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PJM 2027-28 Capacity Auction (Including FRR) Does Not Procure Enough Capacity To Reach Established Reliability Requirement
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PJM's Base Residual Auction for capacity for the 2027-28 delivery year produced a resource clearing price of $333.44 per MW-day for all zones with no separation
The $333.44 per MW-day price reflects the FERC-established price cap
The 2027-28 BRA result is marginally higher than the 2026-27 BRA price of $329.17 per MW-day
Per PJM's auction report, the Adjusted Preliminary Zonal Capacity Price from the 2027-28 BRA is $333.69 per MW-day for all zones with no separation
PJM said that, "The capacity of the resources procured in the auction, plus FRR [Fixed Resource Requirement] resources, is short of PJM’s reliability requirement by 6,623 MW, meaning that the committed supply is less than what would be required to meet the one-event-in-10-year reliability standard of a 20% reserve margin."
The 2027/2028 Base Residual Auction is the first auction in which the entire RTO, including Fixed Resource Requirement areas, fell short of the reliability requirement
PJM said that it continues to hold a reserve margin of 14.8%
PJM said that mitigating factors could improve reliability
PJM said, "Those factors include an expected reduction in the forecasted peak demand for the 2027/2028 Delivery Year; the potential for generators with announced retirements to continue operating; and capability from winter-only resources that could not be matched in the auction with summer-only resources and therefore did not receive an annual commitment, but are expected to be available to provide energy in the winter when the system is at its greatest risk. PJM will conduct an Incremental Auction for the 2027/2028 Delivery Year in February 2027."
“We believe that these factors will result in the system being very close to the one-in-10 standard in the delivery year,” said Stu Bresler, Executive Vice President – Market Services and Strategy, who becomes chief operating officer on Jan. 7. “But this auction leaves no doubt that data centers’ demand for electricity continues to far outstrip new supply, and the solution will require concerted action involving PJM, its stakeholders, state and federal partners, and the data center industry itself.”
The forecast peak load for the 2027/2028 Delivery Year is approximately 5,250 MW higher than the forecast used for the 2026/2027 capacity auction. Nearly 5,100 MW of that increase is attributable to data center demand, PJM said
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PJM Capacity Prices From 2027-28 BRA Remain Elevated, Marginally Higher Than 2026-27
December 17, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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