➤ PJM Interconnection’s 2027–2028 Base Residual Auction delivered a clear signal of tightening grid conditions. The auction cleared at $333.44 per megawatt-day, the maximum price allowed under current FERC rules, with uniform pricing applied across PJM’s entire footprint. While the headline price drew attention, the more consequential outcome was structural: the auction failed to procure roughly 6,600 MW of capacity needed to meet PJM’s reliability target.

This shortfall reflects a growing mismatch between supply additions and accelerating demand. PJM cited surging load forecasts, with data centers emerging as a primary driver, particularly in Mid-Atlantic and Midwest zones where hyperscale development continues to concentrate. At the same time, retirements of older thermal assets and slower-than-expected interconnection timelines have constrained new supply entering the market.

Because PJM’s capacity market uses uniform clearing prices, all committed resources receive the same clearing price once the cap is reached. That structure is designed to attract new investment under scarcity conditions, but it also magnifies cost impacts. Higher capacity prices will flow through to utilities and, ultimately, end customers, raising concerns about near-term bill increases for residential, commercial, and industrial users across the region.

The auction outcome also sharpens scrutiny around market design and planning assumptions. Clearing at the price cap while still missing the reliability target underscores the limits of price signals alone in resolving supply constraints. Transmission bottlenecks, interconnection backlogs, and permitting timelines remain binding constraints, even as economic incentives rise. Policymakers and regulators are increasingly focused on whether large new loads are appropriately aligned with system planning and cost allocation mechanisms.