2025 Energy Alert: PJM Market Prices Hit Record Highs
September 23, 2025
Electric Advisors, Inc. wants to help businesses understand rising utility costs
Who is PJM?
PJM, or Pennsylvania New Jersey Maryland Interconnection, is one of seven regional transmission organizations (RTOs) in the U.S. It manages the wholesale electricity market across 13 states and Washington, D.C., helping to keep power reliable and competitively priced across a large region.
Navigating Rising Capacity Costs in PJM
If you're a commercial electricity customer in the PJM region, here’s what’s new this month and why a long-term supply agreement has never been more important.
What’s Changed? Capacity Prices Spike Again
- In the latest auction, capacity prices for the 2026–2027 delivery year reached $329.17 per megawatt-day (MW-day)—the maximum allowed by federal regulators, a 22% increase over last year’s record high of $269.92/MW-day.
- PJM expects this spike to result in 1–5% higher bills for many ratepayers beginning June 2026, though impacts vary by state and cost recovery methods.
- Total capacity costs jumped from $14.7 billion in the prior year to $16.1 billion—an increase of more than $1 billion.
What’s Driving the Increase?
Energy-hungry data centers—especially those tied to AI and Big Tech—now account for over 90% of PJM’s rising power demand. By 2030, system demand is expected to grow by 32 GW, with 30 GW linked directly to data center expansion.
On the supply side, PJM remains heavily reliant on natural gas, coal, and nuclear, which together provide nearly 90% of generation. Renewables, including hydro, wind, and solar, make up just 8%. Adding to the challenge, PJM’s interconnection queue is clogged, particularly for clean energy projects. To address this, PJM has partnered with Google to use AI to accelerate approvals, with the goal of cutting timelines from more than 40 months down to just one to two years by 2026.
What It Means for Your Business
- Rising Costs Are Here: Many businesses are already facing a 1–5% cost increase in their electricity bills starting June 2026.
- Broader Impacts to Come: Analysts warn residential rates could climb 30%–60% by 2030 if demand keeps rising while new infrastructure lags.
The Smart Strategy: Lock in Long-Term Supply Agreements
Now is the ideal time to consider a long-term third-party energy supply contract. Here’s why it matters:
- Protect Your Budget: Locking in rates shields your business from volatile capacity price jumps.
- Plan with Confidence: Predictable energy pricing supports better budgeting and forecasting.
- Green and Flexible Options: Many contracts offer renewable energy choices or demand response options to reduce peak use and lower costs.
- Ride the Wave of Reform: With PJM investing in AI-powered interconnection and states negotiating reforms (e.g., PA’s new auction cap to avoid explosive cost spikes), now’s the time to benefit from market improvements.
Call to Action
At Electric Advisors, Inc., we help businesses navigate the rising costs in PJM’s electricity market. With demand growing rapidly and capacity prices climbing, it’s important to explore options that provide stability and cost control. A well-structured supply strategy can protect your budget and bring confidence in an uncertain market. Contact us to learn more about how we can support your energy planning.
For most business owners, the monthly utility bill is just another line item to be paid and filed away. You glance at the total, ensure it isn't astronomically higher than last month, and move on. But in 2026, with energy markets facing unprecedented volatility and complex new tariff structures, that "glance and pay" strategy is costing American businesses billions in overpayments. The good news? You don’t have to just accept these costs as the price of doing business. Everyone is talking about utility bill audits because they have transitioned from a "nice-to-have" occasional check to a critical financial strategy. At Electric Advisors, Inc., we’ve seen firsthand how a meticulous review of historical invoices can uncover significant refunds and permanent rate reductions.
In the world of commercial operations, finding a way to slash overhead by double digits without spending a dime upfront is usually a red flag for a "too good to be true" offer. But in 2026, for businesses operating within the BGE, Pepco, Potomac Edison, and Delmarva utility territories across Maryland and Delaware, this isn't a sales pitch, it’s a regulatory reality. Community solar has evolved from a niche pilot program into a mainstream financial strategy for savvy business owners. If your business pays its own utility bills but doesn't have the roof space, the capital, or the long-term lease to install traditional solar panels, community solar is your bridge to immediate savings. The good news? You can typically reduce your monthly electricity spend by 8% to 12% simply by enrolling. Here is how your business can capture this "easy win." Key Takeaways Zero Upfront Costs: No installation, no equipment maintenance, and no capital expenditure. Guaranteed Savings: Most subscriptions offer a fixed percentage discount (typically 8–12%) on the solar credits applied to your bill. Tenant-Friendly: Perfect for businesses that rent their office, warehouse, or retail space. Market Reach: Available to businesses in BGE, Pepco, Potomac Edison, and Delmarva (MD & DE) territories. Risk Mitigation: Electric Advisors handles the vetting to ensure you choose a project with favorable terms and no hidden cancellation fees.
For most business owners in Washington, D.C. and Maryland, June 1st marks the unofficial start of summer: the return of rooftop happy hours, tourists swarming the National Mall, and the inevitable cranking of the HVAC system. But in the world of energy management, June 1st is something much more significant. It is the "Energy New Year." If you manage a commercial property, a non-profit, or a restaurant, this date represents the reset button for how your utility costs are calculated for the next twelve months. While many decision-makers focus solely on the "supply rate" on their bill, there is a hidden mechanism called the Peak Load Contribution (PLC) that could be quietly inflating your costs by thousands of dollars The good news? You aren’t powerless. By understanding how the grid works and taking a few strategic steps this spring, you can "beat the surge" and secure better financial predictability for your organization. The June 1st Milestone: Why It’s the "Energy New Year" In the Mid-Atlantic region: specifically within the territories served by utilities like Pepco and BGE: we operate under the PJM Interconnection . PJM is the regional transmission organization that coordinates the movement of wholesale electricity across 13 states and D.C. Every year on June 1st, PJM begins a new "delivery year." This is the date when the "Capacity Tags" (or PLC) assigned to every commercial building are updated based on the previous summer’s usage. Why does this matter to you? Because the capacity charge often makes up 25% to 40% of a commercial electricity bill. If your building was inefficient during the hottest days of last summer, you are about to pay the price for it starting this June. Conversely, what you do this summer will dictate your fixed costs for June 2027 through May 2028. The Hidden Problem: Understanding Capacity Charges and Your PLC Most business owners look at their bill and see "Kilowatt-hours (kWh)": that’s how much energy you used. But the Capacity Charge is based on your "Peak Load Contribution." Think of it like a "reservation fee" for the grid. PJM needs to ensure there is enough power available if every single building turned on every single light and AC unit at the exact same moment. To fund this readiness, they charge businesses based on their highest usage during the grid's "Five Peak Hours" of the previous summer. The Problem: If your restaurant, condo building, or school had a massive spike in usage on a Tuesday afternoon in July when the grid was stressed, your PLC (or Capacity Tag) will be high. You will then be billed at that "peak" rate every single month for the following year, regardless of how little energy you use in the winter. For many commercial clients, this is a "ghost charge" that feels impossible to control. But with the right services , it becomes a manageable variable.