Updated October 30, 2026

Electricity and natural gas support everyday business operations, from store lighting and cooling to hotel heating, commercial kitchens, and industrial equipment. Changes in energy costs can make budgeting and expense management more difficult. Understanding your supply options creates an opportunity to make more informed decisions about these costs.

In eligible U.S. markets, businesses can choose their electricity or natural gas supplier. Availability depends on the business location, local utility, and customer category. Electricity and natural gas supply options may differ at the same location.

What Is Energy Procurement, and Why Does It Matter?

Energy procurement is the process of evaluating and selecting how your business purchases energy. For electricity and natural gas, this means understanding available supply options, pricing structures, and supply terms.

The value can differ from one business to another. One company may prioritize opportunities to reduce costs, while another may place greater value on price stability for financial planning. Some businesses may also be interested in electricity products associated with renewable energy sources.

Competitive markets provide an opportunity to explore these choices. Switching suppliers, however, does not automatically guarantee savings. The outcome depends on the available offer and the circumstances of each business.

Why Do Electricity and Natural Gas Costs Change?

Electricity prices reflect several factors, including power plant fuel costs, the construction and operation of generating equipment, grid maintenance, and weather conditions. Extreme heat or cold can increase cooling and heating needs, putting pressure on energy demand and prices. Storm damage and other disruptions can also increase the cost of maintaining and repairing the grid.

Natural gas prices are influenced by production, storage, imports, exports, and consumer demand. When heating needs rise suddenly, supply cannot always increase at the same pace. Stored gas helps meet demand, but prolonged cold weather can still affect market conditions.

These factors help explain why energy pricing can change even when a business has made no significant changes to its operations.

Why the Energy Rate Does Not Explain the Entire Bill

An electricity bill can include energy consumption charges, transmission and distribution costs, fixed charges, and—for some commercial rate structures—demand charges.

Energy charges relate to the amount of electricity consumed. Demand charges generally reflect the highest level of power used during a specified period. Some rates also vary by season or time of use. Both total consumption and the pattern of equipment use can therefore affect electricity costs.

Natural gas costs also have two main components: the gas itself and the cost of transporting and distributing it to the customer. Taxes and other applicable charges contribute to the amount paid. As a result, a change in the market price of natural gas does not necessarily produce an equivalent change in the total bill.

For a business, the practical point is straightforward: evaluate an energy supply offer in relation to the portion of your costs it covers.

An Opportunity for Greater Price Stability

One potential benefit of energy procurement is greater price predictability. A fixed rate can hold the covered supply price steady for a defined period, helping with budget planning. A variable rate changes according to the supply terms and may rise or fall with market conditions.

Price certainty can involve a trade-off. A fixed rate may initially cost more, and a business may need to wait until the fixed-price period ends to benefit from lower market prices.

A fixed rate also does not mean a fixed total bill. Energy consumption and charges outside the fixed rate can still affect the final amount.

What Happens to Delivery and Utility Services?

In markets with supplier choice, the energy supplier and the local distribution utility have different roles. The supplier sells electricity or natural gas, while the utility delivers it through the existing infrastructure.

Changing suppliers does not replace the power lines or gas pipelines serving your business. Electricity outages and distribution network problems remain the responsibility of the local utility.

Understanding this distinction helps businesses recognize which parts of their energy service and costs can be affected by a supply decision.

The 2027 Electricity Price Outlook

The U.S. Energy Information Administration’s October 2026 outlook projects an average wholesale electricity price of approximately $52 per megawatt-hour across the 11 trading hubs it monitors in 2026. That is 11% above the 2025 average. The report identifies severe winter weather and high summer temperatures as contributors to price increases in certain regions.

For 2027, EIA projects an average wholesale price of $49 per megawatt-hour. Regional trends differ, however, with prices expected to decline in some markets and increase in others.

At the same time, electricity demand in the commercial sector, including data centers, is projected to grow by 2.8% in 2027, while industrial demand is expected to increase by 2.7%. The projected decline in average wholesale prices therefore occurs alongside continued growth in business electricity demand.

The 2027 Natural Gas Price Outlook

The same report projects a 2027 average Henry Hub spot price of $3.16 per million British thermal units, approximately 9% below the 2026 annual average.

Much of that annual decline reflects the unusually high prices recorded in January 2026. The report explains that winter storm conditions increased heating demand and constrained supply, pushing prices higher. By comparison, the projected average for February through December 2027 is approximately the same as the corresponding period in 2026. A lower annual average therefore does not mean gas is expected to be cheaper in every month.

Relatively high natural gas inventories and production growth are expected to limit upward price pressure. Prolonged cold weather could nevertheless increase withdrawals from storage. The report also anticipates seasonal price changes, with Henry Hub prices reaching $2.60 in April and May before rising to $3.90 in December 2027.

These figures are market forecasts rather than supplier offers or projections of an individual business’s final electricity and natural gas bills.

At solaraX, we help commercial and industrial businesses explore electricity and natural gas procurement options in eligible U.S. markets. Contact us to discuss the energy supply options available for your business.