Short of the Reliability Requirement: PJM's 2028/2029 Capacity Auction

On July 14, 2026, PJM, the grid operator, announced the results of its 2028/2029 Base Residual Auction. The auction, its release says, "secured 138,318 MW of unforced capacity generation (UCAP) and demand response to meet projected electricity needs for more than 67 million people across 13 states and the District of Columbia."

The release defines its unit. UCAP "represents a generation resource's maximum output adjusted for its estimated ability to reliably perform at times of highest system risk."

At the Cap

"The price came in at the FERC-approved cap, $325/MW-day (UCAP) for the entire PJM footprint, a 2.5% decrease from the 2027/2028 Base Residual Auction cap of $333.44/MW-day."

On the cap, the release says PJM established a price cap and floor, "or collar, for four capacity auctions." "This was the third consecutive auction with the price collar."

The release then gives a dollar figure. "The cleared supply procured in the auction times the clearing price totals $16.4 billion. The total value does not equate to the total cost to load because load that is hedged through self-supply or bilateral contracts is not exposed to the clearing prices in the auction."

Resource Level Short of Standard

That heading is PJM's own. Under it: "The capacity of the resources procured in the auction, plus FRR resources, is short of PJM's reliability requirement by 6,831 MW, meaning that the committed supply is less than what would be required to meet the one-event-in-10-year reliability standard." FRR is the Fixed Resource Requirement.

The next paragraph: "This shortfall was not unexpected given the conditions PJM has been observing, including a shortfall of approximately 6,500 MW in the previous capacity auction (for the 2027/2028 Delivery Year). These most recent auctions were the first in PJM history in which the entire RTO fell short of the reliability requirement."

The release then says what a shortage means. "Such a shortage does not necessarily mean that the PJM system will be unable to serve load reliably in the delivery year; it means that PJM would have to operate with slimmer reserves and a greater level of risk. PJM continues to hold a reserve margin of 14.7% for the 2028/2029 Delivery Year."

PJM Working To Balance Supply/Demand

The release quotes PJM's president and CEO: "These auction results show that demand for electricity continues to grow faster than electricity supply."

After the quotation, the release adds: "While the price cap and floor may reduce volatility, they do not solve the underlying supply-demand imbalance. Addressing that challenge requires bringing more resources onto the system to meet the pace of demand growth."

From the release's auction statistics: "The auction cleared 525 MW UCAP of new generation and generation uprates." And on the forecast: "The RPM forecasted peak load for the 2028/2029 Delivery Year is approximately 2,000 MW higher than the forecast used for the 2027/2028 capacity auction."

The statistics also say: "This auction also saw the continued trend of the addition of large data center loads to the load forecast that forms the basis of the reliability requirement."

Among the actions PJM lists is developing frameworks "that allow large new loads, such as data centers, to connect to the system but operate flexibly when needed to limit disruptions to other consumers." Another is "planning a Reliability Backstop Procurement to address near-term reliability needs and allocate the costs consistent with state preferences."

Near its end, the release gives the next date. "The next Base Residual Auction, which is for the 2029/2030 Delivery Year, is scheduled for December as PJM works toward returning to its three-year-forward planning cycle."