The Auction That Set Your 2028 Electric Bill

What a capacity auction is

Electricity has two prices. The one you think about is energy: the kilowatt-hours you use. The one you don't is capacity: paying generators to exist and be ready on the hottest afternoon of the year, whether or not they run. In PJM's territory (Pennsylvania, New Jersey, Maryland, Virginia, Ohio, Illinois's ComEd zone, D.C., and parts of seven other states), capacity is bought in a Base Residual Auction roughly three years before the "delivery year," which runs June 1 to May 31.

Generators bid the price at which they'll commit. PJM buys enough to hit a reliability target. Everyone who clears gets paid the clearing price, in dollars per megawatt of capacity per day. Utilities and retail suppliers pass that cost through to every customer in the zone, sized by each customer's share of peak demand. That is the entire mechanism. There's no villain in it. It's just a market that assumed demand would keep growing by a percent a year.

The receipts: five auctions

Why it broke: 32 gigawatts, 94% of it data centers

A capacity price is a scarcity signal. Three things tightened at once. Coal and older gas plants kept retiring on schedule. New supply got stuck in an interconnection queue that takes years to clear. And demand, flat for two decades, turned up hard: PJM's 2026 long-term forecast projects about 32 GW of peak-load growth between 2024 and 2030, and attributes roughly 94% of it to data centers. A hyperscale campus can be built in 18 to 24 months. A gas plant takes four to five years. The auction simply priced that gap.

PJM's own July 2026 release framed the result as "work continues to address growing electricity demand." Translated: the auction procured 138,318 MW, the reliability requirement wanted about 145,000, and the cap prevented the price from going any higher to close the difference.

The cap, and why the numbers wobble around $325

After the 2025/26 shock, Pennsylvania's governor sued and PJM settled: for the 2026/27 and 2027/28 auctions, prices would be collared between a floor of about $175 and a cap of about $325 per MW-day, adjusted each year for the way PJM counts "unforced" capacity. That's why the caps show up as $329.17 and $333.44 rather than a round $325. In April 2026, FERC approved extending the $325 cap for two more auctions, which is the number the 2028/29 auction hit. The cap protects your bill from the price the market wanted to set. It does not add a single megawatt of supply.

When each auction reaches your bill

Capacity charges are paid during the delivery year, so every auction result is a scheduled future bill increase. The timeline for a PJM household:

• June 20252025/26 result ($269.92) starts flowing through. Utilities across Maryland, New Jersey, Ohio and Pennsylvania announced supply-rate increases around this date; New Jersey's average bill rose about 20% in 2025.
• June 20262026/27 result ($329.17) takes over. The June 2026 EIA numbers already show Maryland, Virginia, Pennsylvania and Ohio near the top of the bill-increase ranking.
• June 20272027/28 result ($333.44). Essentially flat versus the prior year, so the increase is already baked in rather than new.
• June 20282028/29 result ($325). The Citizens Utility Board notes capacity is roughly 20% of the supply price ComEd customers pay, and that cost is about 50% higher than two years earlier. NRDC's projection, as reported by Canary Media, is that average PJM households could pay on the order of $70 a month more by 2028 than before the surge.

Two honest caveats. First, capacity is one line of a bill that also carries energy, transmission and distribution charges, and those move for reasons that have nothing to do with data centers. Second, the size of your capacity charge depends on your utility's peak, your zone, and your supply contract, so the same auction produces different dollar amounts in Baltimore, Columbus and Chicago.

What you can actually do about it