Utility Cost Recovery Filing Could Shape NJ Rates
Businesses with large electric loads in New Jersey should track the coming distribution rate filing and nuclear supply changes at Salem.
Updated on Nov. 3, 2026 in Utilities
Live Poll
Do you expect your electric bills to rise in the next year?
PSEG Power and Constellation Energy plan a 200-MW uprate at the Salem nuclear plant, of which PSEG Power would hold a 112-MW share. The company reported third-quarter income of $376 million, or 76 cents per share, down from $622 million, or $1.25 per share, a year earlier, as its nuclear fleet ran at higher capacity.
Why it matters
Utility-owned generation sits at the center of New Jersey's push to limit electric cost increases while large data center loads grow. Mark-to-market losses at PSEG Power drove much of the earnings decline, a reminder that generation earnings can swing sharply even when operations improve.
PSEG's nuclear fleet of 3,760 MW ran at a 95.5% capacity factor in the third quarter, up from 92.4% a year earlier, while quarterly income fell to $376 million from $622 million. The Salem plant's current installed capacity is 2,280 MW, and the planned uprate adds 200 MW.
The players
PSEG Power
The generation arm of Public Service Enterprise Group, operating a nuclear fleet of 3,760 MW and competing in wholesale power markets.
Constellation Energy
A large U.S. nuclear generator and retail energy supplier that would own the remainder of the Salem uprate.
PSE&G
New Jersey's regulated electric and gas distribution utility, which recovers infrastructure investment costs through rates set with state regulators.
New Jersey Board of Public Utilities
The state agency that approves utility rates and cost recovery plans for New Jersey ratepayers.
The details
Constellation Energy would own the remainder of the 200-MW Salem uprate, while PSEG Power holds 112 MW. During an October refueling outage at Salem 1, a visual inspection found the thermal shield inside the reactor vessel degraded, and PSEG has started further testing that is still ongoing. PSE&G is also working with the New Jersey governor's administration and state utility regulators to limit electric cost increases, and plans to ask the Board of Public Utilities to approve recovery of investments made since its last distribution rate case.
Timeline
Third quarter 2026: nuclear fleet capacity factor reached 95.5% and quarterly results were reported.
October 2026: visual inspection revealed degraded thermal shield at Salem 1.
November 2, 2026: PSEG filed its quarterly report with the SEC disclosing the Salem 1 issue.
End of 2026: PSE&G expects to file its distribution cost recovery proposal with the Board of Public Utilities.
Market Landscape
FERC's rejection of key portions of the PJM Interconnection plan for connecting data centers and other large loads leaves generators working out contract terms without a settled framework. PSEG Power's continued talks with data center developers on nuclear power contracts show the market moving ahead of that regulatory clarity.
Businesses with large electric loads in New Jersey should watch for the distribution cost recovery filing, which could shape rates they pay for delivery. Operators who rely on nuclear-backed supply should track whether the Salem 1 outage extension affects availability and pricing.
The takeaway
Track PSE&G's distribution cost recovery filing with the Board of Public Utilities when it is submitted, since it will set how investment costs flow into your electric bills. Watch for updates on the Salem 1 inspection and repair timeline, which will indicate whether nuclear supply reliability changes.
What happens next
PSE&G expects to file its distribution cost recovery proposal with the New Jersey Board of Public Utilities by the end of 2026.
Further reading
For related coverage of the grid and rate issues behind this story, see Utilities in our New Jersey business reporting.
Source note: This article includes information reported by Utility Dive.
Live Poll
Do you expect your electric bills to rise in the next year?
