PSE&G Is Cutting Gas Bills 5% This Fall — Your Electric Bill Isn't Getting the Same Deal

On June 5, 2026, PSE&G filed a request with the New Jersey Board of Public Utilities to lower residential natural gas bills by roughly 5%, effective October 1, 2026, pending BPU approval. Nearly 1.9 million PSE&G gas customers would see it. That effective date is now about two weeks away, right as thermostats across New Jersey start creeping back up for fall.

I think that's genuinely good news, and I want to say so plainly before I do what I always do here and give you the fuller picture. My name is CJ Smith. I own Solar 4 Heroes. I install rooftop solar systems for homeowners across New Jersey and the East Coast, and I write these posts because I'd rather you hear the honest version of what's happening to your energy bills than the version that sells better. This week's honest version is: your gas bill may be about to get a little friendlier heading into winter. Your electric bill is a completely different story, and nothing about this filing changes it.

---

What PSE&G Actually Filed For

Figures per PSE&G's June 5, 2026 announcement and subsequent coverage. The reduction is a proposal awaiting Board of Public Utilities approval, not a finalized rate as of this week.

PSE&G says the driver is procurement strategy, not a one-time favor. The company forecasts winter demand and locks in gas supply well ahead of the coldest months, which insulates customers from buying at the price spikes that hit spot markets in January and February. PSE&G also makes the point — accurately, and worth knowing as a homeowner — that utilities don't earn a profit margin on the natural gas commodity itself. What customers pay for gas supply is a pass-through of what the utility paid to secure it. When PSE&G's hedging works out well, customers see it directly in a lower Basic Gas Supply Service rate. That's a genuinely different mechanism than how your electric supply rate gets set, which is the part of this story I don't want to get lost.

I'd also note this isn't the first time PSE&G has done this. The utility cut gas bills by a similar margin in 2024, when a comparable reduction brought the average residential customer using around 100 therms a month down by roughly $6, to about $104. I'm citing that only as historical context for what a reduction in this range has looked like before — PSE&G hasn't published an exact per-household dollar figure for this specific 2026 filing yet, and the final number will depend on where gas commodity prices land when the rate is actually set.

---

Why Gas Can Go Down While Electric Doesn't

Here's the mechanical difference that explains why this filing is genuinely good news and genuinely doesn't touch your electric bill at all.

Natural gas supply is a commodity PSE&G buys directly, largely from one well-understood regional source, and passes through to customers at cost. Good forecasting and forward buying can meaningfully move that number, in either direction, and this year it moved in customers' favor.

Electric supply doesn't work that way. New Jersey buys the electric supply portion of your bill through an annual regional auction — Basic Generation Service, or BGS — and the price that auction clears at is shaped heavily by PJM Interconnection's capacity market, the regional mechanism that pays power plants to guarantee they'll be available when the grid needs them. I've written about PJM's capacity auctions before, because they're the single biggest reason New Jersey electric bills have climbed the way they have. Nothing in PSE&G's gas procurement strategy touches that market at all. A utility can be excellent at buying gas and still have zero control over what a regional capacity auction 200 miles away decides electricity is worth.

---

What Actually Happened to Electric Rates This Year — And Why It's More Fragile Than It Looks

Here's where I want to be precise, because the honest answer is more nuanced than "electric only goes up." The BPU certified this year's BGS auction results on February 12, 2026, for supply beginning June 1, 2026. The changes were small across the board:

Figures from the NJ Board of Public Utilities' February 12, 2026 certification of the 2026 BGS auction.

PSE&G customers actually saw a small decrease this cycle. I want to give that its due — it's real, and it's the opposite of the trend I usually have to report here. But two things explain why it happened, and why I wouldn't bank on it repeating.

First, PSE&G's BGS rate blends supply contracts purchased over a rolling three-year window, so this year's number reflects a mix that includes some earlier, cheaper contracts averaging down what would otherwise be a steeper increase. Second, all four utilities' increases were this modest because of a price collar FERC approved for PJM's capacity auctions — a floor of $175 per megawatt-day and a ceiling of $325 per megawatt-day, first approved for the 2026/2027 and 2027/2028 delivery years and extended on April 28, 2026 to also cover 2028/2029 and 2029/2030. That collar capped how high this year's costs could push rates — but it also guarantees the floor: capacity prices can't fall below $175 per megawatt-day through 2029/2030, no matter how much new generation eventually comes online. There's a ceiling on the pain, but also a floor under the cost, and PJM's actual auctions have landed at or near that ceiling in every recent delivery year I've tracked.

That matters for what comes next. The BGS auction that sets New Jersey's electric supply rate for June 2027 runs in February 2027, and PJM's own long-term forecast — driven substantially by data center growth across its 13-state footprint — points toward continued capacity tightness, not relief. This year's modest, mixed electric results were the product of a rolling-average contract structure and a price collar doing exactly what it was designed to do. Neither of those facts means the underlying pressure on electric supply costs has eased.

---

One More Reason Not to Expect Fast Relief

There's a second story unfolding in September 2026 that reinforces the same point. FERC Chairman Laura Swett has said PJM is facing what she called a "grave legitimacy crisis" over its governance and stakeholder process, and FERC gave PJM until the end of this month to adopt its own reforms or have federal regulators impose changes directly. FERC has been running a formal dispute-resolution forum with PJM stakeholders throughout September to try to reach that package.

Worth knowing, and worth being honest about the timeline: even if PJM and FERC land on a reform package by month's end, a governance fix is not a rate fix. It changes who has a seat at the table when future auction rules get written. It doesn't retroactively lower what the last several auctions already locked in, and it won't show up as a number on anyone's October bill.

---

The Honest Comparison

If your home heats with gas, this PSE&G filing is worth watching, and I'd genuinely encourage you to welcome it if the BPU approves it next month. But if any part of your home runs on electricity — and for the overwhelming majority of New Jersey households, that's true for far more than just gas heat — this filing doesn't touch the line item that's actually been driving your total bill upward over the past several years. New Jersey's solar incentive stack remains solid heading into fall 2026: net metering credits excess solar production at the full retail electric rate, the SuSI/ADI incentive currently pays around $77 per megawatt-hour for newly registered residential systems for 15 years (down from $85 in the prior registration block, as the program is designed to step down over time), and the state's sales and property tax exemptions on solar equipment remain automatic.

---

Frequently Asked Questions

Is PSE&G's 5% gas bill cut approved yet?

Not as of this week. PSE&G filed the request with the NJ Board of Public Utilities on June 5, 2026, proposing an effective date of October 1, 2026. It's a filing awaiting a final BPU order, not a rate that's guaranteed yet — though PSE&G has a track record of securing similar reductions in past years.

Will this gas bill cut lower my electric bill too?

No. This filing affects only PSE&G's residential natural gas supply rate. Electric supply rates are set through a separate annual auction process (Basic Generation Service) shaped by PJM's regional capacity market, which this gas procurement filing has no connection to.

Why did PSE&G's electric rate go down slightly this year if PJM's capacity costs are rising?

PSE&G's Basic Generation Service rate blends supply contracts purchased over a rolling three-year window, so this year's small decrease reflects some earlier, cheaper contracts averaging down the total. It was also helped by a FERC-approved price collar that caps how much capacity costs can push the auction in a given year. JCP&L and Atlantic City Electric customers, with different contract blends, saw small increases in the same auction.

What is PJM's capacity price collar, and how long does it last?

It's a FERC-approved floor and ceiling — $175 to $325 per megawatt-day — on what PJM's capacity auctions can clear at. It was first approved for the 2026/2027 and 2027/2028 delivery years and extended on April 28, 2026 to also cover 2028/2029 and 2029/2030. It limits how high prices can spike in a single year, but it also guarantees capacity costs won't fall below $175/MW-day through the end of the decade.

Does solar help with my gas heating bill?

Not directly — solar panels generate electricity, not gas. If your home heats with a gas furnace or boiler, solar won't reduce that portion of your bill. It will reduce or eliminate the electric portion of your bill, which for most New Jersey homes — lighting, cooling, appliances, and increasingly EVs and electric heat pumps — is the larger and faster-growing piece of total household energy cost.

What are New Jersey's current solar incentives?

As of fall 2026, New Jersey offers 1:1 net metering at the full retail electric rate, the SuSI/ADI incentive currently paying around $77 per megawatt-hour for newly registered residential systems over a 15-year term, and automatic state sales and property tax exemptions on solar installations. The federal residential tax credit expired at the end of 2025 for direct purchases but remains available through certain lease and PPA financing structures.

---

The Bottom Line

I'll take good news where I can find it, and a roughly 5% cut to nearly 1.9 million households' gas bills, if the BPU approves it next month, is good news heading into a New Jersey winter. But I'd be doing my customers a disservice if I let that headline stand in for the bigger picture. The mechanism that's actually been driving New Jersey electric bills higher — PJM's capacity market — didn't get any friendlier this month. It got a price floor that guarantees it can't drop much for years, a governance fight that FERC is trying to force to a head by the end of September, and a demand forecast, driven heavily by data centers, that points toward more tightness, not less.

A gas bill cut is worth celebrating and doesn't require a single decision from you. An electric bill that's structurally exposed to a capacity market operating near its ceiling is the one I'd actually want to do something about — and that's the conversation I have with homeowners every week.

Solar made easy.

📞 Call or text us directly
💻 Get a free quote at Solar4Heroes.com

---

Solar 4 Heroes serves homeowners across CT, DE, FL, MA, MD, NH, NJ, NY, PA, RI, and VA. Call us at (856) 308-5144 or reach out at cj@solar4heroes.com.