PJM Transmission Rates Are Rising—Here’s What It Means for Your Business

If you’re a business operating in the Mid-Atlantic or Midwest, expect your electricity bills to rise—potentially by 29%—starting in mid-2025.

PJM Interconnection, the regional transmission organization (RTO) that governs your power supply, has announced a dramatic increase in transmission rates. These changes are already beginning to impact energy bills across 13 states and D.C., especially for companies that haven’t updated their supply contracts or improved their energy efficiency.

At Lightility, we help businesses understand what PJM Interconnection rate hikes mean for them—reviewing supply contracts, auditing energy usage, and implementing cost-saving strategies to stay ahead of the curve.

What is PJM Interconnection?

Business owners in the Mid-Atlantic or Midwest will have their electricity bill directly affected by PJM. PJM Interconnection is one of the largest RTOs in the U.S., responsible for managing the high-voltage electric grid across a large portion of the Mid-Atlantic and Midwest. It coordinates the flow of electricity and sets pricing through capacity auctions that influence how much you pay for power.

When PJM costs go up, your energy rates follow—often substantially.

Why Are Energy Rates Increasing?

PJM has announced that transmission rates are set to rise significantly in June, leading to an immediate increase in energy prices for businesses. Specifically, the latest PJM capacity auction for 2025–2026 revealed an 833% increase in capacity prices, surging from approximately $29 per megawatt-day to $270 per megawatt-day.

While 833% may sound abstract, here’s what it really means for businesses: your electricity bill could go up by an estimated 29% — and that’s before considering any additional market volatility or usage changes. If you haven’t reviewed or renegotiated your supply contract recently, now is the time.

At Lightility, we help clients not only assess their current contract terms but also identify efficiency measures that reduce energy consumption and prepare for cost increases. From auditing energy use to planning efficiency upgrades, we provide actionable strategies to reduce your exposure to rising rates.

Several factors are driving this unprecedented spike:

Retirement of Power Plants

One of the key drivers behind rising energy rates is the retirement of aging coal-fired power plants across the PJM Interconnection region. These facilities are being shut down due to stricter environmental regulations, outdated infrastructure, and high maintenance costs—cutting into the overall electricity supply.

While nuclear power remains a stable part of the mix, it cannot fully replace the baseload capacity coal once provided. As a result, the system leans more heavily on natural gas and renewables, both of which are more sensitive to price and weather conditions.

For your business, this means increased rate volatility and a shrinking margin of energy reliability.

Increased Energy Demand

The demand for electricity has surged in recent years due to multiple factors. The rapid expansion of data centers, the electrification of transportation, and increasing energy needs in industrial manufacturing have all contributed to greater consumption. In particular, AI-driven computing and cloud services have led to skyrocketing energy usage by tech companies. Additionally, as more consumers and businesses transition to electric vehicles (EVs), the grid faces a higher load than ever before, driving energy rates even higher.

Grid Infrastructure Investments

The electric grid across the PJM Interconnection region is aging—and keeping it reliable comes at a cost. PJM is investing heavily in upgrading transmission infrastructure and reducing congestion, and those costs are being passed along to businesses.

On top of that, integrating more renewable energy like wind and solar requires even more grid enhancements. That means higher utility rates for the foreseeable future. Understanding these infrastructure changes can help you plan ahead, budget smarter, and explore energy-saving solutions now.

Market Volatility

Fluctuations in fuel prices, supply chain disruptions, and weather-dependent energy sources contribute to price instability. Natural gas prices, for example, have been highly volatile due to geopolitical tensions, increased global demand, and domestic supply fluctuations. Meanwhile, the growing reliance on renewable energy—which can be affected by inconsistent sunlight and wind conditions—adds unpredictability to the market. Without adequate storage solutions, the reliance on intermittent energy sources can lead to unexpected price spikes during peak demand periods.

These factors create an environment where businesses must be proactive in managing their energy usage to control costs effectively.

How This Impacts Your Business

Higher Monthly Energy Bills

The increased transmission costs will be reflected in monthly utility bills, particularly for businesses with high energy consumption, such as manufacturing plants, office buildings, and data centers.

Sustainability Efforts Becoming More Expensive

Businesses striving to adopt sustainable practices, such as using renewable energy or implementing energy efficiency upgrades, may find themselves paying higher-than-expected costs if they are on the wrong rate program. Incorrect rate structures can lead to penalty charges or missed cost-saving opportunities.

Increased Operating Costs for Property Owners

For apartment buildings and commercial real estate, higher transmission rates translate to higher operational expenses, potentially leading to increased rent or maintenance fees for tenants. New property acquisitions should be analyzed carefully to assess potential energy rate costs before purchase.

Supply Chain and Service Industry Costs Rising

Warehouses, distribution centers, and service industries will experience increased energy rates, leading to higher product prices for consumers and reduced profit margins for businesses.

These changes are not just theoretical—they’re already starting to show up in energy bills. Businesses that haven’t reviewed their electricity supply contracts recently could be hit the hardest.

Now is the time to talk to Lightility about renegotiating those contracts and implementing cost-saving strategies.

How Businesses Can Reduce Energy Costs Despite Rising Rates

Compliance with Building Energy Performance Standards (BEPS)

Both Washington, D.C., and Maryland are implementing Building Energy Performance Standards (BEPS) to enhance energy efficiency in large buildings. These regulations set specific energy efficiency requirements that commercial properties must meet to reduce overall energy consumption. Non-compliance with these standards can result in substantial financial penalties, increasing operational costs for businesses that fail to adapt. Given these developments, it’s crucial for businesses to proactively manage their energy consumption and ensure compliance with regional energy standards to mitigate rising costs and avoid penalties.

Conducting a Professional Energy Audit

A professional energy audit helps identify inefficiencies in a building’s energy consumption, uncovering opportunities for cost savings. Outdated or inefficient lighting and HVAC systems, excessive peak demand charges, and underutilized rebate programs are common areas for improvement.

Upgrading to Energy-Efficient Lighting and Systems

LED lighting upgrades and power monitoring systems can significantly reduce energy consumption and offset rising transmission costs. Apartment buildings undergoing acquisitions should prioritize energy-efficient upgrades to keep operational costs low.

Selecting the Right Rate Program

Many businesses are paying more for energy rates than necessary because they are on the wrong rate program. By analyzing energy usage patterns, businesses can adjust their rate structures to avoid penalties and optimize energy expenses.

Investing in On-Site Renewable Energy

One way to offset rising PJM Interconnection transmission rates is to install solar panels or battery storage systems. By generating and storing energy on-site, businesses can cut costs and increase sustainability.

Partnering with an Energy Solutions Expert

Navigating PJM Interconnection rate structures, demand charges, and energy efficiency programs can be complex. Working with experts like Lightility allows businesses to make informed decisions that maximize savings and efficiency.

The Future of Energy Costs in PJM Interconnection

With energy rates expected to remain high, businesses must take a proactive approach to managing energy expenses. This includes staying informed on PJM Interconnection market updates, investing in long-term energy efficiency solutions, exploring alternative energy sources, and continuously monitoring energy consumption for cost-saving opportunities.

Secure Your Business Against Rising Energy Costs

Rising energy rates across the PJM Interconnection region are already affecting business budgets. If you haven’t reviewed your energy strategy, now’s the time to act.

Lightility helps businesses take control—through energy audits, contract evaluations, and custom efficiency plans. We identify where you’re overspending, uncover opportunities to cut usage, and make sure you’re aligned with new energy standards.

Let’s build a strategy that reduces your energy expenses and positions your business for long-term savings. Reach out to Lightility to get started.