June 6, 2025 Preparing for Volatile Energy Markets This Summer

Plan now to prevent high summer energy bills with smart forecasting, demand reduction and energy-saving strategies.

By Brent Rice, Quantitative Analyst and Meteorology Lead

Summer brings sunshine and longer days, but for commercial energy managers, it also brings something less welcome: higher energy bills. Soaring temperatures that drive increased cooling, paired with other market challenges, make rising energy costs a likelihood for many organizations this season.

These factors make it critical for manufacturers and facility operators to proactively address energy consumption.

The Summer 2025 Outlook

When making seasonal forecasts, we start by looking at recent trends in temperatures, and summer is a season we’ve seen significant trends in. Over the past 10 years from the months of June through August, one pattern has been especially striking: cooler-than-normal temperatures are increasingly rare. Instead, summer temperatures have consistently trended warmer than the 30-year historical average across most of the U.S.

Looking ahead to this summer, ocean temperature patterns in the North Pacific and the Atlantic are anticipated to contribute to higher-than-normal temperatures nationwide. Forecasts from the National Oceanic and Atmospheric Administration (NOAA) point to elevated chances of above-average warmth nationwide, with the strongest probabilities concentrated in the western U.S., New England and Florida. This trend is expected to persist throughout June, July and August.

Weather is a key driver of electricity prices, as warmer-than-average summers often lead to increased cooling demand and a tighter energy market, so it’s crucial for manufacturing businesses to plan for potential price volatility. 

The Current Energy Market Landscape

The dynamics of the energy market are continuously changing, with many factors affecting prices.

Rising Load Demand

Factors such as the build-out of data centers, the push for electrification and the reshoring of American manufacturing are driving up electricity demand. As industries grow and consumption increases, the pressure on energy infrastructure intensifies.

The Role of Natural Gas in Energy Supply

Natural gas remains the leading energy source for the U.S. power grid, influencing power prices most of the time. However, the expansion of natural gas storage is not keeping up with demand. This, combined with greater reliance on natural gas due to the transition away from coal-fired plants, has made prices more volatile.

Renewable Energy Growth and Grid Challenges

While renewable energy sources like wind and solar are growing, battery storage projects meant to offset periods of low renewable energy generation often face delays. Without sufficient storage, grid reliability can waver, further stressing energy systems during peak demand periods.

Strategies to Prepare for High Energy Bills

While rising prices may seem unavoidable, commercial energy customers like manufacturers can take proactive steps to reduce their energy bills. Here are practical measures that can help ease the burden:

1. Reduce Peak Demand

About half of a manufacturing company’s energy bill stems directly from its energy demand during peak periods. The more energy-intensive a manufacturer’s operations are at specific intervals, the higher its costs will be. Manufacturing business’s can make improvements by:

• Implementing Energy Benchmarking: Track your facility’s energy usage over time to spot inefficiencies and set achievable goals for reduction.
• Adopting Real-Time Energy Monitoring: Use technologies that provide immediate insight into your energy consumption patterns, helping you identify opportunities to reduce demand during peak times.
• Switching to LED Lighting: LED lights are energy-efficient and produce less heat compared to traditional lighting, which reduces the strain on cooling systems.
• Adjusting Operation Schedules: Perform energy-intensive tasks, like large-scale equipment cleaning or maintenance, during off-peak hours when rates are lower.
• Upgrading Cooling Systems: Modern, energy-efficient cooling systems use advanced technologies to provide the same comfort with lower energy usage.

2. Educate Employees on Energy-Saving Practices

Staff plays a critical role in helping manage energy costs. Manufacturers can provide training on simple actions like shutting down equipment and turning off lights when not in use. Encourage reporting of energy waste and create an internal culture of energy-conscious behaviors.

3. Invest in Energy-Efficient Technology

Long-term cost efficiency often requires some degree of up-front investment. Consider updating older machines and infrastructure with energy-efficient alternatives to enhance productivity while lowering consumption. This includes everything from HVAC upgrades to installing equipment that automates peak-demand management.

4. Work with Your Supplier

Consulting with an experienced energy supplier or advisor can help you develop a long-term strategy tailored to your facility operation’s specific needs. They can provide insights into market trends, analyze your energy profile and suggest procurement strategies to optimize costs.

Establishing an Energy Benchmark for Your Organization

Energy benchmarking is a results-driven approach that enables internal comparisons of energy efficiency efforts and helps manufacturers ensure their efficiency efforts are successful. Regardless of the type of building or facility, having an energy benchmarking plan is fundamental to immediate and long-term sustainability and fiscal strategy.

With an understanding of where operations are currently, manufacturers can determine when and how their team is using energy, as well as the impact on energy costs. For help in gathering and analyzing this data, it can be beneficial to consult with an expert, such as your energy supplier. Businesses are most likely to have success implementing energy efficiency efforts and controlling costs when operations, maintenance and financial teams work together.

After an energy review with internal and external experts, implementing a real-time monitoring program can help identify usage patterns and opportunities for efficiency improvements, benchmark usage before improvements and verify the impact of these improvements. A monitoring program allows manufacturers to make informed decisions regarding energy allocation, peak demand management and equipment optimization.

A Smarter Way to Approach Energy Management This Summer

Facility managers face the challenge of managing high energy costs during the summer year after year. However, by understanding the forces driving market fluctuations and adopting proven strategies to minimize consumption, it’s possible to gain more control over energy expenses.

Proactive steps like reducing peak demand, upgrading to energy-efficient systems and educating staff on conservation techniques can deliver significant savings. Additionally, partnering with energy experts ensures you stay ahead of potential price fluctuations and creates a sustainable energy strategy.

By preparing now, your manufacturing business can reduce energy costs and operate more efficiently this summer and beyond.

About IGS Energy
IGS Energy is redefining what it means to be an energy retailer. It empowers home and business customers to source the energy that’s right for them, manage their costs and carbon footprint, and protect the systems that keep their operations running efficiently.

IGS Energy offers traditional and sustainable technologies and services, including 100% renewable electricity, carbon-neutral natural gas, solar energy systems and other energy-efficiency products. They serve as a trusted advisor to more than 1 million customers nationwide, making an ever-changing and complex industry simpler.

For more information, visit igs.com.

About the Author:
Brent Rice is a Quantitative Analyst and Meteorology Lead with IGS Energy. As a member of the Forecasting and Supply Analytics team, his responsibilities include offering pertinent weather forecast information to members of the company’s supply team and contributing analytical skills and forecasting expertise to various departmental projects.

Connect with IGS Energy:
Facebook: IGSEnergy
Instagram: @IGSEnergy
LinkedIn: IGS Energy

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