The cleared resource mix includes: 45% natural gas, 21% nuclear, 22% coal, 4% hydro, 3% wind and 1% solar.
The price came in at the FERC-approved cap of $329.17/MW-day (UCAP), for the entire PJM footprint.
This price compares with $269.92/MW-day for the 2025/2026 auction for the RTO, except for the BGE and Dominion zones, which cleared at $466.35/MW-day and $444.26/MW-day, respectively. Read more here.
PJM's 2024/2025 auction price was $28.92 MW-day.
The market cap was imposed as a result of a lawsuit by Gov. Shapiro against PJM which put in place a new floor and cap on electricity bids that can be accepted by PJM. Read more here.
PJM said the clearing prices would have been $380.57/MW-day without the market cap. Read more here.
The cap saved Pennsylvania electric consumers an estimated $1.6 billion. Read more here.
PJM said the wholesale capacity accounts for a relatively small portion of retail electricity bills; PJM would expect the cap price to translate to a year-over-year increase of 1.5–5% in some customers’ bills, depending on how load serving entities and states pass on wholesale costs to consumers.
Given that prices decreased in two zones, PJM said it is possible that consumers in some areas could see a drop in retail rates [not Pennsylvania].
Reactions
John Quigley, Senior Fellow at the Kleinman Center for Energy Policy, said, “The result was expected - more electricity price increases, piled on top of the price increases resulting from the previous auction, market forces, and ill-advised federal legislation.
“PJM remains hugely overreliant on fossil fuel generation, and people are paying the price.”
Tom Rutigliano, senior advocate, Climate & Energy at Natural Resources Defense Council said, “Today’s auction results are just more bad news for PJM’s customers. Prices went up for two reasons: ever increasing demand from data centers and lower reliability from gas-fired power plants.
“The amount of available generation decreased almost entirely because of gas plant reliability problems, not power plant retirements.
“The bright spot in this auction is a 75% increase in wind and solar. That jump will save PJM from an unacceptable risk of black-outs in 2026. PJM will stay reliable in 2026 thanks to the increase in renewable power.
“However, these low-cost resources still only account for 4% of the PJM’s supply, so PJM must continue to significantly speed up approvals of the 85 gigawatts waiting to connect.
“The only real solution to higher energy prices is to keep adding more renewable energy and storage to the grid.
“At the same time, states must address the siting and permitting challenges that are keeping the 37 gigawatts of PJM-approved projects from starting construction.
"Bringing just a fraction of these projects into service will ensure more affordable and reliable electricity.”
Sharon Pillar, Executive Director of the Pennsylvania Solar Center, offered these comments--
“Make no mistake – the high prices projected by PJM’s power capacity auction for 2026-27 will be even worse in the following years as a result of the federal budget bill recently passed by Congress and signed into law by President Trump that seeks to stymie renewable energy and energy efficiency.
“With the exception of Congressman Brian Fitzpatrick, all of Pennsylvania’s Republican Congressional delegation voted for this energy rate increase, ignoring a multitude of warnings and research-based evidence from the energy industry and consumer advocates.
“Power capacity pricing is the cost our electric grid pays for large power generators to be available to supply power in the years following the auction, especially during peak energy moments, like during sweltering summer heat or in the middle of a winter deep freeze.
“Solar power, batteries, and energy efficiency measures have been proven to help reduce this peak energy usage, keeping prices down for all consumers by reducing the amount of expensive (and dirty) power needed from these generators.
“For example, during the hottest day of the recent heat wave, New England’s power grid was able to avert blackouts and save consumers more than $8 million in one day because thousands of smaller solar power systems and a growing network of batteries reduced demand from the power grid.
“However, President Trump and Congressional Republicans slashed incentives for investments in solar, energy efficiency, and other sources of renewable energy, which will make it more difficult to build more of the cheapest energy sources like solar and wind that save consumers money.
“At the same time, President Trump and Senator McCormick [PA-R] announced their plans to build power-thirsty data centers in the Pittsburgh region, which will drive up demand and prices for energy even more.
“They indicated plans to build more nuclear reactors and gas turbine plants to help meet energy demand created by these data centers, but those build-outs will take at least seven years – or may never materialize because of the enormous cost to build them – while solar would take less than half of that time.
“In the meantime, as PJM’s capacity auction has shown, consumers will pay the price. We should be building more cheap, clean energy, not less.”
The Clean Power PA Coalition issued this statement from its chair, Katie Blume of Conservation Voters of Pennsylvania--
“The full impacts to Pennsylvania consumers of the recently completed capacity auction run by PJM Interconnection are still being assessed, but at this point it is clear that it will mean even higher electricity bills for families and businesses alike next year, on top of increases that took effect just last month.
“We are grateful to Governor Shapiro for taking action to forestall even bigger increases that would have occurred if he had not taken legal action compelling PJM to make changes to its auction process.
“We are facing increasing demand for energy, driven largely by electricity-devouring data centers; a dysfunctional and backed-up PJM process for connecting new energy sources, especially cleaner, cheaper renewable energy projects, to the grid; and PJM’s outmoded design for purchasing energy.
“This is further proof that PJM must improve its decision-making processes to give consumers a greater say in the decisions that affect them, as a bipartisan group of governors including Governor Shapiro have urged.
“PJM also must remove barriers to cheap, clean, and reliable energy by quickly clearing its huge backlog of new energy projects waiting to connect to the grid.
“Finally, it must continue reforming its process for purchasing power to ensure that people are not overpaying for their electricity.
“These reforms are needed largely because we will not have reliable and affordable electricity if we do not expand our energy base.
“Less than 5% of Pennsylvania’s electricity currently comes from cheaper, home-grown clean energy sources like solar, wind, and battery storage, which are the only new sources that can be quickly deployed to meet rising demand this decade.
“We need a more balanced and diversified market to keep prices down and the lights on.”
Responding To Investment Signals
Even with the short, one-year lead time, PJM said the auction results and other indicators show supply is responding to the investment signal from the 2025/2026 capacity auction:
-- New Capacity: The total amount of new generation and generation uprates in this auction was 2,669 MW UCAP. This represents the first increase in new generation and uprates in the last four auctions.
-- Withdrawn Deactivations: Since the 2025/2026 Base Residual Auction results were posted on July 30, 2024, 17 generating units totaling approximately 1,100 MW worth of Capacity Interconnection Rights have withdrawn their retirements
-- Longer-Term Investment: While not impacting this auction, PJM’s Reliability Resource Initiative this year attracted more than 11,000 MW (ICAP) in planned new projects and upgrades to existing generators, indicating significant interest from investors. ICAP or installed capacity represents the maximum output of a resource.
At the same time, electricity demand is growing rapidly. PJM’s forecasted peak load for the 2026/2027 Delivery Year increased year to year by more than 5,400 MW, driven largely by data center expansion, electrification and economic growth.
Supply/Demand Remains Tight
The cleared resource mix includes: 45% natural gas, 21% nuclear, 22% coal, 4% hydro, 3% wind and 1% solar.
This auction’s cleared volume was just over (by 139 MW UCAP) the projected reliability requirement, underscoring the region’s tightening supply-demand balance.
The target installed reserve margin is set to meet the one-in-ten reliability standard accounts for anticipated resource performance and a margin of error for demand forecast uncertainty.
Reliability concerns associated with reducing supply and increasing demand are not limited to PJM; the North American Electric Reliability Corporation has identified elevated risk to the reliability of the electrical grid for much of the country outside of PJM. In response, PJM continues to advance reforms that accelerate the interconnection of new resources.
As is consistently the case with these capacity market auctions, market power mitigation protocols resulted in the application of limits to offer prices from existing generation under the Three-Pivotal Supplier Test.
Market Rule Changes Implemented
The auction also reflected several recent market rule changes, including:
-- Expanded capacity must-offer requirements for all resource types (including solar, wind, batteries and hybrid resources)
-- A new price cap ($329.17/MW-day) and floor ($177.24/MW-day) approved by FERC (prices for UCAP)
-- PJM’s submission of $0 offers for specific Reliability Must-Run units, ensuring reliability while managing costs (revenue to be allocated as a credit to associated load)
-- Retirement of the Energy Efficiency product category
Accelerating Resource Integration
PJM continues to focus on enhancing its process for connecting new generation resources onto the system, which includes clearing all the projects in its transition queue over the next 18 months, opening its new cycle process in spring 2026, and leveraging artificial intelligence through our partnership with Google to reduce processing time.
PJM is also hopeful that recent proposals related to Capacity Interconnection Rights, Surplus Interconnection Service and the FERC-approved Reliability Resource Initiative will result in supply additions.
PJM has processed more than 60% of the transition backlog in its interconnection queue under its FERC-approved reform process, with another 63,000 MW (ICAP) slated for review in 2025 and 2026.
While more than 46,000 MW of installed capacity (ICAP) of already-approved resources have yet to be built, many are navigating challenges outside PJM’s scope, such as permitting timelines, supply chain constraints and evolving project economics.
PJM remains focused on: maintaining a transparent market framework that accurately reflects supply/demand conditions; streamlining interconnection processes; and working collaboratively with states, developers and industry to support solutions that can bring needed capacity online.
Next Auction December 2025
The next Base Residual Auction for the 2027/2028 Delivery Year is scheduled for December 2025, as PJM works toward resuming its three-year-forward planning cycle.
A detailed report of the results is available on PJM’s capacity market webpage.
Click Here for the PJM announcement.
Related Articles This Week:
-- PJM Electricity Capacity Auction Bids For 134,311 MW Come It At Highest Price Allowed Under FERC-Approved Cap [PaEN]
-- What The A.I. Data Center & Energy Summit Missed: Exploding Electricity Demand Already Raising Prices - Ratepayers Need Protection; No Longer An ‘All Of The Above’ Energy Strategy [PaEN]
-- What The A.I. Data Center & Energy Summit Missed: It’s Deja Vu - False Promises, Dirty Power - Our People And Communities Deserve Respect [PaEN]
-- PJM Interconnection Extends Hot Weather Alert To July 24 And To Entire Service Area [PaEN]
-- July 31 Webinar - Why Is My Electricity Bill So High? PJM Decisions Have Driven Up The Cost Of Electricity [PaEN]
-- PUC: Pennsylvania Doubles Solar Power Generation In Just 17 Months To 2 Gigawatts [PaEN]
-- Registration Open! Penn State University To Host 5th Annual Online Solar Law Symposium Aug. 21 [PaEN]
-- Whitehall Borough Launches New Rooftop Solar System Installed With Help From PA Solar Center, Elysium Solar Energy In Allegheny County [PaEN]
NewsClips:
-- Post-Gazette: PJM Says Settlement Of Complaint Filed By Shapiro Tamped Down Electricity Auction Prices [$380.57 vs. cap of $329.17]
-- WHYY - Sophia Schmidt: PJM Grid Operator Auction Will Result In Higher Electricity Bills For PA, NJ, DE Customers
-- PA Capital-Star/Inside Climate News: PJM Capacity Price Hits Cap As Clean Energy Projects Remain Stalled
-- Gov. Shapiro: Legal Action Against PJM Saved PA Consumers An Estimated $1.6 Billion
-- Utility Dive: PJM Capacity Prices Set Another Record With 22% Jump; Without Market Cap They Would Be 18% Higher
-- Gov. Shapiro: Legal Action Against PJM Saved PA Consumers An Estimated $1.6 Billion
-- Utility Dive: PJM Capacity Prices Set Another Record With 22% Jump; Without Market Cap They Would Be 18% Higher
-- Reuters: Biggest US Power Grid [PJM] Auction Raises Prices By 22% To New Heights
-- Inside Climate News: Are You A Customer Of PJM? Its Capacity Auction Will Affect Your Electricity Prices In 2026
-- Bloomberg: Biggest US Power Sale [PJM] To Offer Glimpse Of A.I.’s Cost To Consumers [Results To Be Announced July 22 at 4:00 p.m.] [PDF of Article]
-- Utility Dive Guest Essay: Openings For CEO And On PJM’s Board Are An Opportunity To Chart A New Course - By David Lapp, Maryland Office Of People’s Counsel advocating for residential utility consumers
-- Citizens Voice: Debate Over Rumored A.I. Data Center Draws Large Crowd In Dorrance Twp., Luzerne County
-- PennLive: Owners Of Idled Steelton Steel Mill Raise The Potential Of The Site Becoming A.I. Data Center In Dauphin County
-- PennLive - Charles Thompson: Nuclear Regulatory Commission Holds July 31 Meeting At Penn State Harrisburg Campus On Restart Of Three Mile Island Nuclear Power Plant; Webinar On Aug. 6
-- LancasterOnline: Work Already Underway On 450,000 Sq. Foot A.I. Data Center Inside A Vacant Printing Plant; Officials Say It Won’t Affect Water, Electrical Grid
-- PennLive: Controversial A.I. Data Centers Set For Big Expansion In PA, Some Ask, At What Cost?
-- WESA - Rachel McDevitt: Many Projects Credited To A.I. & Energy Summit Were Already Underway
-- PA Capital-Star: Energy And Tech Companies Said They’re Investing $90 Billion In PA, Fossil Fuel Projects Make Up Largest Category
-- Post-Gazette Guest Essay: Environmentalists Don’t Want To Talk About Energy, A.I. Policy - By Jeff Nobers, Pittsburgh Works [They weren’t invited to invitation only McCormick Summit]
-- Pittsburgh Works: Environmentalists Against Respectful Civic Discussion Of Energy, A.I. Policy [They weren’t invited to invitation only McCormick Energy A.I. Summit]
-- TribLive Guest Essay: Local Action Can Protect Allegheny County From Rising Energy Costs Caused By President’s Budget Bill - By Gregory Bernarding, Pittsburgh Regional Building Trades, & Jeanneen Zappa, Keystone Energy Efficiency Alliance
-- WESA - Rachel McDevitt: Solar For All Program At Risk In PA If State Lawmakers Don’t Act Soon
-- MCall: How Federal Megabill Will Impact Green Energy Investments In Lehigh Valley
-- Penn State Extension: Geothermal Energy And Agriculture In Pennsylvania
-- Financial Times: ‘Net Zero’ Emissions Standard Paused As Shell Quits
-- Reading Eagle: Frequent Met-Ed Power Outages In Southeastern Berks Called Into Question
-- Utility Dive: A.I.- Powered Attacks On Computer Systems Rise, Now Outrank Other Risks For Information Security Officers
[Posted: July 22, 2025] PA Environment Digest
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