PJM 2026/2027 Auction Hits Price Cap
In 2026/2027 Base Residual Auction, prices clear at FERC-approved cap; First auction with new resource entry in last three cycles
Publish Date: 7/24/25
Written by: Eric Pinsker-Smith
Estimated Reading Time: 3 Minutes
On July 22, 2025, the PJM Interconnection, LLC (PJM) Reliability Pricing Model (RPM) Base Residual Auction (BRA) for the 2026/2027 Deliverability Year (the 2026/2027 BRA) concluded and, subsequently, PJM issued a Report detailing the 2026/2027 BRA’s outcomes. According to the Report, PJM procured 134,311 MW of unforced capacity (UCAP) at a clearing price of $329.17/MW-Day, which was the FERC-approved price cap (as discussed in PJM Flash 25-17).
We note that the clearing price represents an increase for most load zones relative to the 2025/2026 BRA. For example, the Rest of RTO clearing price increased from $269.92/MW-Day in the 2025/2026 BRA to $329.17/MW-Day in the 2026/2027 BRA; conversely, the Baltimore Gas and Electric (BGE) and Dominion (DOM) zones decreased from $466.35/MW-Day and $444.26/MW-Day, respectively, to $329.17/MW-Day. We detailed the FERC proceeding to establish the price cap alongside other auction dynamics in a recent whitepaper: “From Undersupply to Oversight: RMRs, ELCC, and the Evolution of PJM’s Capacity Market.”
The results signal the persistent tightness of the region’s supply-demand balance, with the cleared capacity exceeding the reliability requirement by just 139 MW (UCAP). The auction reflects the impact of recent market rule changes, including the expansion of must-offer requirements to all resource types, the inclusion of $0/MW-day offers from select Reliability Must Run (RMR) units, and the implementation of a price collar to reduce volatility. It also marks the first increase in new generation and uprates offered into the market in three auctions; 2,669 MW (UCAP) of new generation or uprates offered and cleared. Additionally, PJM noted that 1,100 MW of capacity withdrew their retirement filings.
The following chart shows the zonal capacity clearing prices by Deliverability Year:
The following chart shows the amount of cleared capacity by Deliverability Year:
The 2026/2027 BRA results highlight a market grappling with tight supply margins, evolving rules, and renewed interest from new capacity resources. As PJM continues to adapt its capacity market framework, stakeholders will need to closely monitor price signals, policy developments, and resource participation trends. For a deeper dive into the auction dynamics and regulatory context, download our recent whitepaper or contact us to discuss how these changes may impact your position in the PJM market.