Why PJM Power Prices Jumped in September 2026

PJM price jump

Sep 30, 2026

By Tom Williamson, MSI Utilities

If you watch wholesale electricity prices in the PJM region, the last few weeks have been anything but a quiet start to fall. Several short-term shocks hit a market that was already tight, and the effects are showing up in both spot and forward prices. Here’s what happened, and what we’re telling our clients.

Summer heat arrived during maintenance season

Every fall, power plants and transmission lines across PJM go offline for scheduled work. Maintenance typically runs from mid-September through December, so equipment is ready for winter peaks. This year, unseasonable heat showed up right to when that work began.

Even after PJM recalled or canceled outages where it could, about 36,000 MW of generation remained offline, plus transmission outages. On September 16, PJM issued a system-wide Maximum Generation/Load Management Alert and an Energy Emergency Alert Level 1 for September 17. At the height of the squeeze, real-time prices at PJM’s Western Hub spiked past $4,300 per megawatt-hour.

The monthly numbers tell the story. September’s month-to-date day-ahead average at West Hub reached $73.08/MWh, 40% above August’s $52.31/MWh. Closer to home for our Ohio clients, AEP-Dayton Hub averaged $69.76/MWh, up 51% month-over-month.

A pipeline leak rattled natural gas markets

Natural gas sets the price of electricity in PJM most hours, so gas supply matters. On September 24, a leak at a regulator station near Milton, West Virginia forced Columbia Gas Transmission to declare force majeure on the Mountaineer XPress pipeline. The outage affected roughly 1.8 Bcf/d of Appalachian gas, and October gas futures rose 9% in a single day, their biggest one-day gain since January.

Prices have since cooled as repairs progressed. Even so, natural gas was trading near $3.11/MMBtu on September 29, up about 6% over the past month.

The bigger picture: less cushion, more volatility

These events would matter less if PJM had more spare capacity. Instead, demand is growing fast. PJM projects peak demand will grow by 32 gigawatts between 2024 and 2030, with all but 2 gigawatts of that coming from data centers. Capacity costs have climbed with it, and the most recent capacity auction again cleared at the price cap.

The result is that weather surprises, plant outages, and pipeline problems now move prices further and faster than they did a few years ago. That includes the spring and fall “shoulder” months, which used to be the calm part of the year. This year, the Department of Energy issued emergency orders for PJM after both a January cold snap and a May heat-and-maintenance squeeze, and September brought another one.

What this means for your business

The immediate pressure is easing as the weather cools and Appalachian gas supply returns. But fixed-price contracts are priced off the forward curve, not today’s spot price, and that curve sits well above recent spot levels. In early September, PJM West Hub on-peak power for calendar 2027 was trading near $83.90/MWh. The next capacity cost step, priced at the $333.44/MW-day cap, also reaches Ohio, Pennsylvania, New Jersey, and Washington DC bills on June 1, 2027.

For businesses with contracts expiring in the next 12 to 18 months, we recommend three steps:

Know your expiration date, and plan 6–12 months ahead. The most expensive outcome is usually letting a contract lapse into a supplier’s month-to-month or variable rate. Starting early lets you buy when conditions are favorable, instead of when your contract forces you to.
Don’t count on a shoulder-season discount. Spring and fall used to reliably bring lower prices. In today’s tighter PJM market, those are also peak maintenance months, and a warm spell can push prices higher. This September averaged about 40% above August. Contract prices also follow the forward curve and capacity costs, which don’t drop much with a few mild weeks.
Layer your purchases instead of timing the market. Locking in portions of your load at different points reduces the risk of committing everything at a price spike.

Your energy partner

MSI Utilities has helped commercial and industrial businesses navigate energy markets since 1995. We watch the forward curve every day so you don’t have to. If you’d like a no-cost review of your current contracts, or pricing from our network of suppliers, call us at 1-800-490-4427 or request a free energy quote at msiutilities.com.

This article is for informational purposes only and is not a forecast or financial advice. Energy markets change quickly based on weather, supply, and regulatory developments.

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