Post: PJM power auction sees prices clear at cap

PJM power auction sees prices clear at cap

An annual power market auction by PJM resulted in prices clearing at the FERC-approved cap of $333.44/MW-day for the entire PJM footprint, a slight increase (+1.3%) from the 2026-27 Base Residual Auction.

The latest Base Residual Auction (BRA) for 2027-28 secured 134,479 MW of UCAP (a generation resource’s maximum output, adjusted for its estimated ability to perform reliably at times of highest system risk) and demand response (DR) to meet projected electricity needs for more than 67 million people across 13 states and the District of Columbia.

The cleared resource mix in this auction includes: 43% natural gas, 21% nuclear, 20% coal, 5% demand response, 4% hydro, 2% wind, 2% oil and 1% solar. These results were impacted by changes in Effective Load Carrying Capability (ELCC) ratings that assess the reliability value of each resource class. The amount of capacity that offered as DR resources, for instance, did not change significantly between auctions, but an increase in ELCC for DR resulted in an increase of cleared megawatts from 5,531MW in the last auction to 7,299MW in the 2027-28 auction. Required DR availability has also been increased to all hours in the year, and the calculation of the winter peak load was updated to a coincident value. PJM said this was a major driver to an increase of the ELCC value for DR from 69% in the 2026-27 BRA to 92% in the 2027-28 BRA.

PJM’s capacity market aims to ensure long-term reliability and stability of the grid by ensuring the appropriate amount of power supply resources (including demand response DR) to meet predicted energy demand. It enables organizations in the PJM region to turn energy from a cost center to a revenue and hedging strategy.

The capacity of the resources procured in the auction (plus FRR resources) is short of PJM’s reliability requirement by 6,623MW, meaning that the committed supply is less than what would be required to meet the one-event-in-10-year reliability standard of a 20% reserve margin. 

Source: PJM

Press Release | 31 July 2025

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