Evergreen Action and Power Play New Jersey Poll Finds New Jersey Voters Struggling with Electric Bills and Support for Reforming Utilities

Contact: Miles Cunning

Trenton, NJ – New Jerseyans want relief from high electric bills and new polling shows broad support for changing the utility business model. Two in three voters call their bills unaffordable with 14% reporting that they used a buy now pay later service such as Klarna or Afterpay at least once to pay for their electric bills, a new poll by Evergreen Action and Power Play New Jersey found. 

“It’s no surprise that New Jerseyans are feeling the pain of higher electric bills, but what is particularly striking is both the intensity of the pain and the measures some ratepayers are employing to try to stay current on their bills,” said Catherine Zingg, Northeast/Mid-Atlantic Regional Director for Evergreen Action. “One in seven New Jersey voters reported using a buy now pay later service to pay for their electric bills, which equates to just over a half a million ratepayers turning to credit products that are not visible to the utilities or regulators,” continued Zingg. 

Voters were asked on a scale of 1 to 10 how affordable their electric bills are with 1 being most affordable and 10 being least. Over a third of New Jersey voters were at a 10 and 66% were at a 7 and above. Voters are also not seeing much value in what they pay for electricity, with 70% saying what they pay is unreasonable for what they get. 

The poll also asked voters in their own words how their electric bills have impacted their lives. Roughly a quarter of voters who volunteered a response indicated that they are not only cutting back to afford their bills, but in many cases are talking about whether to forgo one basic need for another. 

“Tackling energy affordability is a massively complex challenge, and unfortunately, no governor or state legislature can wave a magic wand to fix it,” said Winn Khuong, Executive Director for Action Together New Jersey. “It would be great if there was one big fix, but the reality is that we have to address each part of the system where costs have artificially inflated and that includes reforming the way utilities, which are regulated monopolies, do business,” said Khuong. “Governor Sherrill recognized this in her first executive order and our polling shows voters are supportive of bold action.” 

Utilities earn a guaranteed profit called return on equity on the infrastructure and equipment they build. In New Jersey, the average is about 9.6%. This arrangement can incentivize unnecessary spending on building rather than other more cost effective solutions. Utilities are also regulated monopolies, meaning they do not have to compete for customers in their service areas. Because of this, utility stocks have historically been among the safest investments. When an investment is safe, it typically means returns for shareholders are steady and reliable with comparatively lower returns, which results in a lower risk premium. Since the 1980s, risk premiums for utilities have ballooned from 3% to 7%, meaning investors are enjoying both the safety of a utility stock while making the returns of an investment that should be much riskier. That cost effectively gets passed on to ratepayers. 

“We found that half of New Jersey voters are supportive of lowering utilities’ guaranteed profits with virtually no opposition,” said Kartik Amarnath, Mid-Atlantic Regulatory Director at Vote Solar. “In the question, we even conceded the false utility talking point that reducing guaranteed profits would result in more expensive capital to invest in the grid, and yet respondents still wanted these profits lowered.” continued Amarnath. “ The reality is low risk utilities can and should have far lower returns on equity while still improving grid reliability. Anything less is a wealth transfer.” 

The full polling memo is available here.

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