Maryland Commercial Electricity: PJM Capacity Cost Spikes
Maryland commercial facilities face extreme electricity inflation in 2026 caused by an 800% spike in PJM Capacity Auction clearing prices. To survive the margin destruction passed through BGE and Pepco delivery zones, property managers must isolate their capacity costs in retail contracts and execute aggressive PLC (Peak Load Contribution) shaving during summer grid alerts.
Executive Impact
- →The 800% Capacity Pass-Through: The PJM Base Residual Auction experienced unprecedented clearing prices due to retiring thermal generation and massive D.C.-area data center load. In Maryland's deregulated market, this capacity cost is a fundamental component of electricity pricing. Whether a business buys from the utility or a competitive third party, this multi-million dollar structural inflation is passed directly to the meter.
- →Rising BGE/Pepco Delivery Tariffs: Independent of the wholesale capacity crisis, Maryland's physical utilities (like BGE) are aggressively pursuing rate cases before the Public Service Commission (PSC). They require billions in capital to execute the multi-year grid modernization required to meet the state's aggressive Climate Solutions Now Act (100% clean energy by 2035 and sweeping building electrification).
- →Contract Vulnerability: Many commercial property managers holding legacy "Fixed All-Inclusive" contracts will discover they are unprotected. Most retail suppliers invoke "Change in Law" or "Regulatory Event" contract clauses to legally dump PJM capacity auction spikes straight onto the customer's monthly invoice, bypassing the fixed rate.
Mastering PLC Peak Shaving
In the face of 800% higher capacity clearing prices, the absolute most critical action a Maryland commercial facility can take is managing its Peak Load Contribution (PLC) tag.
- The Mechanics of PLC: PJM determines your share of the capacity burden by looking strictly at your consumption during the five synchronous hottest hours of the grid's previous summer. If you use 1,000 kW uniformly throughout the year, but spike to 1,500 kW when it's 100°F in August, you pay capacity charges for the entire next year based on that 1,500 kW anomaly.
- Coincident Peak Avoidance: Facilities must integrate predictive grid alerts with their Building Management Systems (BMS). When PJM nears a coincident peak hour, the facility must proactively pre-cool, then dramatically curtail chiller and heavy equipment usage. Physically dropping that peak consumption strips massive, permanent cost off the subsequent 12-month billing cycle.
- Pass-Through Contract Structures: To monetize PLC shaving, a business must utilize a "Pass-Through Capacity" retail energy contract. If you sign a fully fixed contract, the retail supplier legally pockets the massive savings generated by your facility's peak-shaving efforts.
Maryland's Data Center Footprint
While Northern Virginia (Loudoun County) is the traditional hyperscale epicenter, massive data center development is spilling over the border into Frederick and Montgomery counties in Maryland. This hyper-dense, 24/7 load growth is exacerbating local BGE/Potomac Edison transmission congestion, adding Locational Marginal Pricing (LMP) premiums to the already inflated capacity environment.