The New Jersey Board of Public Utilities (BPU) has approved the hiring of a consultant to examine alternative utility business models aimed at reducing electricity costs for customers across the state.
“The BPU is committed to Gov. Mikie Sherrill’s affordability agenda and is looking at every opportunity to drive down electricity rates,” said NJBPU President Christine Guhl-Sadovy. “This study will result in a concrete plan to address how the utility business model can better serve customers throughout the state.”
The consultant’s review will cover several regulatory reforms, such as performance-based ratemaking—which links utility profits to results like reliability and customer savings instead of expenditures—multi-year rate plans, lowering utility returns on equity, least-cost resource testing, and securitization tools. The aim is to find a combination of changes that provides long-term savings for ratepayers while also ensuring industry stability and encouraging necessary investments in system reliability.
This initiative follows Executive Order 1 (EO1), signed by Governor Sherrill on January 20, 2026, which directed the Board to complete its analysis within 180 days. The order is part of a broader strategy by the Sherrill Administration to address rising electricity costs for residents.
Electric delivery charges have been increasing steadily due to infrastructure expenses and higher supply costs linked to PJM capacity auctions. Although measures like the PJM price collar have kept supply rates relatively stable, overall bills remain high for many households. The BPU intends to analyze how current regulatory practices contribute to these increases and what impact different approaches could have on future bills.
According to EO1, this study will not lead to immediate rate changes but aims instead to provide data-driven options for reducing long-term bill pressures while maintaining safe and reliable service.
The request for qualifications (RFQ) was approved during the Board’s regular meeting as part of ongoing efforts by the administration to manage electric costs through various initiatives. The forthcoming study will focus on whether fundamental changes are needed in how utilities operate in New Jersey.
