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On her first day in office, Governor Sherrill signed two executive orders declaring a state of emergency on utility costs and ordering the largest solar + battery expansion in NJ history. Here's what it means for your electricity bills and your home.
Governor Sherrill's executive orders are a direct response to unprecedented electricity rate increases that hit NJ homeowners in 2025. All three major utilities raised rates significantly, driven primarily by the PJM capacity auction results.
Primary Driver: PJM capacity auction + infrastructure investment
Primary Driver: PJM capacity auction + transmission upgrades
Primary Driver: PJM capacity auction + coastal infrastructure + storm hardening
In August 2025, Governor Murphy (before leaving office) authorized a $100 residential bill credit applied to every residential electric account in NJ. The total cost was $430 million, funded through the Societal Benefits Charge. This was a one-time credit. Governor Sherrill's EO No. 1 directs the BPU to create a more sustained bill relief program.
The 2025 rate shock hitting NJ homeowners traces back to the PJM Interconnection capacity auction held in July 2024. PJM operates the electric grid serving 65 million people across 13 states plus DC. Every year, PJM holds a capacity auction where power plants bid to provide electricity three years in the future.
The 2025/2026 capacity auction cleared at $269.92/MW-day — a 833% increase from the prior year's $28.92/MW-day. This single auction result added approximately $14.7 billion in costs across PJM's territory, with NJ's share estimated at $2.1 billion.
The spike was driven by four factors: coal and natural gas plant retirements (22 GW retiring by 2030), massive data center load growth (2,400+ MW of interconnection requests in NJ alone), stricter reliability requirements from FERC, and insufficient new generation being built to replace retiring capacity.
For NJ homeowners, this means utility rates are not just temporarily elevated — they represent a structural shift. The same capacity constraints that caused the 2025 spike will persist in future auctions. This is why Governor Sherrill's executive orders focus on both immediate relief (bill credits) and structural solutions (solar, batteries, VPP, nuclear).
Signed January 20, 2026— Governor Sherrill's first executive order declares rising utility costs a state of emergency and directs the NJ Board of Public Utilities to take immediate action.
This is only the second time a NJ Governor has declared a state of emergency related to energy (the first was during Hurricane Sandy in 2012).
Declares rising utility costs a state of emergency, granting the Governor enhanced authority to direct state agencies to take immediate action to protect ratepayers.
Impact: Enables BPU to use emergency powers to pause, modify, or condition utility rate actions without the normal 6-12 month regulatory process.
Directs the Board of Public Utilities to design and implement direct bill credits for residential ratepayers by July 1, 2026, funded through a combination of utility excess earnings and state clean energy fund reallocation.
Impact: Additional bill credits beyond the $100 already distributed in August 2025. BPU is studying a $50-$75/month credit for qualifying households.
Grants the BPU explicit authority to pause pending utility rate cases, modify approved rate increases, and condition future rate actions on utility performance metrics.
Impact: PSE&G, JCP&L, and ACE all have pending 2026 rate cases. The BPU can now delay or reduce these increases, potentially saving ratepayers hundreds of millions.
Requires utilities to provide detailed public breakdowns of rate increase components, including PJM capacity costs, infrastructure investment, executive compensation, and return on equity.
Impact: Homeowners will see exactly why their bills are increasing, enabling informed decisions about solar and battery investments.
Signed January 20, 2026— The second executive order focuses on long-term structural solutions: expanding clean energy generation, creating a Virtual Power Plant program, preserving nuclear baseload, and addressing data center load growth.
While EO No. 1 provides immediate relief, EO No. 2 addresses the root causes of NJ's energy cost crisis with generation and demand-side solutions.
Directs the BPU to establish a statewide Virtual Power Plant program within 180 days (by July 2026). Target: 500 MW of aggregated distributed energy resources providing peak demand reduction by 2030.
Impact: Battery owners will be paid to allow their batteries to discharge to the grid during peak demand. Expected payments of $0.75-$1.50/kWh dispatched, similar to the GSESP Phase 2 structure.
Sets expanded deployment targets for distributed solar and paired battery storage. Directs BPU to increase the Successor Solar Incentive (SuSI) program capacity and create new incentive tiers for solar+battery paired systems.
Impact: More incentive capacity means fewer waitlists and faster approvals for NJ homeowners adding solar. Battery pairing incentives will make solar+storage the default installation.
Establishes a Nuclear Power Task Force to evaluate extending the operational life of NJ's existing nuclear plants (Salem 1 & 2, Hope Creek) and assess the feasibility of small modular reactors (SMRs).
Impact: Nuclear provides 40% of NJ's electricity. Maintaining nuclear baseload keeps wholesale prices lower, which benefits all ratepayers and makes solar economics even more favorable.
Requires utilities to report data center electricity consumption and forecast data center load growth. NJ has seen 2,400 MW of data center interconnection requests since 2023, threatening grid capacity.
Impact: Data center demand drives up PJM capacity prices for all ratepayers. Transparency will inform policy decisions about who pays for grid upgrades to serve these massive loads.
The 500 MW VPP target represents roughly 37,000 home batteries (at 13.5 kWh each) aggregated into a virtual power plant. During peak demand, these batteries would discharge simultaneously, reducing grid stress equivalent to a mid-sized natural gas peaker plant.
The BPU has 180 days from EO No. 2 signing (by July 19, 2026) to establish program rules. Early indications suggest the VPP program will be integrated with the GSESP Phase 2 residential incentive, creating a single enrollment pathway for battery owners.
Battery owners who enroll in the VPP program will receive payments for each dispatch event, similar to how demand response programs work today. The key difference: VPP dispatch is automated — your battery participates without any action from you, and you maintain a configurable backup reserve so your home is always protected.
The two executive orders create both immediate relief and long-term structural improvements. Here's a practical breakdown by category:
NJ electricity rates are not going back to pre-2025 levels. The PJM capacity market dynamics, data center growth, and infrastructure investment needs are structural forces that will keep rates elevated for years. Governor Sherrill's orders provide important near-term relief, but the strongest long-term protection is generating your own electricity with solar panels and storing it in a home battery.
A homeowner with solar + battery in NJ can now stack: net metering savings + TOU optimization ($400-$800/year) + future VPP payments ($500-$1,600/year) + bill credits from EO No. 1 + GSESP Phase 2 incentive. Combined, these programs can make a home battery cash-flow positive within 3-5 years— on top of the energy independence and storm resilience benefits.
The executive orders provide relief, but rates will remain elevated. Every month without solar costs you $150-$200 in electricity you could be generating for free. Solar payback periods in NJ are now under 6 years for most homeowners.
The 500 MW VPP program will pay battery owners for grid dispatch. Install a battery now, earn TOU savings immediately, and be first in line when VPP enrollment opens in mid-2026.
NJ Whole Home rebate ($7,500), PSE&G 0% financing, net metering, TOU optimization, property tax exemption, and (coming soon) VPP payments + GSESP Phase 2. NuWatt navigates all of these for you.
Understand exactly what you are paying per kWh and how much the rate increases have impacted your specific utility. This helps size your solar system correctly to offset your actual (higher) bills.
Governor Sherrill signed two executive orders on January 20, 2026. EO No. 1 declares a State of Emergency on Utility Costs, granting the BPU authority to provide bill credits and pause/modify utility rate actions. EO No. 2 orders massive solar and battery expansion, creates a 500 MW Virtual Power Plant program, establishes a Nuclear Power Task Force, and requires utilities to report data center load growth.
A $100 residential bill credit was already applied in August 2025, costing $430 million statewide. EO No. 1 directs the BPU to design additional bill credits by July 1, 2026. The amount and frequency of future credits has not been finalized, but the BPU is studying a $50-$75/month credit for qualifying households. All residential PSE&G, JCP&L, and ACE customers are expected to be eligible.
The VPP program directed by EO No. 2 will aggregate home batteries and other distributed energy resources to provide grid support during peak demand. Battery owners will be paid for allowing their batteries to dispatch to the grid during critical hours. The program targets 500 MW of peak demand reduction by 2030. The BPU must establish program rules within 180 days (by July 2026).
Specific VPP payment rates have not been published yet. Based on comparable programs (Massachusetts ConnectedSolutions, California DSGS, Green Mountain Power in Vermont), we expect $0.75-$1.50 per kWh dispatched during peak events. A 13.5 kWh battery dispatched 50-80 times per year could earn $500-$1,600 annually in VPP payments, on top of TOU optimization savings.
NJ rates spiked due to the PJM capacity auction in July 2024, which cleared at $269.92/MW-day — an 833% increase from the prior year. This single auction added an estimated $2.1 billion to NJ ratepayer costs. The spike was caused by power plant retirements, massive data center load growth, stricter reliability requirements, and insufficient new generation capacity.
EO No. 1 grants the BPU authority to pause, modify, or condition utility rate actions under the declared state of emergency. This is not a permanent rate freeze, but it gives the BPU tools to delay or reduce pending rate increases. PSE&G, JCP&L, and ACE all have pending 2026 rate cases that could be affected.
EO No. 2 sets expanded deployment targets for distributed solar and paired battery storage. It directs the BPU to increase Successor Solar Incentive (SuSI) program capacity, create new incentive tiers for solar+battery paired systems, and integrate the VPP program with existing solar incentives. This means more incentive availability, shorter waitlists, and better economics for solar+battery installations.
Ghost loads refer to electricity demand from data centers that is planned or under construction but not yet reflected in utility load forecasts. NJ has received 2,400+ MW of data center interconnection requests since 2023 (equivalent to powering 1.5 million homes). These loads drive up PJM capacity costs for all ratepayers. EO No. 2 requires utilities to report actual and projected data center consumption so regulators can ensure costs are allocated fairly.
Governor Sherrill's executive orders provide relief, but the best long-term protection is solar + battery. Lock in your electricity rate at $0/kWh, earn VPP payments, and never worry about another rate increase.