Can New Jersey Keep the Lights On? Rethinking Resource Adequacy in PJM

Ben Ghiano, GTB Partners

On August 5, the New Jersey Board of Public Utilities (NJBPU) convened a technical conference focused on one of the most urgent questions facing our state’s energy future: how do we ensure resource adequacy, that is, having enough reliable power generation to meet our demand, while transitioning to a cleaner grid?

New Jersey’s energy reliability is not something we can take for granted. We currently import 30–40% of our power daily, and according to a snapshot presented during the conference, we had a -3,978 MW power flow on August 1. That same day, Pennsylvania had a +13,564 MW surplus, roughly 40% more than it needed. This dependency on imported power, combined with growing demand from data centers, electrification, and extreme weather events, puts our state in a precarious position.

So the real question is: Where does New Jersey go from here?

The Near-Term Challenge: Biding Time While We Build

Everyone in the room agreed on the basics: we need more in-state generation, and fast. Summer and winter load growth is projected at over 3% annually, driven by energy-intensive users like data centers, while EVs are a smaller but growing part of the equation. But new gas plants take 5–7 years to come online. Nuclear? At least a decade. Even the fastest-to-market resources like solar and storage take 1.5–3 years.

So what do we do in the meantime?

In the short term, we need smarter forecasting, better demand-side management, and market rule changes that eliminate speculative or artificial demand. Higher gating criteria for new projects and stronger coordination across PJM states can ensure we’re building resources where and when they’re truly needed. We also need to give serious consideration to policies that help developers navigate siting, permitting, and interconnection with fewer delays.

Incentivizing new resources isn’t just about price signals, it’s also about cutting through bureaucracy.

Let the Market Work

One idea that continues to resurface, re-regulating energy markets (vertical integration of our utilities), is not the solution. While re-regulation may seem attractive as a way to ensure reliability, it fundamentally shifts the risk of bad investments away from developers and onto New Jersey ratepayers.

We only need to look at the offshore wind experience to see why this is the wrong approach. Those projects didn’t expose ratepayers to financial risk because they were market-driven. In contrast, re-regulated environments often lead utilities to overbuild at the public’s expense, whether the generation is needed or not.

The capacity market may not be perfect, but it provides critical price signals. For the first time in years, prices are high enough to signal the need for new development. Let’s use those signals, not override them with top-down mandates that burden residents and businesses.

The Role of State Driven Leadership

New Jersey has a critical role to play here. We can:

• Continue streamlining permitting and siting processes.
• Offer targeted incentives to accelerate the development of in-state generation and storage.
• Help shape PJM’s reforms to ensure better load forecasting, faster interconnection queues, and proactive transmission planning work for New Jersey’s unique needs.

We should also support technologies and business models that align with our reliability goals. “Bring your own power” (non-firm, non-capacity-backed loads) may help data centers meet their own needs without further straining the grid, but only if there’s PJM-wide coordination.

The Bottom Line

Resource adequacy isn’t just a technical issue; it’s a policy challenge. The decisions we make now will shape New Jersey’s energy future for decades to come.

We must act decisively to support new resource development and reform the market structures that inhibit progress. New Jersey can meet its growing energy needs, but only if we let markets work, remove barriers to development, and align state policy with the urgent realities of our time.

 

You can watch a replay of the BPU technical conference here.