Governor Mikie Sherrill’s recent executive order identifies a winning strategy to lower residents’ utility bills: expanding energy efficiency programs for low-income households. Regulators should ensure that other changes floated in the order don’t jeopardize available efficiency funding.
Families in New Jersey are struggling with high energy bills and badly need effective policies to help. The average residential electricity price in the state climbed by a third from June 2023 to June 2025, driven largely by increased demand and regional delays in building new capacity. In 2024, 28% of households reported that they’d been unable to pay at least one energy bill in full in the past year, compared to 23% nationwide.
An executive order recently issued by Governor Mikie Sherrill on her first day in office seeks to tackle this challenge, directing the Board of Public Utilities to consider changes to reduce utility bills. It includes a call for regulators to identify opportunities to increase support for energy efficiency programs serving lower-income ratepayers. This is a proven solution to help bring down bills—and keep them low—for households that need it most.
However, other elements of the order open the door to potential backsliding that could undermine years of energy efficiency progress that has delivered real value to New Jersey residents. It directs utility regulators to “consider opportunities to reduce” societal benefits charges on utility bills and “confer” about using proceeds from the Regional Greenhouse Gas Initiative (RGGI) for ratepayer relief. Both are important funding sources for the state’s energy efficiency investments today.
New Jersey should not trade long-term bill reductions from efficiency for short-term relief. Governor Sherrill and regulators need to ensure that any potential actions made in response to these provisions do not reduce efficiency funding.
Energy efficiency is New Jersey’s best tool to address the affordability challenge
New Jersey’s utilities run programs that help homeowners, renters, and businesses make energy-saving improvements that lower utility bills. For example, households can receive up to $7,500 in rebates to help cover the costs of energy audits, weatherization, and the installation of efficient appliances and equipment. Residents who want to replace an old heating system with efficient heat pumps—which will save most households money—can use this rebate program from their utility. PSE&G, the state’s largest utility, estimates that improvements made through its efficiency programs in recent years are saving customers more than $900 million annually.
The best-kept secret? Efficiency lowers costs for everyone—not just the families and businesses that choose to use the incentives. That’s because reducing total energy demand through efficiency programs simply costs less than building new power plants.
Based on the Board of Public Utilities’ estimates, the cost of energy savings from New Jersey’s utility efficiency programs in the past few years is $40 per megawatt hour. Compare that to the average cost of $48 to $107 per megawatt hour for the power from a new natural gas combined cycle plant.
With energy demand expected to rise in New Jersey—including from data centers—maximizing energy efficiency improvements in homes and buildings will be a key low-cost tool to address the challenge and reduce the amount of additional generation capacity needed to power the grid.
Efficiency investments should be maintained and expanded
The New Jersey Board of Public Utilities shouldn’t take any funding from energy efficiency programs, which lower bills year after year.
In fact, efficiency investments could benefit from expansion: to reduce utility bill charges without disrupting investment in efficiency programs, the legislature could use public funds to offset part of the ratepayers' costs. Efficiency program funding could increase, and bills would decrease.
Tackling high energy bills was a central promise of Governor Sherrill’s election campaign, and she was right that it deserved to be a day-one priority. As her administration and other decision makers in the state take on this challenge in the weeks and months ahead, maintaining and expanding investment in energy efficiency will be essential to bringing bills down in both the near and long term.
