[Market Monitor] PJM Capacity Auction Locks in Another Year of High Costs

December 18, 2025

PJM Capacity Auction Locks in Another Year of High Costs

The PJM Capacity results are have been published for 2027/2028, and capacity costs across the RTO will remain strong for another year. While prices have only increased by 1.3% as compared to 2026/2027, they once again cleared at the artificial ceiling set for the power year.

Key Impacts:

• The June 2027 – May 2028 auction rates were set, with the price for the entire RTO clearing at the revised ceiling price of $333.44 / MW-day.
• The price represents a 1.3% increase to the 2026/2027 rates. Customers with lower load factors (those with inconsistent energy demand) will experience slightly higher cost increases.
• Overall supply, including from Demand Response, did not grow significantly, leaving reserve margins below targets as energy needs continue to rise.

Fixed-Price Contracts May Be Affected

Even customers on fixed-price agreements are likely to see increases, as contract clauses permit pass-through adjustments in response to regulatory changes.

For more information about this or other developing regulatory matters that may affect your energy supply costs please contact your Tradition Energy Advisor.