2025 NJ Electric Rates Explained: Average Bill Costs & Practical Saving Methods
- What Every New Jersey Resident Needs to Know
- How New Jersey's Electric Rates Are Determined
- Projected 2025 Average Electric Bills in New Jersey
- Practical Saving Methods: Reducing Your Consumption
- Strategic Rate Management: Shopping for a Supplier
- When Savings Aren’t Enough: Financial Assistance and Official Resources for New Jersey Residents
- Take Command of Your Energy Costs!
In New Jersey, electricity is not a flat rate; it's a rate that fluctuates based on auction prices in the market, regulatory decisions made by regulators, and how much electricity you use. In order to control this expense, you need to understand how your bill is structured. Your total bill consists of two parts: the supply cost, which is for the electricity itself and may be competitive, and the delivery cost, a fixed fee from your local utility company for keeping the power grid running.
What Every New Jersey Resident Needs to Know
The one thing that has the most impact on your electric bill is the yearly Basic Generation Service (BGS) auction. This state-regulated process sets the default price that most people pay for the supply of electricity. You can be saving money by understanding one easy principle: you have the choice of who supplies your electricity. You cannot change the company providing power to your home and taking care of poles and wires (your utility). However, you can buy electricity from another company called a Third-Party Supplier (TPS). If there is a lower price by a TPS than your utility's default "Price to Compare," changing will reduce your monthly bill. The path in 2025 will be clear following the BGS auction in early 2025, but how to save does not change.
How New Jersey's Electric Rates Are Determined
Electric bills in New Jersey are set through a clear process that involves both state oversight and market mechanisms.
BPU Sets and Oversees Electric Rates
The New Jersey Board of Public Utilities (BPU) is the state agency that regulates all utilities. BPU approves the rates your utility company charges and makes sure electricity service is safe, reliable, and fairly priced. No matter where you live in New Jersey, BPU’s decisions affect your electric bill.
Two Main Parts of Your Electric Bill
Your monthly bill has two main charges:
- Delivery Rate: This is the cost for your utility company (like PSE&G or JCP&L) to deliver electricity to your home. It covers the maintenance of power lines and other infrastructure. The delivery rate is set by your utility and approved by BPU. This part of the bill is fixed and cannot be changed by choosing another supplier.
- Supply Rate (Price to Compare): This is what you pay for the electricity you actually use. Most residents pay a rate set by the annual Basic Generation Service (BGS) auction, where utilities buy electricity for the coming year. The result is called the “Price to Compare,” and it changes every June. If you shop for a third-party supplier, you can compare their rates to this number to see if you can save.
The key is to remember that while the delivery rate is fixed, the supply rate is flexible, giving you a clear opportunity to manage your monthly costs.
Projected 2025 Average Electric Bills in New Jersey
Now that you know how rates are set, it’s helpful to see what these changes mean for your monthly bill in 2025. The latest rates, based on the results of the February 2025 Basic Generation Service (BGS) auction, will apply starting June 1, 2025. Most households and small businesses in New Jersey will see these new prices reflected in their bills.
The following estimates use an average monthly usage of 650 kWh, which is typical for many New Jersey homes. Your actual bill may be higher or lower depending on how much electricity you use.
Public Service Electric & Gas (PSE&G)
- Customers can expect an increase of approximately 17.24% in the supply portion of their bills.
- A typical residential customer using 650 kWh per month will see their total monthly bill rise by about $27, reaching an estimated $183.
Jersey Central Power & Light (JCP&L)
- Customers will face the highest increase, with supply rates rising by 20.20%.
- For a household using 650 kWh, this translates to a monthly increase of $22.67, bringing the estimated new monthly bill to $134.92.
Atlantic City Electric (ACE)
- ACE customers will see a 17.23% increase in their electricity supply costs.
- This will result in an estimated new monthly bill of $190.62 for a 650 kWh user, an increase of $28.02.
Rockland Electric (RECO)
- Supply rates for RECO customers are set to increase by 18.18%.
- A residential customer with an average usage of 650 kWh will pay an additional $25.48 per month, for an estimated total bill of $165.64.
Disclaimer: These figures reflect announced increases and are based on an average usage profile. The "Price to Compare" on your bill is a blended rate derived from this year's auction and the auctions of the two preceding years. The total bill impact provided here is the most practical measure for homeowners. Actual costs will depend on individual energy consumption.
Practical Saving Methods: Reducing Your Consumption
You can’t control the rates set by utilities, but you can take action to use less electricity and pay less each month. Below are practical, specific ways to help you save, from simple habits to long-term improvements.
Stage 1: No-Cost Behavioral Changes
This initial stage focuses on developing habits that reduce energy consumption without any financial outlay, offering immediate savings.
Adjust Thermostats and Appliances
Significant savings can be found in daily routines. A simple adjustment to your thermostat—a few degrees lower in winter or higher in summer—makes a noticeable difference in heating and cooling costs. You can amplify these savings in the laundry room by switching to cold water for washing and ensuring both your washing machine and dishwasher are fully loaded before running a cycle, maximizing the efficiency of each use.
Unplug Your Electronics
Many modern electronics continue to draw power even when turned off, acting as silent "energy vampires." Making a habit of unplugging devices like chargers, televisions, and computer systems when they are not in active use is a simple but effective way to prevent this wasteful standby power consumption and cut down on your monthly bill.
Stage 2: Low-Investment, High-Impact Upgrades
This stage includes items that require a modest investment but offer a quick and significant return by improving the efficiency of your home's fixtures and seals.
Upgrade Lighting and Power
Modernizing your home's smaller electronics offers a fast payback. Switching your home's lighting from traditional bulbs to energy-efficient LEDs can cut lighting costs by up to 90% and the bulbs last much longer. This can be complemented by using advanced power strips, which automatically cut off electricity to devices like entertainment systems when they go into standby mode.
Stop Air Leaks
One of the most effective low-cost projects is to improve your home’s seal against the elements. By applying weatherstripping or caulk to gaps around windows and doors, you can prevent the conditioned air you've paid to heat or cool from leaking out. This simple fix makes your entire heating and cooling system work more efficiently.
Stage 3: Strategic, Long-Term Investments
This final stage covers major projects that require a significant budget but fundamentally improve your home's energy profile for the greatest possible long-term savings.
Upgrade Appliances and Insulation
For a foundational impact on your energy bills, consider strategic upgrades to your home's core systems. Installing a smart thermostat automates your heating and cooling for maximum efficiency based on your routines. When replacing major appliances, choosing ENERGY STAR® certified models ensures long-term savings. Furthermore, improving your home's insulation in key areas like the attic works in tandem with these upgrades to maintain a stable temperature year-round.
Consider an Energy Audit and Solar
To fully commit to energy independence, two key steps stand out. First, scheduling a professional home energy audit provides a detailed roadmap of where your home is losing the most energy, pinpointing the most effective improvements. For the most significant investment, installing solar panels can offset a large portion of your electricity use, and New Jersey's incentive programs can help make this ultimate solution more accessible.
Strategic Rate Management: Shopping for a Supplier
To save money, not only must you use less, but you must also manage how much. Your utility's "Price to Compare" is not your sole choice. You can look for a more favorable rate with a different supplier.
The Step-by-Step Shopping Process
Step 1: Find Your Price to Compare:
First, find your latest electric bill. On it, you'll have your current Price to Compare (PTC) from your utility, which will be in cents per kWh. That's what you need to beat.
Step 2: Visit the Official Comparison Website:
The New Jersey Board of Public Utilities maintains an impartial website called NJ Power Switch. On this website are listed all the licensed TPSs that sell in your utility's area.
Step 3: Compare Offers:
Enter your usage and utility to view available plans. Check each supplier's rate and compare it with your PTC. Even a slight difference—such as 1 or 2 cents in savings per kWh—can amount to a substantial saving in a year, particularly if you consume lots of electricity.
Critical Questions for a Third-Party Supplier
Before you switch, it is vital to scrutinize the terms of any agreement.
Is the rate fixed or variable? Fixed rates don’t change during your contract, while variable rates can go up or down. Fixed rates are usually safer for budgeting.
What is the contract length? Terms typically range from 6 to 36 months. Be sure the term aligns with your needs.
Is there an early termination fee? Many contracts include a fee if you cancel before the term expires. Clarify the exact amount.
Does the rate include all taxes? Confirm whether the advertised rate is all-inclusive or if taxes and other fees will be added on top.
Is this an introductory rate? Some suppliers offer a low "teaser" rate that increases substantially after a few months. Ask if the rate is for the full term of the contract.
When Savings Aren’t Enough: Financial Assistance and Official Resources for New Jersey Residents
If you’ve tried cutting your usage and shopping for better rates but still find your electric bill difficult to manage, there are programs and resources that can help. This section explains where to find financial support and reliable information.
State and Federal Assistance Programs
Low Income Home Energy Assistance Program (LIHEAP): A federal program that helps low-income households pay for heating and cooling.
Universal Service Fund (USF): A New Jersey program that lowers monthly gas and electric bills for eligible low-income families.
Payment Assistance for Gas and Electric (PAGE) Grant: Offers financial help to low- and moderate-income households struggling with utility bills.
Official Information Hubs
NJ Board of Public Utilities (BPU): The main source for official rate filings, auction results, and regulatory updates.
NJ Power Switch: The state’s official website for comparing licensed third-party electricity suppliers.
Your Utility’s Website: Check for your specific delivery rates, report outages, or learn about utility-run energy efficiency programs.
These resources are here to support you, whether you need direct financial help or simply want to stay informed about your options.
Take Command of Your Energy Costs!
Your electric bills in 2025 can be different. Start by examining your bill to see how much energy you use and what your current Price to Compare is. Try some free habits to lower your energy use now so that you can notice a difference on your next bill. When BGS's new auction prices are released in spring 2025, compare your utility's new price to the prices on NJ Power Switch. You can help the environment and manage your energy bills throughout the year by being proactive and making smart decisions. For example, using portable solar panels to offset most of the electricity consumption