Understanding the 2026/27 PJM BRA Capacity Auction Results
3 min readPJM Interconnection, L.L.C., the Regional Transmission Organization (RTO) representing a large portion of the eastern United States, announced the results of its Base Residual Auction (BRA) for capacity on July 22, 2025. The auction secured 134,311 MW of unforced capacity (UCAP) and demand response to meet projected electricity needs for more than 67 million people across the PJM region. Capacity prices hit the cap price of $329.17 MW/day for 2026/27, a 22% increase from the prior auction results for the RTO zones for 2025/26 which already represented an almost 800% increase compared to 2024/25 results for RTO. Understanding these results and properly planning for peak demand periods can help energy managers to manage costs and make informed energy decisions.
As a reminder, customers pay not only for the energy they consume, but also for energy that needs to be available to serve their account(s) and the grid based on their usage or demand during peak hours when the grid is most constrained. This typically materializes in the form of a capacity cost, which can make up to 30% or more of a customer’s power supply charges.*
What is the PJM Base Residual Auction (BRA)?
The PJM BRA is typically held annually three years in advance of the Delivery Year (though this has not been the case in the recent past due to auction delays) and secures commitments from electricity suppliers to provide capacity to meet the forecasted demand for electricity in the PJM region. Owners of existing fossil and renewable resources are required to offer their capacity for a one-year term, traditionally three years in advance. This process is designed to procure enough supply-side or load-management capacity to meet peak demand, maintaining a stable and reliable supply for customers.
Forecasted Demand
Peak load for the 2026/2027 BRA increased year over year by more than 5,400 MW, largely driven by data center expansion, electrification and economic growth in the area. PJM secured 134,311 MW (UCAP) and demand response to meet projected electricity needs, with 135,192 MW offered-in, a decline in offers of 501 MW (UCAP) from last year. This cleared volume was just over the projected reliability requirement. Gas-fired generation accounted for 45% of the cleared capacity, followed by nuclear at 21%, coal at 22%, hydroelectric at 4%, wind at 3% and solar at 1%, according to PJM. Demand response offered in the auction was essentially flat from the previous year at 8,010 MW.
Options Available to Businesses
The less energy a business uses during peak-setting hours when the system is most constrained, the lower their capacity costs can be. If businesses can effectively reduce their consumption during a few peak hours in the summer, they may be able to reap significant savings in future capacity costs. For example, a 1 MW reduction in a customer’s capacity obligation in PJM for planning year June 2025 to June 2026 for a customer who pays for capacity on a fully passed-through basis, would have resulted in savings of almost $100,000 over that period in RTO zones like ComEd, PECO, MetEd, etc. Other zones like BGE would have seen even higher savings in this example.* Additional opportunities for savings or revenues are available through various energy optimization services and programs.
As the demand for energy grows and costs increase, businesses need flexible solutions that reduce strain on the grid while delivering financial and operational value. Constellation’s Energy Optimization services, which include options powered by GridBeyond’s intelligent energy platform, can help businesses find opportunities to reduce costs, earn revenue and support grid resiliency through strategic load response programs.
Constellation has a variety of tailored strategies including solutions that use machine learning to analyze equipment and market data, identifying the optimal times to curtail. These strategies can provide cost-effective ways to reduce peak demand, avoid new generation costs and improve grid efficiency, while minimizing operational impacts:
- Peak Response: Reduces demand-based charges, such as capacity and transmission costs, by curtailing your load when Constellation notifies of peak demand hours on the grid.
- Demand Response: Can enable businesses to generate revenue through participation in load response programs offered by grid operators.
Backed by predictive analytics and automation, we offer programs designed to maximize value and efficiency, helping businesses tailor their energy strategies to meet their unique operational or sustainability needs without compromising performance. To learn more about the changing energy landscape or about solutions we offer, contact your Constellation representative or subscribe at https://constellation.com/subscribe.
*Costs and potential savings will vary by customer based on various factors such as load profile, ISO, product, and term.
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