Controlling electricity costs, which are closely related to the peak power reached, while simultaneously reducing completion time and energy consumption, is crucial for achieving sustainability in the manufacturing industry. However, most existing research on energy-efficient flexible job shop scheduling problems primarily focuses on optimizing completion time and energy consumption, often neglecting the critical aspect of controlling electricity costs. With decreasing resources and increasing energy prices, it is necessary to control electricity costs by limiting the peak power reached during production. To address this gap, this paper investigates an energy-efficient flexible job shop scheduling problem with peak power constraint considering setup and transportation time (EEFJSSP-PPST). We establish a mathematical model for EEFJSSP-PPST and propose an improved non-dominated sorting genetic algorithm II (INSGA-II) incorporating several key improvements. We first introduce three scheduling rules in decoding to optimize objectives and employ heuristic rules to generate a high-quality initial population. Then, we propose an innovative cluster crossover method to accelerate convergence and design an adaptive-based local optimization strategy to further enhance performance. Finally, our experiments explore the impacts of different degrees of the peak power constraint on objectives and evaluate the effectiveness of the three scheduling rules. Additionally, the performance of INSGA-II is tested using 135 benchmark instances. The results indicate that INSGA-II outperformed its variations without improvements, achieving the best hypervolume (HV) indicator in 80% of the instances and the best inverted generational distance (IGD) indicator in 68.89% of the instances. Compared to other state-of-the-art algorithms, INSGA-II achieves the best HV and IGD indicators in 82.2% and 81.5% of the instances, respectively, and demonstrates better convergence and a superior Pareto front. Therefore, we conclude that the improvements in INSGA-II are effective and enhance the algorithm’s performance, making it outstanding in solving EEFJSSP-PPST.