CPV RETAIL BLOG

July 15, 2026

The Hidden Cost of Summer Volatility

As we saw during July 4th week when summer temperatures rise, so does the potential for grid volatility and with grid volatility comes higher uplift charges for energy retail suppliers.

During periods of grid stress, ISO/RTOs may require generators to remain available or operate outside of their normal dispatch schedule in order to maintain system reliability. In some cases, generators that are out of service may be placed on standby just in case they are needed to support the grid.

Reserve prices were close to $0/MWh for almost the entire six-month period. However, during Winter Storm Fern in late January, PJM operating reserve prices briefly surged to more than $50/MWh in the real time market. These are the costs incurred by buying fuel at elevated prices that are passed on to suppliers as a make-whole payment. It is important to review your commodity contracts as this could be an unexpected pass-through cost.

Around late January / early February 2026, there is a sharp spike:

  • The real-time reserve price (orange) jumps to roughly $55/MWh.
  • The day-ahead reserve price (blue) also increases, but only to around $6–8/MWh.

During periods of grid stress (i.e., Winter Storm Fern), the cost of maintaining system reliability can increase substantially. If a customer’s contract includes pass-through provisions, these higher reserve charges may be reflected in their bill. January’s reserve costs were an outlier. That’s when your supplier’s risk management matters most.
 
While these actions are part of the ISO/RTOs’ established emergency operating procedures, they are relatively infrequent and should not be interpreted as a change in law or market regulations. Rather, they are reliability measures designed to ensure the continued stability of the electric grid during periods of heightened system stress.
 
Intense weather, such as winter storms and extreme heat, can send wholesale energy prices soaring. While some suppliers pass those additional costs on to customers, the CPV Retail approach is to help manage that risk to provide greater price certainty.

Check your contracts and supplier charges to ensure you understand how these additional costs are handled.