PJM capacity auction hits price cap as data-center demand widens reserve shortfall
PJM’s 2028-2029 capacity auction cleared at the $325/MW-day price cap, leaving about a 6.8 GW shortfall versus its 20% installed reserve margin (up from 6.5 GW), with only roughly 525 MW of new resources and nearly 2 GW of additional forecast demand driven by data centers. The grid operator plans a backstop capacity auction and a ‘connect and manage’ framework for data centers, with a filing due this month for a September auction. Without the cap, clearing prices would have run about $555/MW-day across PJM and $777/MW-day in the ComEd zone, implying about $29.7B in potential costs versus the actual $16.4B spent. Demand response fell by about 277 MW, and while ratepayers may see little bill change in 2028, large industrial customers could face sharply higher capacity charges. Analysts expect reforms to lower prices and address resource adequacy, while stakeholders debate data-center costs and permitting barriers.