Rising Electricity Costs, Stable Gas Prices: What It Means for Energy-Intensive Facilities

By Peter Cavan | Head of Strategy, Unison Energy

Key Takeaways for Energy-Intensive Facilities

• Average U.S. commercial and industrial electricity rates increased 28% between 2020 and 2025, with several regions exceeding 40%.
• S&P Global’s Q2 2026 outlook projects Henry Hub natural gas prices remaining in a relatively narrow range through 2046.
• Combined heat and power (CHP) produces electricity onsite and captures useful heat, typically achieving total system efficiencies of 60–80%.
• For facilities with consistent electric and thermal loads, CHP microgrids can reduce grid dependence, contain costs over the long term, and support operations during outages when designed for island mode.

Average commercial and industrial electricity rates increased 28% nationwide between 2020 and 2025, with several regions experiencing increases above 40%.

After decades of essentially no load growth, US electricity demand is rising at rapid pace.. Data centers are a major driver, while new industrial loads and electrification are pushing forecasts higher. Extreme weather adds pressure by increasing peak demand and driving grid-hardening investments.

At the same time wholesale futures data compiled by S&P Global¹ tells a different story for natural gas. The expectations are Henry Hub prices falling from approximately $3.50/MMBtu in 2027 to around $3.25 in the early 2030s, then rising gradually to just over $4 by 2046. That represents an increase of only about 19% over nearly two decades. By comparison, average U.S. commercial and industrial electricity rates increased 28% in just five years between 2020 and 2025.

S&P Global’s Q2 2026 outlook keeps Henry Hub prices within a relatively narrow range through 2046. Source: S&P Global Energy. “US Power Forecast Q2’26: Natural Gas Gains Ground in the Competition for Market Share.” As of Aug. 17, 2026.

The takeaway: electricity costs are rising while the natural gas outlook remains relatively stable. That widening spread gives energy-intensive facilities reason to reassess how they source power

Why Rising Electricity Costs Matter for Large Facilities

Electricity prices reflect more than fuel. Utilities and grid operators also pay for capacity, transmission, distribution, and other infrastructure. As demand grows, expansion costs can eventually reach customers through utility rates and related charges.

PJM offers one clear example. The grid operator expects its summer peak demand to surpass 253,000 MW by 2046, nearly 97,000 MW above its 2026 forecast. That represents an increase of roughly 62% in 20 years.²

PJM’s 2026 forecast projects summer peak demand surpassing 253,000 MW by 2046. Source: PJM.

Why Stable Natural Gas Prices Strengthen the Case for Onsite Power

Natural gas prices will still move with weather, production, storage, LNG exports, and other conditions. But S&P Global’s outlook points to a relatively narrow long-term range, potentially giving large facilities greater cost visibility through onsite power.

S&P Global’s updated eastern-market forecast adds later-year solar and gas capacity while reducing long-term storage. Source: S&P Global Energy. As of June 30, 2026.

How CHP Microgrids Improve Energy Efficiency and Resilience

Combined heat and power (CHP), also called cogeneration, generates electricity onsite and captures heat for steam, hot water, heating, or cooling. By meeting both needs from one fuel input, CHP systems typically achieve total efficiencies of 60–80%, compared with approximately 50% for conventional purchased electricity and an onsite boiler.³

Integrating CHP with microgrid controls can improve resilience. When designed for island operation, a CHP microgrid can disconnect from the utility during an outage and continue serving designated loads. Unlike a standby generator, it operates every day to reduce purchased electricity, offset boiler or other thermal energy consumption, and potentially lower total energy costs.

Which Facilities Are Good Candidates for CHP Microgrids?

CHP is not the right fit for every facility. The strongest candidates typically have:

• Large and relatively consistent electricity demand
• Meaningful year-round needs for steam, hot water, heating, or cooling
• High or rising electricity costs
• Operations where outages or power-quality events have significant consequences
• Adequate space, fuel access, and a workable permitting and interconnection path

Project economics depend on utility tariffs, natural gas prices, thermal utilization, system design, and operating profile. But as electricity costs rise against a comparatively stable natural gas outlook, more facilities should evaluate whether onsite generation could reduce their grid exposure.

Reduce Your Exposure to Rising Electricity Costs With Onsite Power

You cannot control utility rates or grid investment. But you can take greater control of how your facility is powered and how exposed your operations remain.

Unison Energy develops and operates onsite CHP and microgrid systems for energy-intensive and mission-critical facilities. Through Energy as a Service (EaaS), Unison can finance, design, build, own, operate, and maintain the system without upfront capital investment.

See what a CHP microgrid could mean for your energy costs, grid exposure, and operational resilience. Request a free, no-obligation energy assessment today.

Peter Cavan joined Unison Energy as Head of Strategy in 2025. Peter most recently served as Head of Strategy for Convergent Energy and Power, a developer of distributed storage and solar projects across North America. He managed the teams responsible for corporate and commercial strategy, product management, and regulatory and legislative advocacy. Peter has worked in distributed energy for over 15 years, including Centrica, EnerNOC and Pulse Energy.

Connect with Peter on LinkedIn.

Sources:

1. S&P Global Energy, “Henry Hub Natural Gas Price Update ($/MMBtu),” Q2 2026 forecast compared with Q1 2026 forecast, compiled August 17, 2026.
2. PJM, “PJM’s Updated 20-Year Forecast Continues To See Significant Long-Term Load Growth”
3. U.S. Environmental Protection Agency, “CHP Benefits”
4. U.S. Energy Information Administration, “Annual Energy Outlook 2026”
5. S&P Global Energy, “East Forecast Capacity Change Q2 2026 versus Q1 2026 (GW),” U.S. Power Forecast Q2’26: Natural Gas Gains Ground in the Competition for Market Share, 2026.