PJM Interconnection Secures Over 134,000 MW Through Recent Auction for Future Demand

PJM Interconnection Procures 134,479 MW of Capacity in Latest Auction

On December 17, 2025, PJM Interconnection announced the results of its 2027/2028 Base Residual Auction (BRA), revealing a significant procurement of 134,479 megawatts (MW) of unforced capacity (UCAP) and demand response (DR) to support over 67 million electricity consumers across 13 states and the District of Columbia. This procurement is crucial considering the continuous growth in electricity demand, particularly attributed to the rising needs of data centers.

In total, regions operating under the Fixed Resource Requirement (FRR) secured an additional 11,299 MW in UCAP, bringing the total to 145,777 MW available at peak demand periods, which includes a reserve margin. The auction cleared at the FERC-approved cap price of $333.44 per MW/day, marking a slight increase of 1.3% from the previous year's auction. While this total clearing indicates healthy bidding, it falls short of PJM's reliability standards by 6,623 MW, which is of concern regarding the system's ability to maintain reliability amid peak demand.

The ongoing trend highlights a demand surge particularly from data centers, which has seen an increase of about 5,100 MW in demand in comparison to the prior auction. The Continuous monitoring and adaptation of supply capabilities are essential as PJM recognizes that electricity needs are soaring, especially from large consumers like data centers. PJM's Executive Vice President Market Services and Strategy, Stu Bresler, noted the increasing challenges stated, "the demand for electricity continues to outpace the new supply, necessitating collective action involving PJM, stakeholders, and the data center industry."

Among the highlights of the results, natural gas generation resources accounted for 43% of the cleared capacity, followed by 21% nuclear, 20% coal, and smaller percentages from renewable sources. Notably, the auction displayed a remarkable increase in demand response from 5,531 MW to 7,299 MW due to an upsurge in its Effective Load Carrying Capability (ELCC) rating.

For the 2027/2028 delivery period, PJM's auction results indicated a proactive approach to handling potential supply-demand discrepancies by continuously re-evaluating demand forecasts and resource capabilities. Several factors could improve the reliability landscape, including potential ongoing operation of generators previously set to retire and the possibility of winter-only resources becoming available for the grid.

Looking ahead, PJM is set to conduct an Incremental Auction in February 2027, which aims to add another layer of securing necessary capacity to meet looming demands. The availability of resources, alongside enhancements in PJM's interconnection processes, is a vital focus as the organization seeks to balance evolving energy demands with supply strategies effectively.

Furthermore, the auction results underline the significance of recent market rule changes intended to stabilize capacity pricing and enhance system reliability. These adjustments include implementing a cap and floor to manage bids systematically and ensure a steady supply through various resources. PJM has welcomed innovations that streamline interconnection processes, including collaborations like its partnership with Google/Tapestry, aiming to leverage artificial intelligence to enhance efficiency in examining new generation requests.

In conclusion, the outcome of PJM's recent auction not only reflects the ongoing dynamics of energy supply and demand but also highlights the critical need for continued collaborative efforts among stakeholders in addressing future energy requirements. As PJM gears towards its next Base Residual Auction scheduled for June 2026, its members remain committed to maintaining the integrity and reliability of the electricity system catering to millions of consumers across the region.