The U.S. doesn’t run one single energy market. Instead, each region has its own rules, costs, and risks. If your business operates in more than one state, you’ll need to know the differences — what works in Texas won’t work in New York.
Texas (ERCOT)
- Fully deregulated in most of the state. You choose your supplier.
- Low average prices, thanks to lots of wind and solar.
- Very high spikes during emergencies — bills can jump overnight.
- No capacity charges, so bills are simpler.
👉 Best strategy: Lock in part of your usage and use caps or demand response to protect against rare but extreme events.
PJM (Mid-Atlantic & Midwest)
- Covers 13 states from New Jersey to Illinois.
- Capacity charges matter — they can be 20–30% of your bill.
- Prices are generally moderate but swing with weather and gas costs.
👉 Best strategy: Manage your peak demand hours to cut capacity costs, and check if your contract passes them through.
New York (NYISO)
- Capacity costs (ICAP tags) are especially high in New York City.
- Winter risk: gas shortages can send prices soaring.
- Bills are more expensive than most regions.
👉 Best strategy: Many businesses go fixed to avoid winter spikes. If large enough, watch “peak alerts” and cut usage to lower next year’s capacity charges.
New England (ISO-NE)
- Among the highest power costs in the U.S.
- Heavy dependence on natural gas; winter shortages = huge price swings.
- Transmission costs are also high.
👉 Best strategy: Fixed contracts for winter, plus energy efficiency or on-site solar/batteries to reduce how much you buy from the grid.
MISO (Midcontinent ISO)
- Mixed deregulation (Illinois and Michigan have choice, others don’t).
- Costs are usually lower than East Coast markets.
- Still, capacity charges and local constraints can add up.
👉 Best strategy: Know which utility/market zone you’re actually in (parts of Illinois are PJM, others are MISO).
California (CAISO)
- Partially deregulated: only some businesses can choose suppliers.
- Prices swing daily: cheap midday (lots of solar), expensive evenings.
- Carbon costs are included in prices.
👉 Best strategy: Shift usage into lower-cost daytime hours and look at renewable or community solar options.
Key Takeaways
- Texas & California: Watch for price spikes.
- PJM, New York, New England: Capacity charges can dominate your bill.
- Midwest: Lower costs but know your utility zone.
👉 Bottom line: Every region has its quirks. Don’t assume one strategy works everywhere. Match your contract and risk plan to the local market.
Next: Working with Energy Brokers – how experts can help you navigate these differences →