Tackling PJM Capacity Price Hikes with Energy Demand Management

3 min read

Let’s talk about something that’s making waves in the energy sector: demand management. Specifically, how it can help businesses navigate the rising capacity prices in PJM. Whether you’re a business owner or an operations manager, you’ll want to pay attention to this.

What is Demand Management?

Demand management is a strategy where businesses adjust their energy consumption in response to price signals from the grid. This can mean reducing usage during peak times or shifting it to off-peak periods. The goal is to shift your peak load to reduce costs, which also helps to balance supply and demand, ensuring grid stability and avoiding blackouts.

Why is it Important?

With PJM’s capacity prices hitting record highs for the 2025/2026 delivery year, businesses are facing higher electricity costs. Demand management gives companies opportunities to drive energy savings while helping to maintain reliable electricity across the region. By participating in demand management programs, your organization can reduce future capacity costs or gain incremental revenue.

How can businesses reduce capacity costs?

Although the energy market may be out of your control, you do have control over how you manage your energy costs. AEP Energy and our partners can consult with your business to provide a variety of Demand management solutions, including:

• Demand Response Programs – Your organization may qualify for Demand Response programs, which allow you to get paid for curtailing your load during peak demand periods.
• PeakAdvisory® – AEP Energy offers a complimentary service that notifies you before high peak times, allowing you to decide if reducing your usage during these periods are beneficial for your business
• Onsite Distributed Energy Resources – By installing generation or storage systems onsite behind your meter, such as solar panels, fuel cells, battery storage, or a reciprocating engine generator, you can reduce the amount of power drawn from the grid during peak demand periods, therefore lowering your demand charges and your overall energy costs.

The Bottom Line

This summer the large increase in the market price of capacity is unavoidable, but you can minimize the impact of that price increase by working with AEP Energy’s trusted experts to analyze your usage and patterns and identify the right demand management program for your organization. We are ready to work with your business to not only save money, but also contribute to a more reliable and sustainable energy grid. To Learn More: C&I Request a Consultation | AEP Energy

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