Energy Prices, PJM Capacity, Natural Gas, and Iran War Risk 
Energy markets remain uncertain heading into summer 2026. Rising power prices, PJM capacity costs, natural gas volatility, LNG exports, data center growth, and geopolitical tensions are increasing risk for energy buyers.
For Ohio Manufacturers, schools, municipalities, and Main Street, Ohio businesses; Know what you are paying for electric & natural gas, Know, Like & Trust your Energy Partner and have some type of procurement plan. It can be simple or complex, but energy price volatility is real, global and domestic supply/demand issues are real and having a plan is really important!
- PJM Power Price Trends
PJM prices are rising as demand grows and new generation faces delays.
Summer peak demand is projected to increase from 160,451 MW in 2027 to 183,008 MW by 2030, driven by data centers, manufacturing, electrification, and cooling demand.
Prices remain sensitive to:
- Weather,
- Natural gas spikes,
- Plant retirements,
- Transmission congestion,
- Geopolitical events.
- Natural Gas Prices
Natural gas continues to heavily influence electricity pricing.
The EIA projects Henry Hub prices around $3.50/MMBtu in 2026 and $3.18/MMBtu in 2027, though risks remain from:
- Weather,
- LNG exports,
- Supply disruptions,
- Storage concerns,
- Global instability.
Growing LNG exports are tying U.S. gas prices more closely to global markets. By the end of 2027 natural gas exports (LNG) is forecasted to grow another 7 bcf/day or another 40% above current record levels. While an El Nino 2026/2027 may mean a warmer than normal winter and low late winter and Spring natural gas prices, a 40% increase in LNG export capacity could likely mean vastly higher prices by year’s end.
- PJM Capacity Costs
PJM capacity prices have surged:
- 2024/2025: $28.92/MW-day
- 2025/2026: $269.92/MW-day
- 2026/2027: $329.17/MW-day – Up over 1000% from two years prior adding an enormous amount of monthly added costs to many electric bills
- 2027/2028: $333.44/MW-day
Customers should monitor:
- Capacity exposure,
- Peak Load Contribution tags,
- Peak Load Management,
- Demand Response opportunities,
- Contract structure.
If most or all of the before-mentioned things to monitor sound foreign to you, then please ask us about them so you know how they can hurt or possibly help your electric bills. Our goal is to help our customers lower the impact of higher PJM capacity charges and higher wholesale electric prices.
- Iran Conflict Risk
Conflict involving Iran adds uncertainty around global energy shipping routes. Even if a deal happens in the next week or two the supply chain is broken. It will likely take quite a while to get things back to normal or a new normal whatever that ends up looking like.
Potential disruptions could increase:
- Fuel costs,
- Freight costs,
- Inflation,
- Business expenses.
Geopolitical risk can also increase supplier pricing volatility. Price volatility fear means added price risk to the energy suppliers. Added price risk goes into the customer price offers.
- What RD Energy Recommends
RD Energy recommends reviewing:
- Contract end dates
- PJM capacity exposure
- Peak Load Management
- Demand Response opportunities
- Natural gas strategy
- Contract structure
Bottom Line
Energy markets remain volatile as PJM power demand rises, PJM capacity prices stay elevated at record levels, and global risks continue affecting natural gas and electricity pricing. There are so many moving parts domestically and globally that can effect natural gas and electric prices. The next 5 years will likely be unlike any we’ve experienced before as we recover from the recent global supply chain disruption, figure out how to balance power supply demand and supply driven by AI Data Center growth and react to opportunities and risks of weather extremes.
At RD Energy we try and help our customers slow the process down, communicate key energy price drivers through publications like this and one-on-one discussions, compare pricing options clearly, and help them make informed and timely decisions before the market price trends punish them for not taking more timely action. Please don’t feel hesitant to ask us questions and for our energy supply contract guidance. We closely watch electric and natural gas price trends and the domestic and global key drivers every day in order to provide timely and accurate guidance and coaching. We enjoy talking about it!