PJM Capacity Auction Secures 138,318 MW, Falls Short of Reliability Requirement

PJM Interconnection, which manages the wholesale electricity grid for 13 states and the District of Columbia, has announced the results of its 2028/2029 Base Residual Auction. The auction procured 138,318 megawatts (MW) of unforced capacity, including generation and demand response, to meet projected electricity needs for over 67 million people.

Despite the procured capacity, the total available supply falls short of PJM's reliability requirement by 6,831 MW. This shortage means the system may operate with slimmer reserves and increased risk of not meeting the one-in-10-year peak demand standard. While not guaranteeing blackouts, the shortfall indicates a tighter operational margin for the grid.

The price for capacity was set at the Federal Energy Regulatory Commission (FERC)-approved cap of $325 per megawatt-day (MW-day). This represents a 2.5% decrease from the prior auction's price. The total value of cleared capacity in the auction reached $16.4 billion, though this figure does not represent the total cost to consumers, as many utilize alternative hedging mechanisms.

PJM President and CEO David Mills stated that electricity demand continues to outpace supply. The organization is undertaking multiple initiatives to address this imbalance, including streamlining the generation interconnection queue, planning a "Backstop Procurement" to cover near-term shortages, and developing new frameworks for managing large new loads such as data centers.