The Merchant Power Squeeze
8 filers across 3 sectors are flagging higher cost pressure. First surfaced in 2025Q1, accelerating sharply by 2025Q2. Consensus hardened: 2025Q1 was 71% rising; 2026Q1 now 92%. Reached 6 sectors at its 2025Q3 peak, now 3 sectors. Primarily a cost story (79%), with a demand overlay (19%). Recent filings describe "estimated costs for fuel commitments at March 31, 2026 increased by approximately $25 million for 2027, $150 million per year for 2028 through 2030, and $2.5 billion thereafter." Still spreading across industries.
APD's merchant business is experiencing rising power and fuel costs that it is partially offsetting through price increases, with net profitability impact varying period-to-period based on the margin between cost escalation and pricing power.
DISTINCT NEW FILERS PER QUARTER
✦ WHAT THE DIFF CAUGHT
Language consistently treats power/fuel costs as a structural operational headwind that APD manages through selective pricing rather than as a transient market condition.
REPRESENTATIVE SIGNAL FROM FILINGS
“estimated costs for fuel commitments at March 31, 2026 increased by approximately $25 million for 2027, $150 million per year for 2028 through 2030, and $2.5 billion thereafter”
Fuel commitment costs are expected to rise progressively, from $25 million in 2027 to $150 million annually in 2028–2030, then escalate to $2.5 billion annually thereafter.
“Fuel surcharge revenue increased $146 million for the quarter primarily as a result of higher fuel surcharge rates”
Fuel surcharge revenue increased $146 million in Q1 2026 due to higher fuel surcharge rates, partially offset by lower volume.
DRIVERS