you ask, but for the large part, it has to do with data centers in terms of how much energy they use. The fact that we as a state, there are just many more of us using energy. If you think about the conversation around supply and demand, PJM, which is the company, sorry, the grid operator that oversees-- It basically acts like an air traffic controller for the utilities in terms of how it doles out power.

In large part, the conversation about why we're seeing energy bills rise, it has to do, yes, data center growth. The fact that we as a state are again, we're demanding more energy than we're supplying. The state as a whole, in terms of Governor Murphy's plans in prior years, had to do with creating new sources of energy, so offshore wind, laying down the pathway for solar energy, laying down the pathway for other clean energy options. When those clean energy options or that infrastructure didn't bear fruit, we ended up in the place we're in now where we are as a state requiring more energy than it seems that we're able to actually produce for households.

David Furst: We can very quickly kind of slip into alphabet soup in this discussion. Right? You mentioned PJM, and if you could come back to that just a little bit more, what role does the regional grid operator PJM play in determining prices for New Jersey customers?

Steven Rodas: Yes, I agree, David. It's really easy to get into the weeds. PJM, which is the Pennsylvania, New Jersey, Maryland interconnection. Yes, yes. Just clicks off the mind. It's a massive regional transmission organization. It's how it's described. They basically work with the four major utilities in New Jersey, so PSE&G, which I'm sure listeners are aware of, Jersey Central Power and Light, Atlantic City Electric and Rockland Electric Company. Those are the four major ones. They set the prices for how the utilities can then set their prices via auctions that they host every year. They set the prices for the upcoming year at the auctions that they themselves host.

David Furst: If you want to challenge us with some questions, please join this conversation. Our phones are open for your calls. We want to hear from you. In New Jersey, how much are you paying for electricity right now? Has it gone up noticeably in the past few years? Have higher bills changed how you heat or cool your home and how you use electricity day to day? Give us a call. 212-433-9692. That's 212-433-WNYC. Steven, when people get their bill, there's this number that we see. What are the biggest components that go into what they're paying?

Steven Rodas: Absolutely. I would say the biggest components that go into what they're actually paying come from how often as a region, whatever region you lie in, and therefore whatever utility you rely on or you're connected to how much power is being generated in those areas. If there's, for example, a very particular hot month during the summer and there's peak demand, a lot of air conditioners are on, suddenly that means there is stress on the grid and therefore people use more power. That collectively can then mean in July or August or what have you, suddenly not only are individual households seeing their bills go up, but an entire region can see that reverberate.

David Furst: I want to play another clip from Governor Sherrill's inauguration. Here she was getting her pen ready.

Governor Mikie Sherrill: I am issuing an executive order giving the New Jersey Board of Public Utilities the authority to pause new utility requests for additional rate increases. I will freeze rate hikes to finally provide families with real relief on their energy bills.

[applause]

David Furst: Governor Sherrill is leaning on the Board of Public Utilities, or BPU, which oversees the state's utilities, to curb rate hikes. Her executive order number one, "empowers the Board of Public Utilities to pause or modify utility actions that could further increase bills." What can the board actually do for customers and what is beyond its control?

Steven Rodas: Absolutely. The Board of Public Utilities, which should be noted, is a primarily governor appointed board. Therefore, it's very much going to take the lead of the new governor. They can in fact based on specific actions they take at upcoming meetings, pause or freeze utility customers rates. Except that money has to come from somewhere, right David? The plan right now, based on the executive order, it's about a nine page executive order that the governor released, talks about using money from clauses in utility charges that residents see on their bills to offset those costs.

Basically, the state is looking to cover those costs via the credits that they're allowing folks to take advantage of. Again, the board can, and the plan is to start this in July, give relief to customers, whether it's temporarily for how things-- Where the cards fall. Ultimately we shall see. One thing that I think is also important to note is that in Governor Sherrill's remarks, she spoke about the second executive order which wants via executive action, solicit new solar and storage power generation. They want to modernize gas and nuclear generation.

Again that's a long-term view. That gets to the second part of your question, David, which is what is not in the Board of Public Utilities or the state of New Jersey's hands, which is PJM and what actions they take. Environmental advocates have long complained that there has been a backlog of solar energy projects, for example, interconnecting to the grid and that there have been fossil fuel, other power generators that are more in the fossil fuel nuclear energy realm that have been given more leeway to them prosper and to them then provide power to their region.

What's not in the state's hands is what exactly happens next in terms of what actions PJM may take. What the grid operator lays the pathway for themselves.

David Furst: We're speaking with Steven Rodas with New Jersey Advanced Media. So many questions to get to. If you would like to join this conversation, 212-433-WNYC. That's 212-433-9692. Steven, as you were talking about solar, we were getting a text at that exact moment, someone writing in to say why is so little being done to grow rooftop solar? There's so much rooftop space in New Jersey. Why do we not have much, much more solar panels on the rooftops of buildings, offices, warehouses, et cetera?

Steven Rodas: Absolutely. I think the response to that is multi-pronged. For one, it does in large part go back to a comment I had just made about interconnecting to the grid. If let's say a company or a homeowner or someone who owns a warehouse, which as a state in New Jersey we have a lot of rooftop space on warehouses, as I'm sure you know, they might in some cases not be ready ready or very eager to connect to a large solar array or solar panels to power the energy field because it takes so long or they've seen it take so long to connect to the grid, and there isn't a whole lot of incentive down the line to say, okay, let's invest X amount of money.

Of course, it can be expensive to install solar panels if we know there's going to be a delay in connecting to the grid, which it defeats the point if you can't connect to the grid by just having a large blue solar array up on top. I think the other part has to do with I think the agency that people may have in New Jersey. You might be someone that is very pro-adding solar panels to your roof, but if you're a renter, if you're a homeowner, where the infrastructure or the just the setup of your roof isn't exactly conducive to a solar panel, you might want to take the step of going solar, but you're limited in actually doing it because infrastructure rears its head in and you're limited in that way too.

David Furst: If you'd like to call in with a question or a comment. 212-433-9692. James in Manhattan, welcome to the Brian Lehrer Show.

James: Thank you very much for having me. Go show. You know what, I moved from New York to New Jersey--

David Furst: Oh, you just moved to New Jersey?

James: Yes, about four months ago. Had a cheaper rent, so I jumped onto it. Only for me to know that utility bills is going to send me packing.

David Furst: Oh, so you've been shocked by the utility bill that you received?

James: Last month I got $441 bill on a three-bedroom flat, and this month it was 557.

David Furst: Wow. Wow.

James: I got a bill right now with me, $557 for 30 day. I went to the office yesterday. They said there's nothing they can do. That's how the system is set up. That is because of the heating that I was using. I'm like, it's just a three-bedroom flat. Most times I work in the city of Manhattan, and I leave home 7:00 AM, get home by 7:00, 8:00 AM. Only my son is home. Why do I have to pay this kind of bill? They say, well, there's nothing they can do about it.

David Furst: Well, Steven, let's hear more about that. There it is, right there. Right? As Governor Sherrill is going to be tackling the affordability crisis. Let's get into that. What does declaring a freeze on utility rates as she has done actually do? This was a campaign promise. Some people may be feeling like that freeze will have an immediate impact on their bills. Maybe they would start to reduce what they're paying. Let's talk about reality here. What will that do?

Steven Rodas: Reality, unfortunately, for folks that want something very much in front of them that solves this. It tells us that next month, the month after, it doesn't suddenly mean because of her announcement, because of the executive orders, because of this declaration on this larger issue that suddenly people's bills will fall. We spoke with rate payers that saw their bills, $400, $500 last summer, increases 20, 22%, sometimes even more. We know from talking with readers and hearing from listeners that people are very much seeing their pockets hurt with what their bills are reflecting.

In the very immediate, there won't suddenly be a decrease. We know utilities are offering, in some cases, resources for folks to look into, but the plan for New Jersey, based on the executive orders that Governor Sherrill announced, the plan is to have them take effect in the summer, as of July. There might be some specific relief based on what people are seeing on their bills, based on where they are and what utility serves them.

David Furst: Following up on that, Steven, this notion of Governor Sherrill declaring the freeze, I know she said it, but does that have teeth? Does her saying it make it so?

Steven Rodas: Whether that has power, and like you're saying, whether it has teeth, I think the very unsatisfactory but real answer is we shall see. We do, as a state, have to hunker down in a way to see exactly how this plays out. It's a new governor, it's a new administration. The Board of Public Utilities is very much going to take this baton and run ahead. I spoke with the folks at PJM this morning, in fact, and they told me that they qoute said, "we are looking forward to working with Sherrill's administration as partners to identify practical solutions in the months and years ahead.

They're very much interested in working with the governor as well. There's a lot that's working in favor of the governor in terms of starting off on this foot and fulfilling the pledge of at least taking this step and signing these two executive orders on her first day in office, but the dust hasn't settled yet, I think, would be the short answer.

David Furst: We're here with Steven Rodas of New Jersey Advanced Media, and let's take another one of your questions. Geraldine calling in from Caldwell, New Jersey. Welcome.

Geraldine: Hi, thank you. My question is I'm wondering if there's a different rate for residential customers versus the corporate customers that are running these big data centers, because I'm wondering if the cost trickles down to the residential users when corporations are making lots of money and using these big data centers.

David Furst: Geraldine, that's a great question. Thank you for calling in. Data center is a big part of the story, right? What about that?

Steven Rodas: Now, that's a great question. We know lots of folks in New Jersey are interested in what data centers do to their communities and how they might impact their own rates. The straightforward what does it mean to have a data center use X amount of power next door to me or in my neighborhood? What does that mean for my own rates? They are responsible for paying, of course, the rates based on the power that they use. In the case of a data center, they're, of course, going to use much more than a household, so that translates in terms of what they're seeing reflected.

I think that as a legislature and as a state new folks in that administration, lawmakers that have been in office are interested in having the data centers pay an additional charge or at least be responsible for water, the energy that the power generators that they need on their grounds produce and use in terms of power and energy, how that impacts the grid in the long term too. They are responsible for paying for the power that they use, but I think New Jersey has also been very at the forefront about wanting to think about if these proliferate, what other payments, what other funds should they also be responsible for providing for?

David Furst: Should they be responsible for paying for perhaps grid upgrades built to serve them, paying for new power plants and some of that infrastructure?

Steven Rodas: Things like that. Exactly, yes.

David Furst: Getting a text right now about data centers. Someone writing in saying, I recently viewed a map of New Jersey's data centers. It appears that the majority of them are in North Jersey in the cities. I also read that many of the northern centers serve parts of New York City. If that's true, how is that fair to New Jersey residents?

Steven Rodas: We know right now that data centers use about 4% of the total power in New Jersey, but that's expected to triple by 2030, according to the Board of Public Utilities in New Jersey. Whether it's fair or not that energy used by a data center in a neighboring state isn't translating to grid impacts or rate impacts in the other state. I think that's part of these conversations that are currently happening. Whether it's New York, New Jersey, of course, Pennsylvania, a lot of state lawmakers and state leaders are currently conversing about this, figuring this out.

I think it's important to note too that that PJM, the grid operator, they provide their services and partnering with utilities for 13 states plus DC. It's important to think about the data centers that exist within your own state and how that impacts the grid. The way that grids work is regional, so a proliferation of data centers in Virginia, which is the case that there are more there, that is also part of the conversation and that does trickle down to states that share that grid operator.

David Furst: I want to get to another one of your calls. Hilda in Robbinsville, New Jersey. Welcome.

Hilda: Hello. I have an EV. I've owned it for two and a half years. PSE&G in central New Jersey has a wonderful off peak program where they give you credits towards your bill. I've been communicating with them over the last week and I have found out that effective April 1, they are discontinuing the EV credit program. Lou, June 1st, PSE&G, it was planning on doing time of use, where different parts of the day you'd pay different rates for your energy, whether it's an EV or any kind of energy in your home.

Depending on when you charge your EV, it would definitely make your bill go up. I don't know if the public is aware of this, but when you have an EV, you really should be having it plugged in. Even so, it's not charging. You can have it charged at an off peak time of day, but during the day, it should be plugged in, so it gets a little juice during the day, but it's not charging. It's going to definitely affect EV users and also it's also going to affect everybody in New Jersey with this, if they implement this time of use. I'm just concerned with the freezing with Cheryl, is this going to affect this time of use program? Then, basically, between April and June 1, the EV users will be paying a flat rate and not getting credits.

David Furst: Steven, is that an aspect you're familiar with?

Steven Rodas: I don't know all of the ins and outs of that part of this conversation in terms of electric vehicle users and the credits that program via PSE&G or other utilities could provide, but I know that definitely brings to mind something else that would be important to know about what's not in New Jersey's hands. That's what happens on the federal level, which this connects to. Connect, no pun intended. The state is in some ways at the mercy of federal decision making involving what kind of energy the Trump administration is interested in incentivizing.

That does not involve solar energy, that does not involve electric vehicles. The state has worked to make strides in terms of incentivizing electric vehicle users or prospective electric vehicle users. If, as a federal government, there are less incentives to buy these vehicles, to install those electric vehicle chargers, that will, by the nature of what folks see when they're going to dealerships or when they're shopping, that will have the impact of having fewer folks take that step and go that route.

David Furst: Sure, Steven, as we're wrapping up here, I'm going to have to ask you to solve this for us as we're running out of time. What are some of the realistic long term options for bringing costs down while keeping the grid reliable and meeting climate goals?

Steven Rodas: Absolutely. I think that we are uniquely positioned to face this perhaps in a way that's not easy, for lack of a better phrase. Nine million residents, more than three and a half million homes here in New Jersey, we're very dense. This is a tough challenge for other places around the country. We know nationwide power prices have gone up by a little over 6%. When it comes to New Jersey, I think it very much has to do with people being very cognizant of the power they use, other services that are on hand, and I think becoming much more familiar with just how everything that involves how they get their power works.

It might seem simple, but I don't know if PJM or grid operators or any number of words or phrases that we've bandied about in this conversation. We're in the lexicon even three years ago, three, four years ago. I think people are much more familiar with how this all works. From speaking with families that have seen their rates increase, from environmental advocates, even lawmakers on both sides of the fence when it comes to their party, they've all said that everyone being much more informed about how this all works will make it much more clear what they want, and that could only help drive a solution for the future.

David Furst: Steven, how much is this backlog of clean energy projects a factor? These projects waiting to connect to the grid?

Steven Rodas: Yes, I would say it's a pretty big factor. When we spoke with PJM, they spoke about the fact that they are aware of the importance of properly vetting projects regardless of the kind of energy that they use. When the BPU president spoke in a hearing last year, she spoke about nearly 80 New Jersey energy projects that were clean energy, so solar and storage that were waiting in the interconnection review for years, for a very long time. It's similar to conversations that folks have about offshore wind or battery storage.

If there are pieces of infrastructure or projects that are not getting interconnected where the path isn't being laid for them to move forward, that is going to just naturally have a chilling effect on other companies, other developers, other people that want to do the same thing. I would say that's where it plays a big role.

David Furst: We're going to have to leave it there for now, really. So many more questions. Thank you so much for all of the phone calls and the questions that were coming in. Steven Rodas, environmental reporter for New Jersey Advanced Media, thank you for joining us.

Steven Rodas: David, thanks.

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