A historic 833% surge in PJM’s capacity rates is already driving up commercial electricity bills across 13 U.S. states and D.C.—and for many businesses, the financial impact could be significant. Here’s what’s behind the spike and what companies can do about it.
From June 2025, millions of businesses across the PJM Interconnection territory—from Ohio to North Carolina—began feeling the effects of the largest capacity rate increase in PJM's history. This rate, which covers the cost of maintaining grid reliability, jumped from $28.92/MW-day to $269.92/MW-day, marking an 833% spike year-over-year.
That's not just a scary number on paper. Capacity charges now account for up to 30% of a business's electric bill—and for many commercial operations, this change is driving an average 20-29% increase in total monthly costs. (Energy Toolbase, Greentech Renewables)
Some zones have been hit even harder. Baltimore Gas & Electric customers saw capacity rates spike to $466.35/MW-day, while Dominion territory hit $444.26/MW-day. For companies operating on tight margins, the impact is immediate and steep. (Greentech Renewables)
Several converging issues triggered this dramatic shift in pricing:
Together, these factors created the sharpest upward pressure the market has seen, resulting in a total PJM-wide capacity cost leap from $2.2 billion to $14.7 billion in a single year.
If your facility is in one of the 13 PJM-covered states or D.C., this isn't a temporary bump—it's a shift in baseline. Energy costs can make up anywhere from 15% to 50% of total operating expenses for commercial buildings, especially in manufacturing, warehousing, or data-heavy sectors. (Greentech Renewables)
Even companies with fixed-rate contracts aren't fully insulated, as rising capacity charges often fall outside those agreements. In short: unless you're actively managing your procurement strategy, your next few electricity bills could be a shock.
Increased energy volatility is pushing many organizations to act fast. Common mitigation strategies now include:
Energy consultants have become key players in helping businesses assess their exposure and identify cost-saving paths. One example is , an independent advisor with Mantis Innovation, which supports businesses across deregulated energy markets.
The spike may have already taken effect, but businesses still have options. Many utilities and consultants recommend locking in new procurement strategies now before future auctions or regulatory changes introduce more volatility.
As market uncertainty grows, a proactive approach to energy procurement could make the difference between surviving the rate increase and watching it erode your margins.
Need help with PJM rate changes? Consulting with can help you understand exposure, explore fixed-rate opportunities, and build a smarter energy strategy for 2025 and beyond.
