What You’ll Learn
- What PSE&G residential customers are paying in 2026 and what changes on June 1
- How the February 2026 BGS auction affected the PSE&G supply rate
- What the Temporary Supply Offset Clause did and what happens when it expires on May 31, 2026
- How PSE&G’s 2024 distribution rate case still shapes your bill
- What options PSE&G customers have to reduce or stabilize electricity costs
Introduction
PSE&G is New Jersey’s largest electric and gas utility, serving approximately 2.3 million electric customers across a 2,600-square-mile corridor from Bergen County in the north to Gloucester County in the south. If you live in Newark, Jersey City, Elizabeth, Trenton, Edison, New Brunswick, or any of the 300-plus municipalities in PSE&G territory, you are in the densest-populated utility footprint in the state.
You have also absorbed roughly a year and a half of sharp cost pressure. The February 2025 BGS auction triggered a 17.24 percent bill increase that hit in June 2025. PSE&G and the NJBPU responded with a Temporary Supply Offset Clause to spread the impact across the energy year. That temporary credit expires on May 31, 2026. The February 2026 BGS auction results offer a modest reprieve on the supply side, but only after accounting for the TSOC expiration.
This guide breaks down what PSE&G customers are paying in 2026, what the February 2026 BGS auction actually changed, what the end of the TSOC means for summer bills, and what the continuing pressure from the PJM capacity market is likely to do to rates going forward.
What PSE&G Customers Are Paying in 2026
As of April 2026, the average all-in PSE&G residential electricity rate, covering BGS supply, distribution, transmission, societal benefits, and all applicable riders, is approximately 26 cents per kWh.
The NJBPU’s February 12, 2026 BGS auction certification set the PSE&G average residential monthly bill at $180.23 effective June 1, 2026. That is a $3.23 decrease from the prior year’s $183.46, or roughly 1.8 percent. For a typical PSE&G residential household using approximately 700 kWh per month (the benchmark used in NJBPU reporting), this is what the utility will be billing before any credits or offsets are applied.
The key context behind that decrease: it is a comparison to bills that already reflected the large June 2025 increase, and it is the pre-credit number. Once the Temporary Supply Offset Clause expires on May 31, 2026, the bill comparison for customers who had been receiving the TSOC credit will look different than the headline 1.8 percent decrease suggests.
PSE&G’s BGS auction procures approximately one-third of the utility’s residential load each year on a rolling three-year basis. This smoothing mechanism is why PSE&G bills do not swing as sharply as utilities in other PJM states that procure supply annually. But it also means rate adjustments take longer to fully reflect market conditions, up or down.
What Changed on June 1, 2025 and What Changes on June 1, 2026
Two distinct cost events have driven PSE&G bills over the past two years. Understanding both matters because they came from different places and reversed at different times.
June 1, 2025: The 17.24 Percent BGS Supply Increase
On February 7, 2025, the NJBPU certified the results of the 24th annual BGS auction. For PSE&G, the result was a supply cost jump that translated into a projected 17.24 percent increase in the average residential monthly bill starting June 1, 2025.
The primary driver was not PSE&G itself. The single largest force was the July 2024 PJM Base Residual Auction, which cleared at $269.92 per megawatt-day for the 2025/2026 delivery year — up from roughly $29 per megawatt-day the prior year. That is an increase of over 800 percent in wholesale capacity prices, and BGS suppliers pass those costs directly through to customers with no buffer.
The Temporary Supply Offset Clause (TSOC)
In response to the June 2025 bill spike, PSE&G filed with the NJBPU in May 2025 proposing a Temporary Supply Offset Clause. The TSOC was approved in June 2025 and worked as follows:
- Residential customers received a bill credit during July, August, and September 2025 to offset the summer-peak months
- The credited amount was recovered over the October 2025 through May 2026 period
- PSE&G voluntarily waived the carrying charges on the deferred recovery
- The TSOC expires on May 31, 2026
This was a smoothing mechanism, not a reduction. The underlying supply costs were the same; the TSOC just moved when customers paid them. For customers who used typical amounts during summer 2025, the credit made summer bills lower than they otherwise would have been, and winter bills somewhat higher than they otherwise would have been.
June 1, 2026: The Smaller BGS Adjustment and the TSOC Expiration
The February 12, 2026 BGS auction certification produced much smaller adjustments than the prior year. For PSE&G specifically, the result is a $3.23 decrease in the average residential monthly bill, bringing it to $180.23 effective June 1, 2026.
Two things shape how that lands for individual customers:
- The BGS auction result itself reflects a stabilization, not a reset. Winning prices for all four NJ utilities actually rose slightly compared to the prior year, driven by higher PJM wholesale energy costs and capacity prices. The PJM price collar mechanism — a cap of $325 per MW-day and a floor of $175 per MW-day adopted in February 2025 — prevented much larger increases. The PSE&G decrease is the rolling three-year procurement averaging in less expensive legacy supply contracts against the higher new ones.
- The TSOC ends on May 31, 2026. Customers who were receiving the temporary credit during fall, winter, and spring months will no longer receive it starting June 1. For those customers, the actual bill change from April to June 2026 will reflect the loss of the credit alongside the small BGS decrease.
The net effect: the 1.8 percent headline decrease in the BGS component is real, but it is not a broad-based drop in what PSE&G customers actually pay month to month.
Breaking Down Your PSE&G Bill
Your PSE&G bill has several components, and each responds to different forces.
BGS Supply Charges
This is the cost of the electricity itself, the generation and transmission portion of your bill. For customers on default service, this is the PSE&G BGS-RSCP (Residential Small Commercial Pricing) rate, set through the annual February auction and effective each year from June 1 through May 31.
The BGS rate is the single largest component of your bill and the portion most affected by PJM capacity costs. It is also the portion you can change by switching to a competitive supplier or by generating your own power.
Distribution Charges
These are the charges for delivering electricity through PSE&G’s local infrastructure. Distribution rates are set by the NJBPU in periodic base rate cases.
PSE&G’s current distribution rates reflect the October 2024 settlement of the utility’s first base rate case since 2018. That settlement produced a typical combined residential electric and gas customer bill increase of approximately 7 percent, or about $15 per month. The revenue supports grid resilience, energy efficiency programs, and infrastructure modernization.
Transmission and Other Charges
Your bill also includes:
- Societal Benefits Charge (funds Clean Energy Program, Universal Service Fund, and related programs)
- Green Programs Recovery Charge
- Transmission Enhancement Charge
- Non-Utility Generation Charge
- Sales Tax Adjustment
- Temporary Supply Offset Clause (through May 31, 2026 only)
These line items individually are small but collectively contribute meaningfully to the gap between the headline BGS rate and the roughly 26 cents per kWh all-in figure.
How PSE&G Compares to Other NJ Utilities in 2026
For context, here is how the February 2026 BGS auction results affected the four NJ electric distribution companies, effective June 1, 2026:
| Utility | Avg. Monthly Bill Change | New Avg. Monthly Bill |
|---|---|---|
| PSE&G | Down $3.23 (1.8% decrease) | $180.23 |
| JCP&L | Up $2.23 (1.6% increase) | $137.47 |
| Atlantic City Electric | Up $0.22 (0.11% increase) | $201.76 |
| Rockland Electric (RECO) | Down $1.17 (0.7% decrease) | $168.93 |
PSE&G’s average monthly bill sits in the middle of the four utilities. That reflects its population density (higher absolute load, lower per-customer distribution cost) and its three-year rolling procurement that smooths supply volatility. The rank order is current but fluid. Each utility has its own BGS auction cadence and its own distribution rate case history.
→ Electricity Rates by Utility in PA, NJ, and DE
Why PSE&G Rates Have Moved the Way They Have
Four structural forces are behind PSE&G’s rate trajectory, and they are not going away.
1. The PJM Capacity Market
PSE&G sits inside the PJM Interconnection footprint, the 13-state regional grid operator that manages wholesale electricity supply. PJM runs an annual capacity auction where generators bid to guarantee availability during peak demand. The capacity price is a direct input to the BGS supply rate.
Capacity prices have moved as follows:
- 2024/2025 delivery year: $28.92 per MW-day
- 2025/2026 delivery year: $269.92 per MW-day
- 2026/2027 delivery year: $329.17 per MW-day (at the FERC-approved price cap)
- 2027/2028 delivery year: $333.44 per MW-day (at the updated cap)
That is an 1,100 percent increase over three years. According to PJM’s independent market monitor, data center load accounted for approximately 40 percent of the $16.4 billion cleared in the December 2025 capacity auction. Without the Shapiro-era price collar, the 2027/2028 auction would likely have cleared closer to $530 per MW-day.
PSE&G’s own 2026 BGS company-specific addendum uses a capacity proxy price of $270.43 per MW-day for the 2026/2027 delivery year and $280 per MW-day placeholder for future years, reflecting how these costs feed into the supply rate calculation.
2. The 2024 Base Rate Case
In October 2024, the NJBPU approved the settlement of PSE&G’s first distribution base rate case since 2018. The settlement produced the 7 percent combined electric and gas bill increase that showed up on January 2025 bills.
The case funded continued investment in the PSE&G distribution system, energy efficiency program delivery, and the separately approved $1.4 billion Gas System Modernization Program (GSMP III), which began January 2026 and runs three years. GSMP III replaces cast iron and bare steel gas mains across the service territory. The electric distribution investments are comparable in scale.
3. Continued PJM Capacity Market Pressure
PJM’s demand forecast for the 2027/2028 delivery year increased by 5,250 MW over the prior year, with nearly 5,100 MW of that growth coming from data centers across the 13-state PJM region. The July 2026 auction will not include the Shapiro-negotiated price cap, which is likely to produce uncapped prices higher than the current capped results (though some observers expect the cap to be reinstated).
For PSE&G customers, this translates into sustained supply-rate pressure in the February 2027 BGS auction and the June 2027 rate change that follows.
4. The Temporary Supply Offset Clause Expiration
When the TSOC expires on May 31, 2026, PSE&G customers who were receiving the credit return to uncredited billing. The February 2026 BGS auction produced a small decrease, but the loss of the TSOC credit offsets that decrease in the opposite direction for customers who had been benefiting from it.
The NJBPU is actively exploring next steps for supply-cost mitigation, including the use of Clean Energy Program funding to offset costs starting in June 2026. But no successor mechanism to the TSOC has been finalized as of this writing.
What Options Do PSE&G Customers Have?
New Jersey’s deregulated electricity market gives PSE&G customers four real options for addressing rate pressure.
Shop for a Competitive Supplier
Through NJPowerSwitch.com, residential customers can compare fixed-rate and variable-rate plans from licensed competitive electricity suppliers. Fixed-term contracts protect against future BGS increases for 12 to 36 months. This is most useful if you believe rates will continue rising and you want to lock in a ceiling.
The tradeoff: competitive supplier plans typically carry early termination fees, and a rate that looks attractive today could underperform future BGS results if wholesale prices drop. Given current PJM trajectory, the downside scenario looks unlikely. But you are only changing the supply portion of the bill. Distribution and delivery charges stay on your PSE&G bill.
Reduce Consumption
Energy efficiency measures like LED lighting, smart thermostats, insulation upgrades, high-efficiency HVAC, heat pump water heaters — reduce the number of kWh you consume. At 26 cents per kWh all-in, every kilowatt-hour eliminated saves real money. PSE&G’s Clean Energy Program offers rebates and on-bill financing for qualifying upgrades. Efficiency reduces volume, not price per unit.
Generate Your Own Electricity with Solar
Solar panels let you produce your own electricity at a cost determined the day your system is installed. Unlike switching suppliers or cutting consumption, solar restructures your relationship with the utility.
For a typical residential solar installation in PSE&G territory, the levelized cost of solar over a 25-year system life runs well below the current PSE&G all-in rate of approximately 26 cents per kWh, and that cost does not rise with BGS auctions, PJM capacity results, or distribution rate cases.
New Jersey has one of the strongest state-level solar incentive programs in the country, and those programs are fully available to PSE&G customers in 2026:
- SREC-II through the Successor Solar Incentive (SuSI) ADI Program: For every megawatt-hour your solar system produces, you earn one SREC-II valued at $85 per MWh for 15 years from your system’s interconnection date. Unlike Pennsylvania’s variable SREC market, this is a fixed, predictable income stream that layers on top of bill savings.
- 1:1 Retail Rate Net Metering: New Jersey requires all investor-owned utilities, including PSE&G, to credit excess solar production at the full retail rate. Credits roll over month to month and reconcile annually. At 26 cents per kWh, each excess kilowatt-hour is worth more every year the grid rate rises.
- 100% Property Tax Exemption: The added home value from solar is exempt from property tax in NJ.
- Sales Tax Exemption: Solar energy systems are exempt from NJ’s state sales tax.
Every cent added to PSE&G rates shortens the solar payback period. Net metering at 26 cents per kWh is materially different from net metering at the mid-teens rates customers saw a few years ago.
Are PSE&G Rates Going to Keep Rising?
The short answer is that the direction of travel is up, but with moderation from specific policy interventions.
Structural factors pushing rates higher:
- Continued data center load growth across the PJM region, with no near-term resolution
- The July 2026 PJM capacity auction will run without the Shapiro-negotiated price collar (unless reinstated before the auction)
- PSE&G’s ongoing infrastructure investment program, including GSMP III through 2028 and continued electric distribution investments
- Expiration of the Temporary Supply Offset Clause on May 31, 2026
Factors providing some near-term moderation:
- The three-year rolling BGS procurement structure smooths supply rate changes
- The NJBPU’s exploration of Clean Energy Program funding as a successor mitigation mechanism
- The possibility that PJM price caps will be extended beyond the current auction
- Federal and state-level policy discussions around data center cost allocation
For PSE&G customers, planning for continued elevated rates is more realistic than planning for a return to pre-2025 levels. The February 2026 BGS decrease was good news in absolute terms; it was not the start of a downward trend.
How Sunwise Can Help
Sunwise Energy works with homeowners across the PSE&G service territory, from Bergen and Essex counties in the north through Middlesex and Mercer in the center to Camden and Gloucester in the south. Our team understands PSE&G’s rate structure, the BGS auction mechanism, the Clean Energy Program, and the SREC-II ADI program, and we build that context into every proposal we put together.
If rising PSE&G rates have you evaluating alternatives, a consultation with our team gives you a clear picture of what solar would cost, what it would save, and how the numbers work for your specific home.
NJ Electricity Rate FAQs
How much are PSE&G electricity rates in 2026?
he average all-in PSE&G residential electricity rate in 2026 is approximately 26 cents per kWh, covering supply, distribution, transmission, societal benefits charges, and all applicable riders. A typical residential customer’s average monthly bill is $180.23 beginning June 1, 2026 per the NJBPU’s February 2026 BGS auction certification. That reflects a $3.23 monthly decrease from the prior year, or about 1.8 percent.
What is the PSE&G BGS rate?
The Basic Generation Service (BGS) rate is PSE&G’s default supply rate for residential and small commercial customers who have not switched to a third-party electricity supplier. PSE&G procures BGS supply through the annual NJBPU auction held every February. The rates set in each auction take effect June 1 and run through May 31 of the following year. About one-third of the load is procured each year on a rolling three-year basis.
What was the PSE&G Temporary Supply Offset Clause?
In May 2025, PSE&G filed with the NJBPU to create a Temporary Supply Offset Clause (TSOC) providing residential customers with a temporary credit from July 1, 2025 through May 31, 2026. The purpose was to soften the 17.24 percent bill increase triggered by the February 2025 BGS auction. The credit was recovered over the same period with carrying charges waived. The TSOC expires on May 31, 2026.
When was PSE&G’s last distribution rate increase?
In October 2024, the NJBPU approved PSE&G’s first distribution base rate increase since 2018. The settlement resulted in a typical combined residential electric and gas customer bill increase of approximately 7 percent, or about $15 per month. The increase funds continued investment in grid resilience, energy efficiency, and the Gas System Modernization Program (GSMP III), which was separately approved at $1.4 billion over three years beginning January 2026.
Can I switch electricity suppliers in PSE&G territory?
Yes. New Jersey’s Energy Choice program allows residential PSE&G customers to compare and select a competitive electricity supplier through NJPowerSwitch.com. PSE&G remains your delivery utility regardless of which supplier you choose. Distribution and delivery charges stay on your PSE&G bill; only the generation supply portion changes.
Will solar panels reduce my PSE&G bill?
A properly sized residential solar system can significantly reduce the supply portion of your PSE&G bill through direct production and net metering credits at the full retail rate. You will still see a monthly service fee for grid connection. Combined with New Jersey’s SREC-II program under the ADI, which pays $85 per MWh for 15 years, PSE&G customers are in one of the strongest solar economic environments in the country at current rate levels.
The information in this guide is for informational and educational purposes only and does not constitute legal, financial, or tax advice. Utility rates, regulatory decisions, and market conditions change frequently. Consult qualified professionals regarding your specific circumstances.
