Every year, PJM, the grid operator serving 67+ million people across 13 states and Washington, D.C., runs a capacity auction. What clears in these auctions eventually shows up in your monthly electricity cost, usually as the capacity charge on your bill.

Context from last year:

The 2028/29 auction cleared at $325/MW-day UCAP, the FERC-approved cap, and for the second straight year fell short of PJM’s reliability requirement, the amount of capacity needed to cover peak demand plus a safety margin. That follows the 2025/26 shock, when prices jumped nearly tenfold from under $30 to $269.92/MW-day, and the 2027/28 auction that cleared at the cap of $333.44. Three straight years of elevated prices have held total capacity costs at $16.4 billion and kept real pressure on commercial and industrial energy budgets.

This year’s result:

• On July 14, 2026, PJM released its 2028/2029 Base Residual Auction results, covering the delivery year that runs from June 2028 through May 2029.
• Prices cleared at $325.00/MW-day UCAP. That’s still the FERC-approved cap, but it came in 2.5% below last year, the first decline since prices started climbing.
• The auction procured 138,318 MW, and with FRR commitments, total available capacity reached 149,182 MW UCAP.
• Total capacity costs held steady at $16.4 billion, unchanged from the prior auction.

What moved the market:

One rule is worth watching, and the chart above shows why. PJM’s cleared reserve margin has now fallen below the 20% reliability standard two years running, dropping to 14.9% in 2027/28 and 14.7% in 2028/29 after sitting well above the line just a few years earlier. Much of that slide traces back to AI. The rush to build data centers is pushing electricity demand up faster than new plants can come online, which forces PJM to secure more capacity and pulls the reserve margin down, exactly the drop the last two bars show. The scale is hard to miss: PJM’s independent market monitor estimates data centers accounted for $6.3 billion, or 38%, of the $16.4 billion in charges from this auction, and nearly half of all charges across the last four. A third straight miss would automatically trigger a backstop auction, sending PJM out to buy extra power on its own, a sign of just how thin demand has stretched the system.

Customer impact and timing:

Here’s the practical takeaway. The 2.5% dip is modest relief, and these 2028/2029 costs start flowing into retail supply in June 2028. But the story is direction, not this one-year move. The price fell only because the cap held it down. Underneath, the market wants to clear much higher, at $554 and up, demand keeps outrunning supply, and PJM is a year away from an emergency backstop auction. Whenever the cap-and-floor collar expires, the pressure it’s masking could surface fast.

Think of capacity costs as a pie. Your share stays the same, but when the pie grows, your slice costs more. This year the pie held roughly steady, and even shrank a hair, but every underlying signal says the oven is still running hot.

What You Can Do:

 Capacity costs are locked in years before delivery, so the smartest energy decisions get made ahead of the curve, not after the bill arrives. That’s where Sunlight Energy Group comes in. We help businesses like yours stay in front of these shifts, from timing your procurement to tapping demand response programs that turn a tight market into an opportunity. Reach out today and let us build the right strategy for your energy future.

SOURCES CITED

1. PJM Interconnection. 2028/2029 Base Residual Auction Report. July 14, 2026. Available at pjm.com (Markets & Operations – RPM auction info).
2. U.S. Department of Energy / Lawrence Berkeley National Laboratory. 2024 Report on U.S. Data Center Energy Use. December 2024. energy.gov; eta.lbl.gov.
3. Monitoring Analytics (PJM Independent Market Monitor), as reported in Utility Dive, Data centers drove $6.3B in PJM capacity auction costs: market monitor. July 20, 2026. utilitydive.com.