September 16, 2026 · Elkhart
Fed Rate Hike Hits Indiana Manufacturers as PJM Capacity Costs Surge | TEG Daily September 16, 2026
The Fed's first rate hike since 2023 hits Indiana manufacturers as PJM capacity costs surge and a Bristol composite startup challenges RV plywood specs.
Indiana manufacturers are being squeezed from two directions at once this week: the Federal Reserve is expected to raise interest rates for the first time since July 2023, raising the cost of every equipment loan you're carrying, while PJM capacity auction prices have cleared at levels that signal significantly higher electricity costs ahead, driven by forces the Fed cannot touch.
Two announcements. They don't land in the same press release. They land on the same bottom line.
01Elkhart
What Just Opened in Bristol, and Why Your Floor Spec Is Under Pressure
Supersede opened its Bristol, Indiana production facility on September 15th. One hundred thousand square feet in Elkhart County, purpose-built to supply the RV cluster that surrounds it.
02Statewide
Federal Reserve Rate Hike: Who Actually Pays When the Inflation Driver Is Rate-Insensitive
The Federal Open Market Committee is widely expected to lift the federal funds rate by 25 basis points (from the current range of 3.50% to 3.75%) making it the first increase since July 2023. Money markets have priced in an overwhelming probability of that move, and analysts are already framing this as the beginning of an extended tightening cycle.
Questions for Your Morning Huddle
Q: How does the Fed rate hike affect my facility's capital plans right now?
A: Any equipment financing, line upgrade, or facility loan you're carrying or planning becomes more expensive immediately. If you have rate-sensitive debt, model what a 25-basis-point increase costs you annually, and factor in that analysts are calling this the start of a tightening cycle, not a one-time move.
Q: What does the PJM capacity auction price jump mean for my electric bill?
A: PJM capacity auction prices clearing at $329.17 per megawatt-day (up from $28.92) signal that the cost of keeping the grid reliable is being priced much higher going forward. Those costs flow through to your utility's rates over time. Indiana's H.B. 1007 and S.B. 422 will determine how much of that increase lands on manufacturers versus other customer classes.
Q: Should I be looking at composite flooring alternatives to plywood now?
A: If your product spec includes marine-grade plywood or OSB, yes, get a current price comparison against Marine Board or equivalent composites before the Patrick-Lippert merger reshapes supplier leverage in Elkhart County. The 16% drop in RV wholesale shipments means OEM suppliers are under pressure, and spec lock-in decisions made now will be harder to revisit in six months.
Q: How do I find out if my facility qualifies as a "large user" under H.B. 1007 and S.B. 422?
A: Pull your annual electricity consumption and demand data, then compare against the IURC's draft guidance on the large-user threshold. If you don't have someone tracking the IURC rulemaking on this, engage now, before the cost allocation rules get finalized. The window to provide input is narrow and most manufacturers are not in it.
For more on how Indiana's utility cost allocation rules affect manufacturers, read Utility Cost Allocation for Data Centers: How Indiana Manufacturers Avoid Paying for Grid Buildout They Didn't Cause.
For context on how the AES Indiana rate case fits into this picture, the September 15 brief covers the HEA 1002 rate framework directly: HEA 1002 Rate Framework Hits Indiana Manufacturers | TEG Daily September 15, 2026.
This brief
More from Elkhart County
Manufacturers Energy Grant Program
Sponsored by Economic Development Corporation of Elkhart County
Elkhart County manufacturers receive free, ongoing energy auditing and cost control that reduces their energy bills and keeps them low, month after month. Every line item checked and validated, every opportunity found comes with a step-by-step guide to capture it.