PJM, the regulatory body that oversees the electricity grid for a 13-state region from Illinois to New Jersey, and the largest ISO in the U.S., announced that capacity prices starting June 2025 are increasing up to 833%! This is now in effect. PJM also announced that 2026/2027 prices will increase a further 22% making 2026 capacity up to 1,038% higher compared to 2024.
The states affected include: New Jersey, Pennsylvania, Delaware, Maryland, DC, Virginia, North Carolina, West Virginia, Ohio, Kentucky, Tennessee, Indiana, Michigan, and Illinois. See map below for areas included. 
These are regulatory changes. In the 2024/2025 capacity cycle, the predominant capacity auction pricing was between $28.92 and $70.00 per MW-Day. Now, the prices that cleared the auction for the 2025/2026 cycle range from $269.92 to $466.35! See map below for PJM territory.
Using most of PJM as an example, if your peak kW demand registers at these figures, expect these increases for the June 2025 through May 2026 period…
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It’s the responsibility of PJM to manage the various generation assets on the grid to maintain stability and power. In December 2022, Winter Storm Elliott tested the grid with a record-breaking temperature drop. Several committed generation assets were unable to fire which put the system into a vulnerable position, risking a region-wide blackout. Links provided below to PJM’s report and more news on the matter.
Generators supplying power to the PJM power grid get paid two ways. They are paid for the electricity they create which is used by the public. And they are also paid for maintaining a certain level of power availability whenever demanded, commonly known as capacity. An auction is held, normally 3-years in advance whereby generators bid into a pool for the capacity they choose to offer at a price they hope clears. Factors such as growth in AI data centers, premature hydrocarbon plant closures, and regulatory delays are all contributing to these price increases.
PJM: Official Publication
Utility Dive: News Article
Bloomberg: News Article (Subscr)
Reuters: News Article
Enel: News Article
S&P Global: News Article
Sierra Club: News Article
Power Engineering: News Article
Q: Who does this affect?
A: All 65 million ratepayers in PJM, including businesses.
Q: How much is my bill going up?
A: It varies by utility company. We can help you assess.
Q: When did this take effect?
A: June of 2025. New prices take effect each June.
We and our in-house partners have been in the energy business since 1998. Large national chains rely on us to assist them in making informed decisions. Local businesses depend on us to help them save and budget. Contact us for a complimentary no-obligation consultation to find out where you stand and how we may be able to help.
