Managing Volatility and Rising Energy Costs with a Smarter Energy Strategy
07/07/2025

With rising energy costs and unpredictable market shifts, energy has become one of the most difficult budget items to manage.

For commercial and industrial businesses, energy has become a high-stakes category, one where poor timing or outdated strategies can quickly eat into margins. And in regions like PJM, those costs are already showing up.

At Pilot Energy, we help companies stop reacting and start planning. With the right strategy, insights, and support, your business can stay in control, even when the market isn’t.

What’s Fueling Energy Market Volatility?
PJM offers a clear example of how unpredictable the energy market has become. Capacity prices in the region’s latest auction jumped from about $29/MW-day to nearly $270/MW-day. That jump is now showing up on commercial utility bills, with many businesses already seeing rate increases of around 20% as of June 1.

In return, the Federal Energy Regulatory Commission (FERC) approved a temporary “price collar,” capping the next two PJM auctions at $325/MW-day and setting a floor at $175/MW-day, according to Utility Dive. While this move provides short-term price boundaries, it doesn’t solve the underlying issues driving volatility:

  • Tight supply and slow generation growth
  • Delays in renewable project interconnections
  • Rising demand from electrification and industrial expansion
  • Ongoing regulatory interventions and uncertainty

Together, these factors are reshaping energy markets, and they aren’t going away anytime soon.

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One-Time Buying Isn’t an Energy Strategy
For years, many businesses approached energy procurement with a simple strategy: lock in a low rate once a year and move on. But in 2025, that approach creates more risk than reward.

Markets move fast. Delaying a decision by just a few weeks can result in long-term cost exposure. Locking in too early, or too late, can mean committing to rates that are misaligned with market conditions.

Pilot helps businesses move away from static, once-a-year buying. Instead, we build flexible, layered strategies that:

  • Spread purchasing across multiple timeframes
  • Respond to real-time market signals
  • Align energy procurement with your load profile, risk tolerance, and financial goals

Rather than reacting to price spikes, companies focused on long-term energy cost savings are turning to a more dynamic strategy. That’s the foundation of smart energy risk management, and it’s how our clients stay protected from the worst of today’s market volatility.

PJM’s Capacity Spike Is Just the Beginning
The surge in capacity prices reflects deeper stress in the system. Delayed permitting and project backlogs are slowing the pace of new generation. At the same time, legacy plants are retiring, demand is growing, and policy interventions are adding new layers of complexity. PJM itself has acknowledged that capacity shortages, or near shortages, are likely to persist for the next several years, as outlined in recent reporting.

Meanwhile, PJM and others are pushing back against attempts to retroactively undo past auction results, warning that such actions would erode market confidence and threaten investment in future capacity. As Utility Dive notes, PJM argues that entertaining these complaints would signal to all investors that “they cannot rely on any clearing price.”

What this means for commercial and industrial businesses is clear: now is the time to revisit your energy strategy. If your energy plan only addresses current pricing, you’re already behind.

Pilot monitors the market in real time, tracks regulatory developments, and adapts client strategies to avoid exposure and capture opportunities as they arise. We don’t wait for surprises, we help you plan for them.

Energy Efficiency Still Delivers Results
Not all energy cost savings come from the supply side. Efficiency continues to be one of the most reliable and immediate ways to reduce spend, especially for high-usage businesses.

Pilot works with clients to identify efficiency improvements that reduce usage, cut demand charges, and support sustainability goals, including:

  • Upgrades to lighting, HVAC, and motor systems
  • Smart building controls and automation
  • Load shifting and demand response participation

  • On-site renewables and power factor corrections

These projects often deliver both operational and financial benefits, helping to ease the pressure on your energy procurement strategy.

What It’s Like to Work with Pilot Energy
Pilot is more than just an advisor. We act as an extension of your team, helping you navigate every part of the energy management process.

Our clients get:

  • Access to PowerUp™, our real-time market intelligence platform
  • Strategic energy procurement planning and contract management
  • Ongoing risk reviews and cost optimization guidance
  • Utility bill audits to catch billing errors and recover lost dollars

We stay engaged before, during, and after the contract. Because in this market, energy isn’t something you set and forget, it’s something you manage every day.

About Pilot Energy
Pilot Energy is a boutique energy advisory and procurement partner helping businesses manage rising energy costs with confidence and clarity. Founded in 2001, we provide independent, data-driven strategies for energy procurement, energy risk management, utility cost reduction, and long-term commercial energy savings.

We work closely with finance, operations, and sustainability teams to create custom energy roadmaps, aligning energy procurement, forecasting, and carbon reduction goals. With a blend of market expertise and digital platforms, we help you reduce volatility, improve budget predictability, and plan smarter in any market.

Facing rising energy costs? Let’s talk. Schedule a consultation with Pilot Energy today and start building a smarter energy strategy.