PJM Auction Raises Capacity Prices, Spurs Political Clash

PJM Interconnection's latest capacity auction set a record price of $329.17 per megawatt-day for 2026/2027, a 22% increase likely to raise electricity bills by 1.5%–5% for customers in 13 states and Washington, D.C. This jump follows other significant hikes, with some states like New Jersey and Pennsylvania seeing rate increases up to 20% this year. The surge is attributed to rising demand from data centers and electrification, plant retirements, limited new generation, and slow deployment of clean energy. PJM and state energy policies are both drawing criticism for the cost increases. The issue has become politically charged ahead of elections, with Democrats blaming PJM's management and Republicans citing clean energy mandates. Reforms to the auction process and expedited new generation are being considered as consumers brace for persistently high bills.