CFOs face rising pressure as electricity costs become harder to forecast

Electricity costs are becoming a larger and less predictable risk for big companies, according to a Fortune commentary describing conversations with finance chiefs. The shift matters because even modest misses on power budgets can affect quarterly earnings at companies with large energy needs.

The Fortune commentary said dozens of CFOs have raised concerns over not knowing what their companies are paying for electricity or why bills keep changing. One finance chief told the publication that a single regional utility price change caused the company to miss its quarterly earnings-per-share target.

Energy had long been treated by many companies as a yearly budget item, the commentary said. That approach is under strain as electricity prices rise, demand grows and utilities change rates in ways that can show up in corporate results months later.

Prices are rising faster than standard budgets

Commercial electricity prices rose by nearly 6% a year from 2020 to 2025, according to an Arcadia report cited in the Fortune commentary. That pace is above the 2% to 3% annual assumption the commentary said many businesses use in budgets.

In PJM, the largest wholesale power grid in the United States, power costs climbed 54% from 2024 to 2025, according to Utility Dive. Utility Dive reported that the increase added $23 billion in costs for businesses and consumers compared with the previous year.

The Fortune commentary gave an example of a Fortune 100 company with a roughly $200 million earnings-per-share buffer and annual energy spending of $1 billion. A 5% to 10% miss on that energy budget could consume a large share of the cushion, the commentary said.

Grid demand is tightening supply

The Fortune commentary linked the pressure to rising electricity demand from data centers, electric fleets, manufacturing brought back to the U.S. and building electrification. It also pointed to an aging grid and the retirement of older coal generation before firm replacement power is fully available.

U.S. electricity use is rising about 2% a year after roughly 15 years of flat demand, according to the Fortune commentary. It said communities are increasingly facing choices over which large users receive power first, including data centers and other businesses.

Capacity markets show some of the strain. In the Midcontinent Independent System Operator, which manages the grid across 15 states, the summer capacity price rose to $666 per megawatt-day in 2025 from $30 in 2024, according to Utility Dive.

In PJM, capacity prices reached a record $329 per megawatt-day, according to Utility Dive. The Fortune commentary said prices would have been roughly 60% higher without a regulated cap.

Energy managers move closer to finance

The Fortune commentary said large companies with many sites may deal with hundreds of utilities, each with its own rates, billing cycles, demand charges and surcharges. It said tariff rules are often filed in PDF documents and revised through proceedings that many companies do not track closely.

That complexity has put more pressure on corporate energy managers, who often work with limited staff and fragmented data, according to the commentary. Finance teams, sustainability teams and operations groups may all need the same energy data for budgeting, emissions reporting and facility decisions.

The commentary argued that companies should consolidate bills, meter data, market information and rates in one system. It said that approach can help catch billing errors, improve tariff choices, support procurement decisions and align sustainability reporting with finance data.

Energy management is also becoming tied to the expansion of artificial intelligence, according to the Fortune commentary, because AI models and data centers require large amounts of power. The piece said some companies are moving energy managers closer to CFOs and treating energy strategy as part of growth planning.

This story draws on original reporting from Fortune.