As of April 21, 2025, the Federal Energy Regulatory Commission approved the PJM Interconnection’s proposal to set a price cap and price floor for its next two capacity auctions. [1] This is despite facing opposition from the grid operator’s market monitor LS Power and others. In a 4-0 decision, FERC stated that current market conditions in PJM support a time-limited collar on the capacity market price for two delivery years. [2] The proposal of a $325/MW-day price cap and $175/MW-day floor for its 2026/27 and 2027/28 delivery year base capacity auctions came out of settlement discussions with Pennsylvania Gov. Josh Shapiro. [3] Shapiro filed a complaint at FERC in December seeking to lower the auction’s price cap. Without the collar, the price cap for the next capacity auction in July would have been $500/MW-day and the floor would have been zero dollars. FERC said the proposal represents a balanced approach that addresses past issues with delays by improving short-term cost certainty for electricity consumers and revenue certainty for capacity resource owners. In the meantime, PJM plans to revise key inputs into its capacity price settling process eventually and implement interconnection queue process reforms according to FERC.
[3] https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20250421-3069&optimized=false