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PJM Capacity Auction Hits Price Cap Again, Leaves 6.8 GW Shortfall, Aurora Says

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PJM's latest capacity auction again reached the maximum clearing price and left a 6.8-gigawatt reliability gap, Aurora Energy Research said in a Tuesday report.

PJM capped the 2028/29 Base Residual Auction at $325 per megawatt-day, representing about $16.4 billion a year. Aurora said the auction would have cleared at $555/MW-day without the price collar.

The price collar produced identical clearing prices across every locational deliverability area, although the ComEd zone would have reached $777/MW-day without the cap, Aurora said.

PJM added 3.4 GW of supply before the auction, but higher effective load carrying capability values accounted for most of the increase. Only 525 MW of new capacity secured contracts, Aurora added.

Growing electricity demand further tightened the market after PJM increased its reliability requirement by 3.6 GW, lifting the capacity deficit to 6.8 GW, according to the report.

Aurora's base-case forecast exceeded the auction outcome by about 1 GW because fewer new generation projects and demand-response resources participated than the firm had anticipated.

Aurora expects tight supply-demand conditions to continue through the next several auctions as load growth outpaces capacity additions, although ongoing market reforms could alter future price outcomes.

PJM is advancing proposals that would require new data centers to secure dedicated capacity through bilateral agreements or the planned Reliability Backstop Procurement, while also introducing flexibility requirements, Aurora said.

The PJM board expects to file final proposals later this month, while stakeholders will continue reviewing broader market design changes through the remainder of 2026, Aurora said.

Aurora expects PJM's planned Reliability Backstop Procurement to secure additional capacity after several price-capped auctions failed to attract meaningful new generation and demand-response resources.

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