PJM 2026/2027 and 2027/2028 Capacity Base Residual Auctions – Update

PJM 2026/2027 and 2027/2028 Capacity Base Residual Auctions – Update.

In our previous article, we reported on PJM’s 2025/2026 Capacity Base Residual Auction results. 

After collaboration with stakeholders, and review by the Federal Energy Regulatory Commission (FERC), PJM recently announced the following updates.  These updates are meant to address resource adequacy issues resulting from tightening generation supply versus growing demand for electricity. 

• PJM’s capacity auction for delivery year 2026/2027 is delayed until July 2025
• The capacity auction for delivery year 2027/2028 is delayed to December 2025.
• Further, PJM has agreed in principle to implement a price cap and a price floor of $325/MW-day and $175/MW-day, respectively, for the 2025/2026 and 2026/2027 delivery years.  In other words, if approved by the FERC, PJM will not clear resource offers above $325/MW-day and will clear all resource offers at or below $175/MW-day. 

See graph below for a historical perspective of RTO capacity prices.     

PJM stated in their filing that these measures are, “designed to strike a balance between allowing the market to respond to increases in supply (which would normally lower prices) and maintaining a stable price signal that encourages long-term investment.”

If you have questions about how this will affect your electricity bill or how you might manage your energy supply costs, please contact us. 

The Avalon Advantage – Visit our website at www.avalonenergy.us, call us at 888-484-8096, or email us at [email protected].

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