Later tonight, PJM Interconnection (PJM) will release the results of its annual power capacity auction—and once again, 65 million consumers are bracing for the worst. Despite widespread backlash over last year’s sky-high prices, PJM has done little to fix the broken system that caused them. With fossil fuel interests still calling the shots, clean energy still sidelined, and demand projections still inflated beyond reason, the stage is set for another expensive and avoidable energy price hike. 

The outlook for this year’s auction is grim. PJM has spent the past year ignoring calls for reform from governors, advocates, and businesses while propping up an outdated, unreliable system. Unless something dramatically shifts, tonight’s results won’t just reflect poor planning—they’ll show a grid operator doubling down on failure at the direct expense of the families and businesses footing the bill. 

Who is PJM?

PJM Interconnection LLC (PJM) is the largest regional transmission organization in the U.S., responsible for operating the electric grid for 65 million Americans across 13 mid-Atlantic states and D.C. It oversees how power moves from generation to homes and businesses, and it runs energy auctions that help set electricity prices years in advance. 

But PJM is failing at its core mission—connecting new, affordable energy to the grid. 

PJM has dragged its feet on installing new solar and wind energy, which is the fastest and cheapest energy to build—cheaper even without federal tax credits. For years, PJM paused approvals for most new projects, leaving over 3,000 clean energy and storage proposals—95 percent of PJM’s waitlist—stuck in a broken queue. On average, projects are waiting more than five years just to get approval, the longest delays of any grid operator in the U.S. 

The result? A supply shortfall that has driven up auction prices and spiked electricity bills by up to 30 percent just this month. But instead of fixing the backlog, PJM is sidelining clean alternatives and prioritizing gas plants that are more expensive, slower to add to the grid—because of longer construction timelines and back orders of gas turbines, and increasingly unreliable in extreme weather events. 

According to modeling from Synapse Energy Economics, reforming PJM’s broken approval process would deliver major, tangible benefits across the Mid-Atlantic, including:

• $505 in average household energy savings each year
• 313,000 additional jobs created each year across the PJM region 
• 23 percent lower electricity costs for industrial and commercial customers

This is not just inefficiency; it’s a systemic failure caused by fossil fuel and utility influence inside PJM’s decision-making structure. As a private LLC with thousands of voting members, primarily composed of energy companies and utilities, PJM’s governance system has allowed entrenched interests to block reforms and profit from artificial scarcity and high prices. All while PJM has increased the salaries that it pays to its executives by over 100% over the past five years, and its member monopoly utilities rake in record profits. 

What is the Capacity Auction—and Why Does It Matter?

Every year, PJM holds a capacity auction to ensure there’s enough backup power to meet demand in future years. It’s essentially an insurance policy for the grid by paying generators and other energy resources to be on standby for peak usage days. 

Here’s how it works: 

• PJM calculates how much electricity capacity will be needed during future high-demand days, and adds an additional “reserve margin.” 
• Power providers bid to offer that capacity. 
• PJM accepts the lowest bids first until it meets its target. The final accepted bid sets the “clearing price,” which all winning bidders are paid regardless of their original offers. 
• These capacity payments are paid directly by customers through their utility bills, whether the capacity is actually needed or not. 

Last year’s capacity auction marked a dramatic and unprecedented increase in costs, with prices surging tenfold—from $28.92 to $269.92 per megawatt-day. For millions of consumers,  what was intended as a safeguard for reliable power became a significant financial burden. 

This steep price escalation highlighted fundamental flaws in PJM’s auction design. By consistently overestimating demand and prioritizing fossil fuels over ready and cheaper clean energy, PJM’s auction process drives up costs without improving reliability. And because PJM’s process for approving new clean energy projects is so broken, higher prices are not leading to new supply coming online, and prices aren’t coming back down. Despite increasing scrutiny and public concern, PJM continues to defend a system that prioritizes the interests of energy producers over those of consumers. Without meaningful reform, tonight’s auction risks repeating this costly and unsustainable pattern. 

What to Look for in Tonight’s Results 

Last year’s auction was a clear warning—yet PJM has done little to fast-track clean energy approval and development. Over 3,000 clean energy projects remain stuck in PJM’s interconnection backlog while fossil fuel plants continue to dominate the grid planning process. Unless PJM dramatically shifts course, tonight’s results are likely to reflect the worst-case scenario for consumers: higher prices, limited competition, and rising dependence on expensive, unreliable, and aging infrastructure. 

What to watch: 

• Price cap: In response to a complaint earlier this year from Pennsylvania Gov. Josh Shapiro, PJM agreed to set a price ceiling of $325 per megawatt-day to protect ratepayers from runaway auction prices. But PJM will likely push prices right up to that cap, because using inflated demand estimates and blocking clean energy pushes prices—and profits—sky high. 
• Data center demand inflation: Explosive growth in artificial intelligence and digital infrastructure has prompted utilities to forecast new electricity needs. But with no standardized method for forecasting data center demand, utilities can inflate future usage or even count speculative projects with no firm commitments. The result? Overestimated demand, which drives up how much capacity PJM needs to buy and the market price that consumers will ultimately pay. 
• Overvaluing unreliable fossil fuels: PJM continues to treat gas-fired power plants as dependable in its auctions—despite repeatedly failing during extreme weather. As a result, consumers will be forced to overpay for “reliability” that may not show up when they need it most, while cleaner, more resilient energy options like battery storage are left waiting in the backlog.  
• (Limited) clean energy participation: For the first time, PJM is requiring online renewable and battery projects to bid into the auction to help increase competition. However—the vast majority of clean energy projects are still sidelined and waiting for PJM approval. So while PJM gets to claim they “included” clean energy, consumers will still be left paying for more expensive energy while new clean energy projects remain in limbo. 

The Bottom Line 

As PJM prepares to release its capacity auction results tonight, the stakes couldn’t be higher for consumers. Years of delay and price gouging have left the grid over-reliant on expensive, unreliable fossil fuels—all while thousands of cheaper, more resilient clean energy projects languish in the backlog. Rather than challenge the profit margins of its utility members or allow fair competition from clean energy, PJM continues to prop up the status quo, delivering higher bills and fewer options for families and businesses across the region. To protect consumers and lower costs, PJM must break this cycle and bring low-cost clean energy onto the grid at the speed and scale this moment demands. Another year of delay is not an option.