How NJ Businesses Are Fighting The 833% Peak Capacity Rate Spike Of 2025

The weather isn't the only thing breaking records in New Jersey this summer.

Commercial electricity bills are climbing fast, driven by an unprecedented 833% surge in PJM capacity rates—jumping from $29 to $270 per megawatt-day. For many businesses, energy costs have become their biggest operational concern.

This isn't a blip either. Capacity rate hikes took effect in June 2025, fueled by a perfect storm of retiring power generators, rising demand from data centers, electrification efforts, and project delays in bringing new generation online. With wholesale electricity costs projected to increase by up to 29%, commercial and industrial operations across the state are feeling the pressure.

The Real Impact on Business Budgets

Depending on usage patterns and contract terms, companies are facing bill increases ranging anywhere from 6% to 45%. For businesses operating on thin margins or high usage, that kind of jump is enough to disrupt everything from pricing strategies to long-term growth plans.

Yet while many are bracing for impact, others are already acting—by changing how they buy and use energy.

How Businesses Are Fighting Back

To reduce exposure to peak demand pricing and capacity charges, energy experts recommend a few core strategies:

• Use On-Site Energy Storage: Storing electricity when it's cheaper and using it when prices spike helps flatten peak loads.
• Implement Energy Efficiency Upgrades: Modernizing HVAC systems, lighting, and equipment cuts total consumption and peak usage alike.
• Install On-Site Generation: Solar panels or other distributed generation options offset demand from the grid—particularly during costly peaks.
• Shift to Off-Peak Operations: Capacity charges are tied to usage during peak demand, so rescheduling energy-heavy tasks to off-hours can directly lower costs.
• Adopt Real-Time Monitoring Tools: Smart meters and automated controls allow businesses to make immediate adjustments to consumption during high-cost windows.
• Enroll in Demand Response Programs: PJM pays businesses to reduce electricity use during high-demand periods. This not only supports grid reliability but also reduces capacity costs.
• Plan for Extreme Weather Events: With hotter-than-usual forecasts and record demand expected, businesses should have contingency strategies in place to keep operations running efficiently during PJM system alerts.

According to industry consultants like Mike O'Reilly of The Energy Consultant NJ, preparation is everything. "Rather than reacting to utility bill spikes, businesses need access to actionable intelligence," he explains. "The goal is to move from reactive to strategic energy management."

Why Deregulated Markets Offer an Advantage

New Jersey's deregulated energy market gives businesses access to a competitive supplier landscape. Unlike regulated markets where rates are fixed, businesses here can compare and switch to plans that offer more favorable pricing or risk-mitigation features—especially valuable in volatile times.

Businesses can take advantage of specialized tools that can help them analyze their bills, compare supplier offers, and optimize contract terms. These systems provide insights that many companies might otherwise miss, including hidden fees, timing mismatches, or missed opportunities to lock in rates.

Taking the Next Step

Managing energy in 2025 isn't just about turning off lights after hours—it's about using data, timing, and strategy.

For companies looking to take control of their energy costs, working with experienced consultants can unlock savings that go beyond the obvious. If you're looking at higher bills and uncertain rate structures, exploring the cost management tools currently available may be the edge your operation needs.