Government

Seaside Heights Electricity Rate to Increase, Following National Trend

by
Daniel Nee
March 14, 2025

Utility Pole (Credit: Maëlick/Flickr)

Seaside Heights municipal electric customers will see rates increase this summer, as utility providers across the country are facing higher capacity costs due to a loss of generation plants, green initiatives and other factors.

The borough is one of nine towns in New Jersey that owns and operates its own electrical utility. Locally, Lavallette also operates an electrical utility and, likewise, was forced to raise rates earlier this year. Seaside Heights will begin charging the higher rate July 1, 2025. Rates will rise from 18 cents per kilowatt hour to 21 cents per kilowatt hour.

The rates are a product of skyrocketing prices at what are known as capacity auctions, held once a year. Capacity auctions are a mechanism used by regional grid operators like PJM – the Pennsylvania-Jersey-Maryland grid – to secure enough electricity generation capacity to meet future demand. Capacity costs rose from $2.6 billion to $14 billion at the last auction, as coal-fired plants are forced offline by regulators and nuclear plants are aging out of commission with no replacements. Meanwhile, states including New Jersey have mandated a certain percentage of energy be generated by solar and wind power, which are more expensive than fossil fuel-based energy.

“If you’ve seen the news very recently in the last week, you’re seeing more reporting about it because it’s not just Seaside Heights,” said Borough Administrator Christopher Vaz. “It’s JCP&L, it’s PSEG, and it’s all of the grids in America. The capacity auction problem is really universal across the country. It’s a high-level decision-making process that got us to where we are in terms of congressional and presidential action, but it’s literally out of our control.”

The New Jersey Public Power Association is a body that consists of representatives from the nine public power companies in New Jersey, run by individual towns. The electricity rates in all of those communities, including Seaside Heights, is lower than neighboring towns which use commercial utilities such as JCP&L, however the rates are forced higher due to a dearth of energy available on the market.

“They had done a cost analysis for each of the nine towns, and said, ‘Hey, your town is going to lose this if you don’t increase the rate, your town is going to lose this, etcetera,'” Vaz explained. “He helped Seaside and the other eight towns come up with what we think is going to keep us even in terms of that capacity cost.”

Recently, JCP&L was granted permission by the state Board of Public Utilities to raise its rates by 20.2 percent this year. Vaz said ratepayers could face another increase if market conditions do not change by the time this year’s auction is held.

“Unfortunately, unless things change very soon, when the next capacity market auction happens in the spring, it could be as bad or worse. That’s the forecast that we’re reading right now,” he said.