Navigating the Energy Storm: Key Takeaways for TRSA Members

With renewed focus on energy markets and rising volatility across key regions, operators are taking a closer look at how shifting conditions could impact their bottom line. That was the focus of TRSA’s March 31 webinar, “Navigating the Energy Storm,” sponsored by Environ Energy and presented by Paul Lavallee, director of energy solutions; and Nick Stanziola, director of energy strategy, Environ Energy.

The session made clear that this spring, energy costs remain one of the most unpredictable variables on the balance sheet. Speakers walked members through the market forces shaping both natural gas and electricity prices, along with practical ways operators can better manage risk.

What’s Driving Energy Costs

A major topic was the impact of extreme weather. Stanziola explained that Winter Storm Fern in January, which affected more than 40 states, created unusually sharp price spikes earlier this year because of both its severity and its timing. “It really was the perfect storm, for lack of a better term,” he said, noting that the event coincided with lost trading days and the monthly period when February gas prices were being set. The result was a dramatic, short-term jump in natural gas prices that many businesses felt on their invoices.

The webinar also highlighted a longer-term concern: rapidly growing electricity demand from data centers, particularly in regions such as Northern Virginia, the Mid-Atlantic and Texas. Speakers noted that data center development is moving faster than new transmission and generation infrastructure can be built, which could place added pressure on the grid and increase costs over time.

Operators in the Mid-Atlantic and surrounding states – served by the PJM Interconnection, the regional grid that coordinates electricity across 13 states and Washington, DC – face an added concern. Capacity costs in that market have already increased sharply, and with no pricing cap currently set for 2028–’29, total market costs could approach $30 billion, a sharp increase from recent years. Those costs are ultimately passed through to end users. Stanziola said a cap is likely, though details remain uncertain.

Where Operators Can Take Action

For operators, one of the clearest takeaways was the growing value of efficiency strategies such as load shedding, demand response and on-site generation. As capacity costs rise, those options may become more financially attractive than they were in the past.

Lavallee noted that while these strategies haven’t always made financial sense, that equation is changing. “As capacity costs continue to increase, the economics may change,” he said. “Adjustments that didn’t make sense before may be worth another look.”

At the same time, Stanziola emphasized that U.S. energy fundamentals remain stronger than many headlines might suggest. Even with conflict in the Middle East and volatility in global LNG markets, he said the United States is relatively insulated because of its strong domestic natural gas supply and export constraints. For members, that means international disruption may not always translate into the same level of price shock at home.

Rather than trying to time the energy market, speakers encouraged operators to focus on reducing exposure and managing risk through smarter energy usage, well-structured supply contracts and forward planning.

A recording of the webinar is available in TRSA’s On-Demand Learning Center.