The October 2025 natural gas contract expired at $2.835, roughly 3 cents below the September 2025 contract settle. Over the past month, the October contract showed very little volatility, moving from an absolute high of $3.20 on September 8 to a low of $2.77 on September 23. In any other commodity market, a 13% move in a 30-day period might be considered extreme, but for natural gas, it’s a slow month. There were no bullish or bearish shocks to the market. Liquefied natural gas (LNG) export facilities all ran as expected and, as of early October, hurricanes have avoided landfall on the East Coast. 

Although NYMEX prices have increased recently, the forward curve in Fig. 1-3 shows the upcoming winter as still the cheapest winter until 2030. Next winter, November 2026 to March 2027, is the most expensive by almost 20 cents over the following winter.

As of the first half of October, U.S. natural gas storage inventories stand at 3.641 trillion cubic feet (Tcf), which is above both the 5-year average and the lofty balance from 2024. Many analysts are predicting the U.S. will enter the upcoming winter with a storage balance between 3.92 and 3.97 Tcf and a median balance of 3.95 Tcf, which is considered comfortably full.

With storage in the Northeast trending above the 5-year average, Appalachian producers have recently curtailed production by roughly 1.5 billion cubic feet (Bcf) per day to avoid a potential oversupplied situation in early November. While the curtailment in production tends to support prices in the Northeast, variability in renewable generation adds complexities when trying to determine how much gas will go into storage. As shown on Fig 1-6, renewable generation, especially solar, in the PJM region continues to grow. The amount of renewable generation directly affects the amount of gas generation needed to meet power demand, with excess gas flowing into storage.

The PJM Interconnection has had a busy month, and there are several developments worth watching for businesses exposed to wholesale electricity costs. PJM completed its first cycle of studies under the new interconnection reform process, reviewing 130 projects totaling about 17.4 gigawatts (GW) of generation. This milestone is an important step toward easing the backlog of renewable, storage, and gas projects waiting to connect to the grid. Due to the time it takes to build the new generation, it will take years before much of this supply is available. As a result, we’re still seeing strong forward prices for power over the next several years.

According to PJM’s market monitor, data center growth is the primary driver of higher capacity rates, as these facilities increase demand and tighten the supply. This highlights how technology-driven demand growth is influencing electricity prices across all sectors. One example of data center demand growth forecasting is playing out in Ohio, as the PUCO has approved a settlement to require data center operators to pay for infrastructure needs based on their requests whether the facilities are built or not. This incentivizes data center operators to accurately estimate their electricity needs. Within AEP Ohio, 36 data centers submitted a total of 13 GW of anticipated load, which will now undergo a load study by utility. This is markedly less demand than had previously been reported last July, when prior to the incentive, these demand centers were forecasting 18 GW.

Finally, political pressure on PJM is building. Governors from multiple states are demanding more say in market governance and have launched the PJM Governors’ Collaborative as a bipartisan forum to push for reforms. PJM leadership has countered that state permitting delays are also slowing new supply. Claims that states, like Pennsylvania and New Jersey, could leave PJM are highly unlikely and would take several years to complete all the steps necessary to pass legislation, get FERC approval, complete litigation, and implement. The tension between markets, policymakers, and developers will play a decisive role in determining future electricity costs, reliability, and opportunities for businesses across the PJM footprint.

September 2025 finished as the 14th hottest September nationally since 1950 based on power-weighted cooling degree days (CDDs). The warmest regions were the upper plains and parts of the Northwest, though most of the country averaged above the 30-year normal. Rankings were less significant in the eastern U.S., where an unseasonably cool start to September reduced average temperatures for the month.

Forecasts predicting an unseasonably warm October appear to be coming to fruition. Temperatures averaged as much as 10 degrees above normal in parts of the Midwest for the first 10 days of the month, with much of the interior U.S. running at least 5 degrees above normal. East Coast regions as well as northern California may be potential exceptions, but most of the country is anticipated to average several degrees above normal for the month.

The latest winter forecast, from the Climate Prediction Center, has above-average temperatures favored across the South and along the East Coast, with neutral temperatures in the Midwest and below-normal temperatures in the far Pacific Northwest. La Niña remains a factor to watch, with potentially weak La Niña conditions developing in the early part of winter before fading thereafter.