Why This Auction Matters for Commercial Buyers
The PRA clearing price is the single most important forward indicator for Midwest commercial electricity costs. Unlike PJM’s 3-year forward auction, MISO’s annual auction directly sets the capacity charge for the upcoming June 1 – May 31 planning year. The clearing price flows through as a per-MW charge on every commercial customer’s bill within 60 days.
Historical Context: The 2025/26 Wake-Up Call
The 2025/26 PRA cleared at $72.94/MW-day in MISO Zone 4 (Illinois/Indiana) — a 340% increase from the previous year’s $16.75. That $72.94 figure translated to roughly $0.50–$0.80/MWh added to capacity charges for large commercial customers, with some aggregated municipal programs seeing total bill increases of 4–6%.
The 1.9 GW Gap: What the Pre-Auction Data Tells Us
MISO’s pre-auction publication shows:
- Accredited capacity: 135.6 GW (after applying seasonal accreditation and effective load-carrying capability adjustments)
- Reserve margin requirement: 137.5 GW (based on a 7.4% planning reserve margin)
- Resulting gap: 1.9 GW — enough to push clearing prices into the “elevated” range but not into shortage pricing territory
This 1.9 GW gap is smaller than last year’s 5.2 GW deficit, which suggests clearing prices may moderate slightly from the 2025/26 spike. However, several factors could push results higher:
Factor 1: Demand Response Verification Tightening
MISO now mandates actual performance verification tests instead of hypothetical mock drills for demand response resources. This rule change (effective March 2026) is expected to disqualify approximately 2–3 GW of previously accredited DR capacity that cannot demonstrate real curtailment capability. If this capacity drops out of the auction, the effective gap could widen to 4+ GW.
Factor 2: 24 GW Fast-Track Pipeline
MISO has now launched its 3rd ERAS fast-track interconnection cycle, totaling approximately 24 GW of expedited generation across all cycles. Natural gas projects lead the queue. While this pipeline is impressive on paper, most of this capacity won’t be online until 2027–2028, meaning it provides no relief for the 2026/27 auction.
Factor 3: Coal Retirement Acceleration
Coal generation in MISO hit a 3-year low in January 2026, with solar now accounting for 55% of incremental demand growth since 2023. Planned coal retirements in Indiana, Michigan, and Missouri will remove an additional 2.1 GW of accredited capacity by 2027, further tightening the system.
Clearing Price Scenarios
| Scenario | Clearing ($/MW-day) | Bill Impact | Probability |
|---|---|---|---|
| DR passes verification, gap holds at 1.9 GW | $45–$60 | Flat to +2% | 35% |
| DR losses widen gap to 3–4 GW | $65–$85 | +3–5% | 45% |
| Shortage pricing triggered (5+ GW gap) | $150+ | +6–10% | 20% |
What Midwest Commercial Buyers Should Do
- Budget for elevated capacity: Even the most optimistic scenario projects capacity costs above historical averages. Include a 3–5% capacity cost buffer in Q2–Q3 2026 budgets.
- Verify demand response eligibility: If you participate in MISO DR programs, ensure your facility can pass the new real testing requirements before the April 28 results date. Facilities that fail verification lose their capacity value — and revenue.
- Lock supply contracts before April 28: Retail energy suppliers will reprice commercial contracts immediately after PRA results are published. Locking supply terms now captures current pricing before the auction premium is embedded.
- Monitor zone-specific results: MISO publishes clearing prices by Local Resource Zone. Illinois (Zone 4) and Michigan (Zone 7) have historically cleared at premiums to the MISO-wide average due to local reliability constraints.
Timeline: Key Dates
- March 26–31: PRA offer window (submissions accepted)
- April 28: MISO publishes clearing prices by zone
- June 1: 2026/27 planning year begins — new capacity charges take effect
- September 2026: Updated CDR (Capacity, Demand & Reserves) report with 2027/28 data
Source: MISO PRA Pre-Auction Data Publication; MISO ERAS Fast-Track Cycle 3 Filing; EIA Electric Power Monthly; MISO CDR Report February 2026.