TRENTON, N.J. — Two New Jersey Republican senators have introduced legislation to temporarily suspend taxes and fees on electricity bills in an effort to reduce costs for residents ahead of expected rate hikes this summer.
Senator Latham Tiver (R-8) and Senator Joe Pennacchio (R-26) announced Wednesday that their bill would pause both the state’s sales and use tax and the Societal Benefits Charge (SBC) on electric bills from June 1 through September 30, 2025. The move comes as energy prices in the state are projected to jump by up to 20% starting in June.
“For too long, New Jersey residents have paid inflated energy bills while the Societal Benefits Charge has been quietly siphoned off to fund unrelated projects,” said Sen. Tiver. He called the SBC “a slush fund for the state” and said it’s time to return those funds to ratepayers.
The SBC, originally designed to support energy assistance and clean energy initiatives, has come under scrutiny for being used to fill unrelated budget gaps. Between 2021 and 2024, more than $704 million in SBC revenue was diverted to other funds, according to the senators.
Legislation aims at affordability and reliability
In addition to the tax relief bill, Tiver has proposed the “Energy Security and Affordability Act,” which would mandate investment in reliable and affordable energy infrastructure.
Sen. Pennacchio pointed to a looming summer energy crisis. “Families and small businesses are already stretched thin with high taxes and inflation,” he said. “We need to act now to lower energy bills before the health and livelihoods of our families and businesses are put at risk.”
According to state budget projections, New Jersey is expected to collect $259.5 million in FY26 from energy-related sales tax revenue, a nearly 50% increase over earlier estimates before the scheduled rate hikes.
This summer, New Jersey residents are grappling with a significant 20% surge in energy costs.
In February, the New Jersey Board of Public Utilities (NJBPU) approved the results of its 24th annual Basic Generation Service (BGS) auction, leading to a significant electricity rate hike set to take effect on June 1, 2025.
This auction determines the cost of electricity for most residents and small to medium-sized businesses served by the state’s four major electric distribution companies: Atlantic City Electric, Jersey Central Power & Light (JCP&L), Public Service Electric & Gas (PSE&G), and Rockland Electric Company (RECO). The approved rates will increase average monthly bills by 17.23% to 20.20%, translating to an additional $22.67 to $28.02 per month for customers using approximately 650 kilowatt-hours, depending on their utility provider.
The NJBPU attributes the hike to rising electricity demand, particularly from data centers, a lack of new power supply due to delayed generation interconnections, and flawed market dynamics in PJM Interconnection’s capacity auction.
The rate increase has sparked widespread concern among residents, lawmakers, and advocacy groups, who argue that it exacerbates affordability challenges in a state already grappling with high living costs.
Brian Lipman, director of the New Jersey Division of Rate Counsel, expressed deep concern, noting that the hikes are higher than anticipated and will disproportionately burden low- and moderate-income households.
Critics, including U.S. Representative Jeff Van Drew and Senate Republicans, have blamed the Murphy administration’s energy policies, particularly its focus on renewable energy like offshore wind, for failing to prioritize reliable and affordable energy sources such as nuclear and natural gas.
