What Happened: The 2026/2027 BRA Results
On July 22, 2025, PJM Interconnection released the results of its 2026/2027 Base Residual Auction (BRA). The auction secured 134,311 MW of unforced capacity (UCAP) through the competitive process, with an additional 11,933 MW committed through the Fixed Resource Requirement (FRR), totaling 146,244 MW — approximately 139 MW above the RTO Reliability Requirement.
The clearing price of $329.17/MW-day was uniform across the entire PJM footprint. Unlike the prior 2025/2026 auction, where constrained zones like BGE ($466.35) and Dominion ($444.26) separated from the Rest of RTO ($269.92), the 2026/2027 auction saw system-wide tightness that pushed the entire RTO to the FERC-approved price cap.
Why Prices Hit the Cap
- Demand Growth: PJM’s forecasted peak load increased by over 5,400 MW compared to the prior year, driven primarily by data center expansion in Northern Virginia, Ohio, and the Dallas–Fort Worth corridor spillover into the ComEd zone.
- Generation Retirements: Approximately 5,200 MW of coal and older gas-fired generation retired between the two auction cycles, with no equivalent firm replacement capacity coming online in time to clear.
- Tighter FERC Parameters: FERC approved revised auction parameters including a price floor and cap to moderate extreme volatility. The cap of $329.17/MW-day was binding for the first time.
Bill Impact: What This Costs Your Business
Capacity charges are a direct pass-through on commercial electricity bills. The capacity component is calculated based on your Peak Load Contribution (PLC) tag — your facility’s load during the peak hour of PJM’s summer system peak.
| Facility Size | PLC Tag | 2025/26 Cost | 2026/27 Cost | Increase |
|---|---|---|---|---|
| Small Office | 50 kW | $4,926 | $6,008 | +$1,082 |
| Mid-Size Facility | 500 kW | $49,260 | $60,075 | +$10,815 |
| Large Industrial | 5 MW | $492,604 | $600,746 | +$108,142 |
Calculation: PLC (MW) × clearing price ($/MW-day) × 365 days. Actual charges vary by zone, utility adjustment factors, and billing methodology.
How to Mitigate Capacity Cost Increases
- PLC Tag Management: Your capacity obligation is set by your 1CP (one coincident peak) contribution. By curtailing load during the predicted PJM summer peak hour (typically a July or August afternoon), you can reduce next year’s PLC tag significantly — potentially saving tens of thousands per MW shed.
- Demand Response Enrollment: PJM’s Economic and Emergency DR programs pay facilities to curtail during grid stress events. At $329.17/MW-day, a 1 MW curtailable facility earns approximately $120,148/year in capacity revenues (including performance bonus).
- Fixed vs. Index Contracts: Fixed-rate supply contracts negotiated before June 1 may still reflect the lower 2025/2026 capacity costs. After June 1, all new contracts will incorporate the $329.17 clearing price.
Connected Analysis
See how these capacity costs affect your state in our 2026 Commercial Rate Benchmark. For DR program details, visit our PJM Demand Response guide.
Source: PJM Interconnection, 2026/2027 BRA Results (published July 22, 2025); FERC Docket ER24-99; PJM Capacity Market documentation.