PJM Capacity Prices for 2028/2029: What a $325/MW-Day Cap Means for Manufacturers

On July 14, PJM's auction for the 2028/2029 delivery year cleared at $325 per MW-day, the FERC-approved cap, across the entire footprint. It procured 138,318 MW, which is 6,831 MW short of the reliability requirement, at a total cost of $16.4 billion. OPIS reports it is the third time the auction has cleared at the cap.

What $325/MW-day means on a plant's meter

$325 per MW-day times 365 days is $118,625 per MW-year. A facility carrying 2 MW of capacity obligation is looking at roughly $237,000 a year at the auction price. Your actual figure will differ with scaling factors, supplier margin and how your contract passes capacity through, but the order of magnitude is right.

Your obligation is set by a few hours

In PJM, the capacity obligation is driven by your load during a handful of the system's highest-demand summer hours, set from the prior summer. Most energy conversations focus on the energy price. Very few focus on those hours.

What acting on it is worth

Cut 10 percent of a 2 MW load during the peak hours and the obligation drops by 0.2 MW. At $118,625 per MW-year, that is about $23,700 a year, with no capital project required if the load can actually move: a chiller schedule, a compressor, a batch process, a charging window.

The hard part is knowing which days are the peak days. You only know afterward, so the practical approach is forecasting the likely peak days and having a response plan ready for each one. Demand response was about 5 percent of the supply PJM procured in this auction, which tells you the market already values this flexibility. Most plants are simply not participating.

This applies to PJM. Other regions price capacity and peak load through different mechanisms, so check your own market before copying the playbook.

Sources: PJM: 2028/2029 capacity auction results (July 14, 2026) · OPIS: PJM's 2028/2029 auction clears at price cap for third time