True Choice in New Jersey Means Protecting Ratepayers, Not Utility Profits

August 26, 2026

By Glen Thomas, President, P3 Group

As industrial energy consumers who power New Jersey’s economy—providing jobs, manufacturing goods, and driving growth—we read the recent op-ed, “Power consumers deserve genuine choice,” with deep concern. The opinion from a DC-based lobbying organization argues that New Jersey should allow utilities to return to vertically integrated, utility-owned generation. It frames this as expanding “competition” and “choice.”

The op-ed relies on a fundamentally flawed analogy, comparing electric utilities to private-sector companies like Amazon, Ashley Furniture, and Domino’s Pizza. The author argues that because Domino’s owns its dough-manufacturing centers and delivery fleets, electric utilities should be allowed to own both power plants and distribution wires.

This comparison falls apart the moment you look at who bears the financial risk.

If Domino’s builds a dough factory that goes over budget, or if Amazon launches a private-label product that nobody buys, their private shareholders absorb the loss. But electric utilities operate and rate base it—the investment risk is entirely shifted from private shareholders to captive customers.

If a utility-owned power plant runs over budget, breaks down, or becomes economically unviable, the utility still recovers its costs plus a regulated rate of return through monthly electric bills. The consumer has no “choice” but to pay it. That is the exact opposite of free-market competition.

To be clear, utility-owned generation is not competition. It is a guaranteed return on investment shifted onto captive ratepayers. It’s also important for readers to understand that utilities can already build power generation in PJM within the competitive market structure and some utilities already do. This isn’t about advancing a solution, utilities want to take advantage of a challenge to increase their already robust profits.

For decades, New Jersey and other states in the PJM Interconnection region have benefited from competitive wholesale electricity markets. In this market structure, Independent Power Producers (IPPs) use their own at-risk capital to build new generation. If their power plant is inefficient or unnecessary, the IPP and its investors take the financial hit—not New Jersey ratepayers.

This system forces generators to innovate, operate efficiently, and compete on a level playing field to provide electricity as affordably as possible. Allowing utilities to socialize the costs and risks of generation through ratepayer-backed recovery would destroy this dynamic. It would drive competitive, private investment out of New Jersey, leaving consumers footing the bill for expensive, utility-backed projects.

In fact, independent analysis has consistently shown that reverting to utility-owned generation structures would lead to hundreds of millions of dollars in net cost increases for New Jersey ratepayers.

Proponents of utility-owned generation often point to recent tightening in PJM capacity auctions and rising prices as a reason to abandon the competitive model. It is true that capacity prices have risen, but this is exactly how a market is supposed to work: the price signal indicates that supply is tight, which incentivizes private developers to build more generation.

The barrier to new generation is not the market design; it is the staggering delays in permitting in many PJM states, most notably New Jersey, and interconnection queues. Private developers have the capital and the desire to build new power plants in the PJM footprint right now. In fact, since 2024, more than 43,000 MW of new generation have been announced or are under construction, and are expected to enter the PJM regional grid. This is evidence of a definitive and robust market response.

Several of these projects are located in New Jersey and are ready to be built today with state approvals.

Instead of blowing up a market structure that protects consumers from investment risk, New Jersey policymakers need to focus on the actual roadblocks.

Streamlining permitting to bring new, competitive generation online faster. Implementing a true all-of-the-above energy strategy, so that independent power producers have the confidence to make long-term investments. Finally, continuing to reform the interconnection queue at PJM will help clear the backlog of projects waiting to connect to the grid.

Genuine choice means preserving competitive wholesale markets where private investors take the risks, and ratepayers reap the benefits of efficiency and innovation.