Consumers across the PJM Interconnection footprint will pay $14.7 billion for capacity in the 2025/26 delivery year, up from $2.2 billion in the last auction.

• Prices in the PJM Interconnection’s latest capacity auction hit record highs, which should provide incentives for power plant companies to build new generating resources and keep existing ones operating, according to the grid operator.
• For the majority of the PJM region, capacity prices for the 2025/26 delivery year soared to $269.92/MW-day, up from $28.92/MW-day in the last auction, the grid operator said in an auction report. Prices hit zonal caps of $466.35/MW-day for the Baltimore Gas and Electric zone in Maryland, and $444.26/MW-day for the Dominion zone in Virginia and North Carolina. The auction’s total cost to consumers jumped to $14.7 billion from $2.2 billion in the last auction.
• The spike in capacity prices was driven by power plant retirements, increased load, and new market rules that aim to better reflect risks from extreme weather — coupled with new resource accreditation metrics that are designed to reflect how much capacity a resource delivers during system stresses, Stu Bresler, PJM executive vice president for market services and strategy, said during a media briefing.

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The auction prices mainly reflect tighter electricity supply and higher demand, according to Bresler.

Bids were about 6,600 MW lower than in the last auction due to power plant retirements and must-offer exceptions for power plants heading towards shutdown, Bresler said. Also, estimated peak load increased to about 153,000 MW from 150,000 MW, he said.

In the auction, PJM bought 134,672 MW for the capacity year that starts June 1, 2025, according to the grid operator. About 135,694 MW was offered in the auction, not counting energy efficiency resources.

The cleared capacity included about 110 MW of new generation and 755 MW from uprates to existing or planned generation. The quantity of new generation is down from the previous auction where there was nearly 330 MW of new generation.

Gas-fired generation accounted for 48% of the cleared capacity, followed by nuclear at 21%, coal at 18%, demand response at 5%, hydroelectric at 4%, solar and wind at 1% each, and 2% from other resources, according to PJM.

It is unclear how the jump in capacity prices will affect customer bills, according to Bresler. Last year, capacity costs accounted for roughly 8% of customer electric bills, he said.

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