How an Electricity Rate Freeze Could Actually Work | New Jersey Governor-elect Mikie Sherrill made a rate freeze one of her signature campaign promises, but that’s easier said than done.

4 comments

1. We can freeze your rates on the amount of power you bought last year but that next kWHr is gonna cost you dearly.

   Or, of course, somebody could allow us to import solar panels at a decent cost again, and your high priced solar power this year will be bargain basement power when your mortgage is paid off.

2. Dubious proposition IMO

   Costs are rising across the board. Conductor/copper, transformers, circuit breakers, skilled labor, etc

   Many grid assets are operating beyond their intended lifespan. Proactive replacement costs about 1/3 relative to letting that asset fail and require emergency replacement

   Newfound demand from data centers, EVs, space heat electrification are all asking more from the grid

   Supply-side decarbonization calls for more transmission to move non-dispatchable generation to where is can be used (rather than curtailing, which is on the rise)

   The grid itself is also subjected to harsher and more frequent extreme weather events. Which requires reinforcement

   How will utilities keep rates flat and also stay in business and attract adequate investment to keep this capital-intensive network of infrastructure up and running?

   Honest question, if we have any energy economists in the house

3. This is a solution to the wrong problem. Price caps just lead to a backlog of asset risk and more outages when storms happen.

   What they should do is require utilities to do a formal benefit cost analysis to justify all investments ensuring their prudence instead of massive blanket buckets of spend.

4. Electricity rates are regulated, but should never be done arbitrarily. The company has invested money with the reciprocal commitment that rates are set to reflect costs of operation, plus a reasonable rate of return on invested capital.

   The governor doesn’t have the time or expertise to do this task, that is why public utility commissions exist.

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