New Jersey is studying potential changes to how electric utilities invest, earn returns, and recover costs. The decisions that emerge from this process could influence customer bills, grid investment, utility accountability, and who bears the risks associated with New Jersey’s changing energy system.

The Board of Public Utilities recently completed Phase 1 of its utility business model study, concluding that the current model was not designed to maximize affordability. It also found that no single reform offers a complete solution: outcomes will depend on how different proposals interact and are implemented.

Phase 2 will quantify the potential effects of reforms including:

• Changes to utility capital structures and authorized returns
• Performance-based ratemaking
• New approaches to allocating costs and risks
• Stronger accountability requirements
• Better coordination with grid modernization efforts

Each option could affect costs, reliability, and investment differently, and each will draw supporters, critics, and revisions as the analysis develops.

The BPU will next convene advisory groups to refine the analysis—a process likely to draw significant commentary from utilities, consumer advocates, clean-energy organizations, businesses, and other interested parties. That scrutiny is appropriate. Before changing the system that finances and maintains essential infrastructure, policymakers must understand what each proposal could deliver, along with its costs, tradeoffs, and unintended consequences.

Affordability must remain central, but it cannot be separated from reliability, infrastructure needs and New Jersey’s ability to attract long-term investment. A reform that reduces one cost could shift it elsewhere, delay necessary upgrades or create new risks for customers.

The BPU must also make this technical process accessible to the public. Meaningful participation requires clear explanations of what is being considered, why it matters, and how customers could be affected. The Phase 2 report is tentatively expected in early 2027. Until then, proposals will evolve, the analysis will be tested, and many perspectives will be heard.

AENJ will follow the process closely, help members and the public understand the options, and evaluate reforms through the lenses of affordability, reliability, transparency, and long-term investment. For now, the study is underway; its next phase is beginning, and the conversation around New Jersey’s utility model is about to get much more active.