PJM Power & Gas: Eastern Prices Near 12-Month Lows While Maryland Hits All-Time Highs
PJM / Mid-Atlantic Power & Gas Market Update | October 2026
The PJM market is splitting in two directions at once, and which side of the split you sit on changes the strategy completely. In Eastern PJM — including New Jersey — forward power prices have fallen to near 12-month lows on mild weather and soft gas. In Maryland, data center demand has pushed forward pricing to all-time highs. Same grid, opposite opportunities. Here is how to read it.
Power Pricing: A Tale of Two PJMs
Calendar 2027 wholesale power prices softened across PJM hubs in October after warmer-than-average temperatures lifted September pricing, but the regional story diverges sharply from there.
In Maryland, explosive demand growth from data centers is driving strong pricing in BGE and PEPCO. Calendar 2027 has eased from its late-September peak, yet it remains in the 95th percentile of its three-year range — historically expensive by any measure.
In the east, the picture flips. Forward pricing in PPL has trended down consistently over the past month and now sits at or near its 12-month low, with Eastern Pennsylvania utilities and New Jersey moving in the same direction. ComEd in Illinois sits in between: Calendar 2027 trades near the 80th percentile of its three-year range, but remains below comparable PJM hubs.
The takeaway for buyers is that there is no single PJM strategy right now. What is cheap in New Jersey is dear in Maryland, and a procurement plan that treats PJM as one market will misprice both.
Natural Gas: Soft Near-Term, Supported Further Out
Near-term NYMEX pricing has stayed soft on warmer weather expectations, strong production, and healthy storage levels — creating attractive value along the forward curve. Calendar 2027 is trading at four-year lows despite expectations for growing LNG exports, expanding power generation demand, and increasing electricity consumption from data center development. Calendar 2028 has moderated following gains in late September and early October, while Calendar 2029 and 2030 remain relatively rangebound.
Basis markets show the same regional split as power. Chicago basis has moved lower on mild weather, softer demand, and comfortable supply. In contrast, Appalachian and Eastern PJM markets remain well supported: TETCO M3 continues to trade at a premium to both Chicago and TCO, reflecting demand growth from power generation, data centers, and a stronger PJM power market. TETCO M3 pricing for Calendar 2027 and 2028 has softened modestly from last month, while Calendar 2029 has strengthened and 2030 holds stable. TCO pricing across Ohio and Western Pennsylvania has stayed largely rangebound. Basis differentials from TCO through Chicago are trading near historical mid-range levels — an opportunity to secure transportation-related pricing at reasonable levels before market dynamics shift.
Electricity Fundamentals: Demand Is Outrunning New Supply
PJM supply fundamentals remain the market's central concern, as load growth continues to outpace new generation additions. PJM has begun accelerating new generation through its Expedited Interconnection Track, approving its first three projects totaling more than 2,100 MW of nameplate capacity: two battery storage facilities in Pennsylvania and Ohio (1,660 MW combined) and a 455 MW upgrade to an existing natural gas plant in Pennsylvania, all targeted to enter service by mid-2029. PJM plans to approve up to 10 qualifying projects annually through 2027 to support resource adequacy.
The demand outlook explains the urgency. Summer and winter peak load are forecast to grow 3.6% and 4.0% annually over the next decade, driven largely by rapid data center expansion. Following the warmest August and second-warmest September on record, cooling demand stayed elevated across the region, with power burn running well above the five-year average and electricity consumption exceeding typical seasonal levels.
The forward curve reflects this tension: the PJM curve shows meaningful backwardation, with wholesale energy prices declining from 2028 through 2032. That shape creates an opportunity to extend hedging horizons and secure lower-priced outer-year positions, reducing exposure to the uncertainty that can develop several years into the future.
Weather: Warm Now, With a Cold Tail
Forecasts call for above-normal temperatures through the remainder of October into November, a bearish influence on energy prices. The developing Super El Niño pattern increases the likelihood of a milder winter across key demand regions, although colder outcomes remain possible. If current weather trends persist, natural gas demand could remain below seasonal norms, keeping storage inventories comfortable and limiting upside pressure on both gas and power prices.
But mild does not mean safe. Even a generally warm winter can include short periods of extreme cold that significantly impact natural gas markets and operations. Winter preparedness is not a forecast call — it is a readiness discipline, and now is the time to confirm it before winter cold hits.
What This Means by Zone
Eastern PJM (Eastern PA, NJ, DE): Extremely low spot regional gas pricing and transmission constraints have caused index pricing to plummet over the past two months. The Super El Niño pattern is driving winter pricing below typical seasonal levels and pulling down the full calendar strip. With zones at or near 12-month lows, this is an attractive near-term buying opportunity — layer in coverage while the value is here.
Southern/Western PJM (Maryland): Forward pricing recently hit all-time highs. Delaying procurement in anticipation of a market decline leaves customers exposed to further increases and the risk of the market running away from them. A layered purchasing strategy with predetermined time stops reduces exposure to sustained run-ups while avoiding buying everything at peak conditions.
PJM-West / ComEd (Illinois): Forward pricing is in line with its three-year trading history and lower than most other regional hubs, supported by strong nuclear and wind generation across northern Illinois. Forward prices through 2030 trade in a close range, only slightly higher than three years ago. Hedging a percentage of load now allows for long-term risk mitigation while leaving room to add layers if the market dips.
The Backstop Auction: Still Unresolved
One overhang remains on the entire PJM market. After the 2028/29 capacity auction fell roughly 6.8 GW short of PJM's reliability requirement, PJM developed a Reliability Backstop Procurement designed to provide longer-term capacity commitments to qualifying new generation. FERC delayed the procurement until 2027, which leaves PJM's underlying capacity need unresolved in the near term. That unresolved need could continue to support forward power prices — and, if the program ultimately supports additional gas-fired generation, could add structural gas demand as well. It is a watch item for every PJM buyer heading into 2027.
PEM Perspective
This is a market that rewards zone-specific thinking. A buyer in New Jersey staring at 12-month lows and a buyer in Maryland facing all-time highs should not be running the same playbook — and neither should be running a single-transaction strategy in a market this split. The disciplined approach is layered purchasing: secure value where it exists today in Eastern PJM, use time stops to manage exposure where prices are at highs, and extend hedges into the backwardated outer years where the curve is offering a discount. Add winter preparedness on top — because the same mild forecast that makes gas cheap today is the forecast that gets forgotten the morning a cold snap arrives.
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