PJM Interconnection’s 2027/2028 Base Residual Auction, conducted in December 2025, secured 134,479 megawatts of unforced capacity from generation and demand response resources to meet projected needs for more than 67 million people across 13 states and the District of Columbia. The auction cleared at the FERC-approved price cap of $333.44 per megawatt-day, a 1.3 percent increase from the prior auction, and fell short of the reliability requirement by 6,623 megawatts when including Fixed Resource Requirement resources.
The results, announced December 17, 2025, reflect a persistent supply-demand imbalance driven primarily by rapid load growth from data centers and artificial intelligence applications. PJM’s peak load forecast for the 2027/2028 delivery year, running from June 1, 2027, to May 31, 2028, rose by approximately 5,250 megawatts compared to the previous auction, with nearly 5,100 megawatts of that increase attributed to data center demand.
Stu Bresler, PJM’s incoming chief operating officer, addressed the outcome. “This auction leaves no doubt that data centers’ demand for electricity continues to far outstrip new supply, and the solution will require concerted action involving PJM, its stakeholders, state and federal partners, and the data center industry itself,” Bresler said. He added that mitigating factors, including potential reductions in forecasted peak demand, delayed generator retirements, and availability of winter-only resources, could bring the system close to the one-in-10-year reliability standard during the delivery year. PJM plans an Incremental Auction in February 2027 to add further capacity.
The cleared resource mix consisted of 43 percent natural gas, 21 percent nuclear, 20 percent coal, 5 percent demand response, 4 percent hydro, 2 percent wind, 2 percent oil, and 1 percent solar. The auction procured 774 megawatts of new generation and uprates, while total offered supply increased modestly from the prior auction.
A joint statement from the Electric Power Supply Association and PJM Power Providers Group highlighted the shift from record-low supply prices in the previous decade. They emphasized the need to remove non-market barriers such as permitting and siting delays, address supply chain constraints, and provide regulatory certainty to accelerate resource development.
In Pennsylvania, Governor Josh Shapiro reiterated his efforts to curb price increases through a complaint to the Federal Energy Regulatory Commission that led to the current cap. “I sued PJM because it is unacceptable for them to do nothing as consumers pay sky-high utility bills while getting nothing in return,” Shapiro said. “My Administration has once again stopped billions of dollars in unnecessary and unjustified energy price hikes from being passed on to families and businesses.” Shapiro has advocated for building more generation in Pennsylvania and warned of potential withdrawal from PJM if reforms do not advance, though such a move would mark an unprecedented change for the grid operator.
Senator Gene Yaw, Republican chair of the Pennsylvania Senate Environmental Resources and Energy Committee, described Shapiro’s threats as “impressive” and “misguided.” He attributed rising prices to policy decisions favoring renewables that led to premature retirements of baseload generation without adequate replacements. “The real reason electricity prices are rising is because we’re not producing enough of it,” Yaw said. “Making PJM the boogeyman is good short-term politics. Artificially and temporarily capping electric rates stifles new generation and sends the message: don’t build in the PJM grid.”
For Southern Maryland residents served by utilities such as Southern Maryland Electric Cooperative and Pepco in the PJM region, these capacity results contribute to the cost component of retail electricity bills. Capacity charges form a portion of supply costs, and higher auction prices typically translate to upward pressure on rates, though the exact impact depends on utility rate structures and state oversight. The region, including Calvert, Charles, and St. Mary’s counties, relies on the PJM grid for reliable power amid growing demand from residential, commercial, and data center developments.
PJM continues interconnection reforms to process queued projects, with more than 170,000 megawatts reviewed since 2023 and about 57 gigawatts securing agreements or studies. However, many projects face external hurdles like permitting and financing. The auction underscores the challenge of aligning supply additions with explosive load growth, particularly from data centers, while maintaining grid reliability.