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PJM Publishes 2027/2028 Base Residual Auction Report
From the Executive Summary of the PJM – 2027/2028 Base Residual Auction Report:
“The 2027/2028 Reliability Pricing Model (RPM) Base Residual Auction (BRA) cleared 134,478.1 MW of Unforced Capacity (UCAP) in the RTO from annual, summer-period and winter-period matched resources. 809.6 MW of UCAP did not clear because the offer prices were above the temporary price cap of $333.44 $/MW-day UCAP. A price cap below that, which is established for the VRR Curve, can reduce the amount of investment and therefore supply in the PJM region. Fixed Resource Requirement (FRR) committed 11,299 MW UCAP, which resulted in total procured capacity in the RTO of 145,777.1 MW UCAP or 6,623.2 MW UCAP below the RTO Reliability Requirement.”
“RPM cleared 14.8% Installed Reserve Margin (IRM) or 5.2 percentage points below the 20% IRM. The IRM is the reserve margin determined to be necessary to maintain a one-day-in-10-year Loss of Load Expectation (LOLE). Per OATT Attachment DD, Section 16, a shortfall of greater than one percentage point triggers an investigation into the cause of the shortage. Further, if a shortfall of greater than one percentage point continues for two additional BRAs, this will trigger a Reliability Backstop Auction. If a Reliability Backstop Auction is warranted, the Tariff requires that PJM make a filing with FERC prior to its execution.”
“PJM will also review if the amount of Base Load Generation Resources committed in the BRA is less than the forecasted minimum hourly load and investigate accordingly. If the amount of Base Load Generation Resources committed is less than the forecast minimum hourly load in three consecutive BRAs, then this will also trigger a Reliability Backstop Auction. To date, this condition has never occurred. PJM will publish the results of this comparison in a separate file on PJM.com after the auction results have been posted.”
“Supply offered into the RPM capacity market increased 955.8 MW (UCAP) from 135,191.8 MW in the 2026/2027 BRA to 136,147.6 MW in the 2027/2028 BRA. The total amount of new generation and generation uprate was 774 MW UCAP. The number of constrained LDAs remained at zero in the 2027/2028 BRA since the total amount cleared was less than the RTO Reliability Requirement. The total amount of capacity in RPM that cleared increased by 370.6 MW from 134,376.1 MW in the 2026/2027 BRA to 134,746.7 MW in the 2027/2028 BRA.”
“The RTO as a whole failed the Market Structure Test (i.e., the Three-Pivotal Supplier Test), resulting in the application of market power mitigation to all Existing Generation Capacity Resources. Mitigation was applied to a supplier’s existing generation resources, resulting in utilizing the lesser of the supplier’s approved Market Seller Offer Cap for such resource or the supplier’s submitted offer price for such resource in the RPM Auction clearing.””
Table 1 summarizes the prices ($/MW-day UCAP) from the previous BRA and this BRA. For the 2027/2028 BRA, all prices cleared at the cap ($333.44). In the 2026/2027 BRA, the RTO cleared at the price cap of $329.17.”
The following is a list of significant planning parameter and market rules changes that impacted the auction results:
Note key planning parameters changes [please see the Planning Parameters Report (PDF) for additional details], which include:
- RTO Reliability Requirement increase from 146,105 MW to 152,400 MW (UCAP)
- 5,249.9 MW increase in forecasted load, largely due to additional Large Loads
- IRM increased from 19.1% to 20.0%
- FPR increased from 0.917 to 0.926
- Implemented a cap of $256.75 $/MW-ICAP ($333.44 $/MW-UCAP) and a floor of $138.25 $/MW-ICAP ($179.55 $/MW-UCAP) to the VRR Curve. 2 This cap and floor were in effect for the 2026/2027 and 2027/2028 BRAs. All offers below the floor were cleared, and all offers above the cap were not cleared.
- PJM submitted $0 offers for specific Reliability Must-Run units and will allocate the revenue as a credit to the associated load.
- Required Demand Response (DR) availability increased to all hours in the year, and the calculation of the winter peak load was updated to a coincident value. This was a major driver to an increase of the ELCC value for DR from 69% in the 2026/2027 BRA to 92% in the 2027/2028 BRA.
- The Chanceford-Doubs 500 kV backbone transmission line was delayed, which significantly impacted MAAC, SWMAAC and DOM CETLs.
