Power Markets Hold Steady While Policy and Data Centers Rewrite the Playbook
While natural gas headlines have been dominated by the prompt month's slide, the more consequential stories this week are happening in power markets and state policy — places where decisions made now will shape commercial energy costs for years. Forward power prices are quiet, but regulators, governors, and grid operators are all moving at once. Here is what buyers should take from it.
The Economy: Still Expanding, Losing Steam
The macroeconomic backdrop remains expansionary but is cooling at the edges. The October S&P business activity index eased to 57.6 from 58.4 in September — still well above the 50 threshold that marks growth, with new orders strong, but companies reporting rising selling prices and supply-chain bottlenecks. Weekly initial unemployment claims fell to 194,000, near their lowest levels in decades, yet September payroll growth was only 29,000. AI investment continues to be the engine of near- and mid-term growth.
This week is packed with data that will move rate expectations: consumer confidence, durable goods, and new home sales figures arrive today, the Federal Reserve meets tomorrow on interest rates, and third-quarter GDP and PCE inflation numbers land Thursday, October 29. For energy buyers, the rate path matters because it shapes industrial activity, construction, and the cost of capital for every efficiency and generation project on the table.
Mid-Atlantic: Flat Forwards, Live RGGI Debate
Mid-Atlantic forward power prices were unchanged over the past week, extending a holding pattern that has lasted more than a month — typical for this point in the season. The calendar strips for 2027–2031 were flat on average, with the 2027 term down 2% and the 2029–2031 terms up 1%. October's month-to-date day-ahead settlement price in West Hub is $70.14/MWh, about 3% above September's final average of $67.85/MWh.
The real action is regulatory. After Regional Greenhouse Gas Initiative (RGGI) auction prices exceeded $7 in two consecutive auctions — the trigger under New Jersey's Global Warming Solutions Fund Act — the state's Board of Public Utilities and Department of Environmental Protection held a joint hearing on October 15 to consider ratepayer relief. The agencies reaffirmed support for RGGI while pointing to the 2026–2028 Strategic Funding Plan, which directs auction proceeds toward direct bill assistance and investments meant to lower costs over time. Public testimony overwhelmingly backed continued participation, while generators and business groups argued that high allowance prices disadvantage New Jersey plants against competitors in non-RGGI states and shift generation — and emissions — across state lines. Several commenters pushed a border adjustment as a fix that would address leakage without weakening the program. How New Jersey resolves this will feed directly into Garden State power prices.
Great Lakes: Slightly Higher Forwards, and a 10 GW Data Center
Great Lakes forward power prices moved slightly higher over the past week, up 1% on average across the 2027–2031 strips, with the 2027 term down 1% and the 2029–2031 terms each up 2%. October day-ahead averages tell a mixed regional story: COMED at $54.32/MWh (14% above September), AdHub at $65.61/MWh (4% higher), Michigan at $56.99/MWh (0.5% lower), and Ameren at $51.05/MWh (14% lower).
The structural story is PJM's filing of an integrated study agreement in Ohio for SoftBank's Flagship data center project: roughly 10 GW of new data center load paired with about 10.2 GW of gas-fired generation, connected through 765-kV transmission lines to be built by AEP Ohio. The agreement creates an expedited, integrated study process — evaluating the project's generation and load together, outside the normal interconnection queue, while still adhering to NERC reliability standards and protecting other PJM members from bearing the study costs. It is the clearest example yet of how large-load growth is forcing grid operators to invent new processes, and it signals that data center demand is now a first-order driver of power market planning across the PJM footprint.
Northeast: Massachusetts Acts on Winter Bills, New York Eyes Deliverability
Massachusetts took the week's boldest policy step. On October 5, Governor Healey issued Executive Order No. 659, proclaiming an energy emergency and directing immediate relief on winter energy bills in response to significant oil price increases. The order uses alternative compliance payments from the state's clean energy programs to expand Home Energy Assistance Program eligibility to middle-class households, directs $80 million in state funds to eliminate the SMART solar program charge from electric bills for at least three months, and orders a 50% reduction in ratepayer costs attributable to the Alternative Energy Portfolio Standard. Emergency regulations filed October 7 cut the APS minimum standard from 6.75% of electric sales in 2027 to 2%, stepping down to 1.5% in 2028, 1.25% in 2029, and 1% from 2030 onward — sharply reducing the renewable attributes suppliers must procure. For Massachusetts buyers, that is real, near-term bill relief paired with a structural change in compliance costs.
New York, meanwhile, has transitioned into the fall shoulder season, with lower loads easing near-term price pressure after the summer's heat. Attention is shifting to winter, when cold-weather volatility, natural gas deliverability, and generator availability can tighten conditions quickly — particularly downstate. The winter outlook leans relatively mild overall, but colder-tail risk remains: periods of atmospheric blocking can still produce short-duration cold events that create sharp regional price volatility. Oil remains a critical backup fuel for many downstate dual-fuel generators when gas is constrained, and New York Harbor No. 2 heating oil has more than doubled in price from this time last year — meaning a cold snap that shifts the marginal generation stack onto oil will be expensive.
Longer-term relief is on the horizon but not here yet. The Northeast Supply Enhancement project would add roughly 400,000 Dth/day into the downstate market with a late-2027 target, and the revived Constitution Pipeline could bring another 650,000 Dth/day of Marcellus supply into New York and the broader Northeast — though both still face environmental and regulatory hurdles. And the Champlain Hudson Power Express, the 1,250 MW line that reached commercial operation in May and can supply as much as 20% of New York City demand, demonstrated during July's heat wave that even a major new transmission resource does not eliminate reliability risk, after it experienced outages in the summer heat.
The Gulf Backdrop: Why Oil Risk Still Reaches Your Power Bill
The Persian Gulf situation remains highly unstable, and it reaches commercial energy buyers through more channels than crude alone. Speculation of renewed U.S. military action after the midterm elections is growing, the U.S. government is evacuating non-essential embassy personnel from the region, and top officials from Saudi Arabia, Pakistan, and Turkey met with Iranian leaders in Tehran on Monday to discuss de-escalation. Crude transiting the Strait of Hormuz has averaged 16.7 million barrels per day so far in October, down from pre-war levels near 19 million, while refined products, LNG, and dry bulk shipments remain severely constrained. Even for buyers who never purchase a barrel of oil, this is the risk premium behind backup fuel prices, behind the associated gas that flows from oil-directed drilling, and behind the volatility that can appear in power markets on a single headline.
The Gas Backdrop in One Paragraph
For context, the gas supply picture behind all of this is steady rather than tight: production has averaged about 110 Bcf per day so far in October, recovering from near 109 Bcf/d earlier in the month, and storage is forecast near 3.8 Tcf to start the winter — a level considered comfortable. The forward curve reflects that balance: the 2027–2031 NYMEX strips sit at $3.00, $3.63, $3.66, $3.65, and $3.61. The eastern two-thirds of the country continues to enjoy mild fall weather, with longer-range November and December outlooks leaning bearish for gas — one more reason power forwards have stayed so quiet.
PEM Perspective
The lesson of this week is that the cheapest electron or molecule is not always where the risk sits. Power forwards are flat, gas is comfortable, and yet Massachusetts just declared an energy emergency, New Jersey is redesigning how carbon costs flow to ratepayers, and PJM is rewriting its interconnection playbook for a single 10 GW project. For commercial buyers, the work that pays off now is not timing the prompt month — it is understanding how policy, large-load growth, and backup-fuel exposure flow into your specific supply contracts, and locking in terms before the winter's first cold snap turns a quiet forward market into a volatile one.
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