PJM 2026/27 Auction Results
2026/27 PJM capacity auction results cleared at $329.17/MW-day, a 22% increase over last year’s record-breaking results. The 10-fold spike in prices from the 2024/25 delivery year is a result of a myriad of market forces including:
- Increased demand from AI-driven data center growth
- Retirement of older, fossil fuel plants
- Supply and demand gap from long interconnection queues for new generation
Experts say that prices would have cleared at $389/MW-day if FERC’s PJM capacity cap and floor price mechanism had not been instituted earlier this year. Here is a price comparison of PJM capacity rates over the last three delivery years:
What This Means for Commercial Energy Customers
Capacity costs make up approximately 30% of your electricity supply costs. When these rates go up as a result of base residual auctions between generators in the wholesale market, so does your electricity bill. Average commercial electricity customers have experienced a 1.5¢ per kWh increase in costs from the 2024/25 delivery year to the 2025/26 delivery year. They can now expect those costs to increase again by approximately 20% in the future years.
If you are thinking about entering into a new electricity supply agreement before June 1, 2026, then you need to consider all contract provisions associated with capacity costs. Comfort Profit Consulting helps out customers navigate these complex situations with ease, ultimately reducing electricity costs. Read on to learn more about our solutions.
How Comfort Profit Can Help
Dan Comfort of Comfort Profit Consulting has been in business for over 26 years, helping large commercial and industrial customers reduce expenses. Dan was at the forefront of energy deregulation in the PJM markets and understands electricity supply contract terms in detail. Here are some of the ways we can help you avoid higher energy costs:
Reduce Peak Demand
Capacity rates in PJM are billed based on a customer’s peak demand each summer season. This is how you will be charged for capacity:
- Summer 2025 peak demand = 1,000 kWh (or 1 MW)
- 2026/27 capacity rate = $329.17/MW-day
- June 1, 2026 – May 31, 2027 capacity costs = $120,147.05
Customers who can reduce peak demand in the summer months can drastically reduce their capacity expenses for the next calendar year. Since summer 2025 will dictate your capacity costs from June 1, 2026 – May 31, 2027, then it is highly recommended that you try to reduce your peak demand this summer.
Comfort Profit Consulting can give you real time alerts when the PJM grid will be monitoring usage for peak demand ratings. Contact us to enroll in this program.
Negotiate Smarter Electricity Contracts
One of the ways we help is by making sure your electricity contract is set up in your favor. A lot of businesses sign fixed-rate contracts that lock in capacity costs, even if they later take steps to use less power. But since capacity charges are based on your peak energy use, if you plan to cut back through energy efficiency or peak-shaving strategies, you shouldn’t be stuck paying a flat, bundled rate. Instead, we help you set up a contract that allows you to benefit from any reductions you make, so you can actually see the savings when your demand goes down.
Evaluate Capacity Clauses
Many third-party energy suppliers have contract clauses that allow them to adjust retail electricity rates based on increased capacity prices. It is important to evaluate these clauses prior to signing a contract to ensure that you understand your potential costs. For example, if a supplier is offering a lower-than-average rate for a fixed contract through next year’s capacity calendar, be sure to ask if they have accounted for these new PJM capacity rates. If they have not, you might get shocked next year when your bill goes up unexpectedly.
Contact Us To Reduce Your Energy Costs
With PJM capacity rates on the rise, businesses can’t afford to sit back. Comfort Profit Consulting will help you identify risks in your current electricity agreement and design a forward-thinking strategy to reduce costs and stay competitive.
Comfort Profit Consulting
Dan Comfort
(570) 336-0197
comfortprofit@gmail.com
