As we head into December, weather forecasts are turning colder — and wholesale natural gas and electric markets are reacting quickly.

What follows are the key drivers of wholesale natural gas and electric prices.  Remember, while power prices have their own supply and demand issues helping drive up electric bills, rising natural gas prices helps push up power prices too.  Natural gas is the fuel source for nearly 50% of U.S. power generation. 

1. Natural Gas Prices Are Poised to Jump if December Turns Colder

Natural gas has already pushed 25% higher in the past month. The market is on edge because:

•  Colder forecasts = instant price reaction. Traders push winter gas up the moment the 10–14 day forecast turns colder.

• Natural as exports (LNG) keep rising. More U.S. natural gas is heading overseas, tightening domestic supply and pushing up domestic prices.
• Production/storage is “just-in-time.” A longer cold snap can drain storage quickly and trigger sharp price spikes.  Based on current forecasts by the end of December the current natural gas storage surplus in the U.S. will likely be gone.

Bottom line:

If early December stays cold, natural gas could surge again — impacting not only winter bills, but also 2026 forward prices.  The worst case scenario for natural gas prices would be for cold weather to continue for long stretches of time in January and February, U.S. storage falls below normal levels and natural gas exports to Europe and Asia continue at levels that are already nearly 50% higher than a year ago. 

2. Higher Natural Gas Pries = Higher Power Prices in PJM

As mentioned earlier electricity in Ohio is heavily tied to natural gas prices. When natural gas prices spike:

• Power generation costs rise, especially on the coldest mornings and evenings.
• Day-ahead and real-time prices climb fast.

This winter, PJM is also dealing with:

• Fast-rising power demand from data centers
• Slower power-plant additions + power plant retirements (see chart above)
• Higher PJM Capacity prices already locked in for June 2025 – May 2028.  PJM  has provided price signals that the PJM Capacity cost beginning June 2028 will be even higher. Since May 2024, PJM capacity costs have risen more than 1100%  based on the June 2026 PJM known capacity cost.

Long story short, we could easily be at the precipice of higher or even surging natural gas and electric costs.  Each consumer needs to use every tool in the tool box available to them to minimize the impact of higher wholesale energy prices.  Assuming you’re ok or being complacent will be costly.  Buying electric and natural gas strategically is imperative.  It’s times like this that we feel that RD Energy shines brightest.  If you have questions, concerns, fears, then contact us and let’s look for the best solution!