Last year’s electricity capacity auction covering supply for New Jersey and 12 other states saw a record total capacity price and led to double-digit increases in customers’ bills beginning this June.
This year’s auction, held this month by PJM Interconnection, the grid operator for those states, saw that record price jump by $1.4 billion.
The exact effect of the latest auction on consumers’ bills next June 1 is not yet known, but it’s likely there will be another increase. The annual auction’s effects are not felt until the following year.
PJM, which serves more than 65 million people, conducts its auction each July to secure power in advance for the next delivery year, in this case 2026-2027. The delivery year begins June 1.
This month’s auction secured 134.3 megawatts of capacity at a price per megawatt-day that hit the price cap installed for this auction. The $329.17 per megawatt-day price for 2026-2027 is 22% higher than the $269.97 megawatt-day price after last year’s auction.
The total capacity price for PJM’s coverage area last year jumped from $2.2 billion to $14.7 billion in one year. That set alarm bells off in statehouses across the PJM member states. Legal action led by Pennsylvania Gov. Josh Shapiro led to the establishment of a price cap for this auction.
This year’s price surged until it hit the cap, raising the total capacity cost from $14.7 billion to $16.1 billion.
After the auction results were announced, investors in two large power generating companies were immediately bullish. The stock of Consolidated Energy rose 4.6%, and that of Vistra Corp. rose 6% after hours on the news.
