PJM Capacity Auction Results: What Businesses Should Know

On July 14, 2026, PJM Interconnection, a Regional Transmission Organization (RTO) that runs the power grid and wholesale electricity market across 13 states and Washington, D.C., released the results of its latest capacity auction, the 2028/2029 Base Residual Auction. This auction sets what businesses will pay for grid capacity three years from now.

Prices held near record highs

The auction cleared at $325/MW-day — the maximum price allowed under current rules, known as the price cap. That's a small drop, 2.5%, from last year's cap of $333.44/MW-day. This dip doesn’t mean much because prices are still roughly triple what they were two auctions ago. The total capacity cost secured is now $16.4 billion.

If your energy contract passes capacity costs through to you, expect them to stay high, not go away.

The bigger problem: not enough supply

During PJM’s last auction in December 2025, PJM didn't secure enough capacity for the first time ever to meet its own reliability target, falling short by 6,831 MW. PJM says the grid still has a safety cushion, a 14.7% reserve margin, for now. But a shortfall against the reliability goal, happening while prices sit at the cap, signals that supply is struggling to keep pace with demand.

Why demand is growing faster than new power plants

PJM's forecasted peak load for 2028/2029 came in about 2,000 MW higher than the forecast used for the prior auction, driven primarily by rapid data center expansion. Meanwhile, new generation is arriving slowly. The auction cleared 525 MW of new generation and uprates against a supply mix still dominated by natural gas (46%), nuclear (20%), and coal (18%), with wind and solar contributing 2% and 1% respectively. Demand is scaling faster than the grid is adding firm capacity to meet it.

What this means for your energy strategy

A capacity price holding near the cap, combined with a reliability shortfall that's never happened before, is not a one-year anomaly to wait out, it's the trend line for the next several delivery years. Businesses with contracts renewing in this window should know exactly how much of their supply price is capacity-driven, and whether their current structure locks that exposure in or leaves it floating.

Key Takeaway

The 2028/2029 PJM capacity auction results cleared at $325 per megawatt-day, the price cap, and PJM came up 6,831 MW short of its own reliability target in the prior auction. Capacity costs near the cap are the baseline for the next several delivery years, not a spike to wait out. Businesses renewing supply contracts in this window should know what share of their rate is capacity-driven and whether their contract structure locks that exposure in or leaves it floating