Volatility Continues – Strategic Planning is Critical 
As we head into the final stretch of summer, July 2025 has made its mark as one of the hottest months in PJM history. Record-breaking temperatures fueled a new summer peak demand across the PJM grid—surpassing 2024’s peak by over 5%—with AI data center growth being the single largest driver of this surge. And the trend isn’t slowing down.
So far this summer, PJM has issued two Critical Demand Response Events—one in June and another in July—underscoring the grid’s growing stress and the value of participating in Demand Response programs. These events offer not only reliability benefits but also a critical revenue stream for smart participants.
Natural Gas Fundamentals – Calm Before the Storm?
Despite today’s relatively weak natural gas fundamentals, market signals are flashing caution for the fall and winter ahead. Natural gas prices remain subdued for now due to strong production and healthy storage, but don’t let that lull you into complacency:
- LNG exports are expected to rise substantially this fall, tightening domestic supply. Plus, LNG additional growth is forecast for 2026.
- A potential El Niño winter is forming, increasing the likelihood of stronger heating demand. Polar Vortex events are common with an El Nino.
- Supply/demand imbalances—especially when viewed through a 1–3 year lens—are signaling a reversal in price trends.
The consensus among analysts? Expect higher natural gas and power prices later in 2025 and into 2026.
New Power Generation: Not Keeping Pace
While electricity demand, led by AI and manufacturing, continues to accelerate, new generation long-term projections are only tracking at about 50% of demand growth. This widening gap is not just a near-term concern—it’s a long-term market driver for elevated prices and potential reliability challenges. Aging power generation plants have a hard time sprinting day after day to meet growing demand.
Capacity Costs Continue Climbing
Incase you missed it, PJM capacity rates took a massive leap in June 2025—up 833%compared to June 2024. And it doesn’t stop there. The latest PJM auction revealed another 22% increase coming in June 2026. For customers with pass-through or adjustable capacity rates, this represents real, bottom-line impacts unless steps are taken to mitigate them.
What Should You Be Doing Now?
Fortunately a number of RD Energy clients are already participating in Peak Load Management and Demand Response. If your business hasn’t reviewed how these programs work or if you qualify to participate let’s discuss it to be sure.
At RD Energy, we’re here to help you stay ahead—not just stay current. Always feel free to call or emails us with your questions.