Auction Results: Pricing and Capacity Overview

The PJM 2027/2028 Base Residual Auction (BRA), secured 134,479 MW of unforced capacity generation (UCAP) to meet the demand needed across 13 states and the District of Columbia. The price came in at the FERC-approved cap, $333.44/MW-day (UCAP), for the entire PJM footprint. This price compares with $329.17/MW-day for the 2026/2027 auction for the RTO. This is a 1.3% increase from the last round, but still an upward trajectory year over year for the third auction in a row. 

Rising Demand Driven by Data Centers 

The forecast peak load for the 2027/2028 Delivery Year is 5,250 MW higher than the forecast used for the 2026/2027 BRA. 5,100 MW of that increase is attributable to data center demand.

Reliability Shortfall Signals Supply Constraints 

The 2027/2028 Base Residual Auction is the first auction in which the entire RTO fell short of the reliability requirement. This latest auction leaves no doubt that data centers' demand for electricity continues to far outweigh new supply.

The next Base Residual Auction for the 2028/2029 Delivery Year is scheduled for May 2026, followed by December 2026 for the 2029/2030 Delivery Year. With shortfalls to the reliability requirement, we can expect further increases in the near future.

Strategies to Mitigate Capacity Cost Impacts 

The key to minimizing the impact of these additional costs is peak load management and energy efficiency. At Freedom Energy we provide the Peak Notification Program. This program reduces demand-based charges by curtailing an organization's load when notified of peak demand hours on the grid. There are 5 critical peak days in PJM that are considered in formulating the end user's capacity cost. When proper management and curtailment is done, significant cost reductions can be absorbed.  

Leveraging Demand Response for Cost Savings and Revenue

Additionally, we have partners that we work with to provide Peak Demand Response which can enable an organization to generate revenue through participation in load response programs. Please contact a representative at Freedom Energy to review options.