PJM 2028/29 Capacity Auction: Third Straight Year at the Price Cap
PJM's 2028/29 Base Residual Auction on July 14, 2026 procured 138,318 MW at the $325 per MW-day price cap for the third consecutive year. The auction fell 6,831 MW short of the reliability requirement. Capacity costs for the June 2028 through May 2029 delivery year will flow into default supply and supplier contracts across PJM states where cannabis operators shop or ride utility default.
By Jason Taken, Founder, Jaken Energy
Updated September 12, 2026Third year at the cap
PJM's 2028/29 Base Residual Auction ran July 14, 2026 and cleared at the $325 per MW-day price cap for the third consecutive year [pjm-2028-29-auction]. The auction procured 138,318 MW of generation resources [pjm-2028-29-auction].
PJM reported the result fell 6,831 MW short of the reliability requirement [pjm-2028-29-auction]. The gap between procured capacity and required capacity keeps upward pressure on supply costs across the PJM footprint.
For cannabis cultivators in New Jersey, Pennsylvania, Maryland, Delaware, Illinois, and Ohio, this auction sets the capacity charge that lands on June 2028 supply bills.
Auction results at a glance
| Metric | 2028/29 result |
|---|---|
| Auction date | July 14, 2026 [pjm-2028-29-auction] |
| MW procured | 138,318 [pjm-2028-29-auction] |
| Clearing price | $325/MW-day (cap) [pjm-2028-29-auction] |
| Shortfall | 6,831 MW [pjm-2028-29-auction] |
| Delivery year | June 1, 2028 to May 31, 2029 |
| Consecutive cap years | 3 [pjm-2028-29-auction] |
Compare to the prior 2026/27 delivery year, which cleared at $329.17 per MW-day ($120,147 per MW-year) [enel-pjm-2026-27-auction]. The 2028/29 cap price reflects updated FERC-approved collar levels in the auction [pjm-rpm-overview].
Converting $325/MW-day to your grow's bill
Capacity cost depends on peak load contribution (PLC) and load factor, not just total kWh.
Annual capacity cost ≈ PLC in MW × $325/MW-day × 365 days
Assume a 600 kW peak facility (0.6 MW PLC) with 2.5 million kWh annual use:
| Input | Value |
|---|---|
| PLC | 0.6 MW |
| Capacity price | $325/MW-day [pjm-2028-29-auction] |
| Annual capacity cost | 0.6 × $325 × 365 = $71,175 |
| Annual kWh | 2,500,000 |
| Capacity adder | 2.85 ¢/kWh |
That is capacity alone before energy, losses, and supplier margin. A facility with the same peak but only 1.8 million kWh annual use (worse load factor) sees a 3.96 ¢/kWh capacity adder.
Why three cap years matter for contract timing
If you signed a fixed supply contract in 2025 with capacity included through May 2027, the 2026/27 and 2027/28 capacity steps were absorbed or passed through per contract terms [enel-pjm-2026-27-auction]. The 2028/29 result hits June 2028 renewals.
| Delivery year | Capacity price | Effective |
|---|---|---|
| 2026/27 | $329.17/MW-day [enel-pjm-2026-27-auction] | June 1, 2026 |
| 2027/28 | Set Dec 2025 auction | June 1, 2027 |
| 2028/29 | $325/MW-day cap [pjm-2028-29-auction] | June 1, 2028 |
Operators renewing contracts in spring 2028 should expect suppliers to price the $325/MW-day capacity into quotes [pjm-2028-29-auction]. Contracts signed before the July 2026 auction may have capacity pass-through clauses that adjust at renewal.
The 6,831 MW shortfall
PJM procured 138,318 MW but needed more to meet the reliability requirement [pjm-2028-29-auction]. The 6,831 MW gap may trigger additional procurement through backstop mechanisms [pjm-rpm-overview].
Pennsylvania's executive order on backstop cost allocation and data center load growth intersect with this shortfall [pjm-rpm-overview]. Cultivators are small relative to data center load but pay the same capacity market clearing price on their PLC.
State-by-state: where this lands
| State | Default supply mechanism | Capacity flow |
|---|---|---|
| New Jersey | BGS auction | CIEP MW-day + RSCP embedded [pjm-2028-29-auction] |
| Pennsylvania | Utility procurement | Default service + shopping |
| Maryland | SOS / procurement | Default + shopping |
| Illinois | IPA procurement | ComEd/Ameren default |
| Ohio | PUCO-approved procurement | Utility default + shopping |
| Delaware | SOS auction | Default + shopping |
Shopping supply does not avoid capacity. It changes how capacity is priced in your contract. See fixed vs index contracts.
What cultivators can do before June 2028
- Review contract renewal dates against the June 1, 2028 capacity year start [pjm-2028-29-auction].
- Calculate PLC from interval data and confirm it on your PJM account.
- Compare fixed vs pass-through capacity language in supplier quotes.
- Invest in peak reduction to lower PLC for future delivery years.
- Evaluate demand response enrollment for the 2028/29 delivery year during the next DR auction window [pjm-rpm-overview].
The 2026/27 capacity bill impact is already live. The 2028/29 auction tells you what comes next if cap prices persist.
Demand response as partial offset
PJM capacity auctions clear demand response resources alongside generation [pjm-rpm-overview]. DR participants receive capacity payments for committed curtailable load. Enrollment for the 2028/29 delivery year closes at the auction. If you missed it, focus on PLC reduction and contract structure for the following cycle.
See demand response programs and Pennsylvania cultivation facility energy.
Comparing three consecutive cap years
| Delivery year | Clearing price | Cap hit? |
|---|---|---|
| 2026/27 | $329.17/MW-day [enel-pjm-2026-27-auction] | Yes |
| 2027/28 | Dec 2025 auction | Yes |
| 2028/29 | $325/MW-day [pjm-2028-29-auction] | Yes |
Three consecutive cap clears mean suppliers no longer price capacity as a tail risk. They price it as the baseline [pjm-rpm-overview]. Cultivators renewing contracts should expect cap-level capacity in every quote unless the contract explicitly caps the pass-through at a lower level.
New Jersey BGS interaction
New Jersey embeds PJM capacity in BGS-CIEP MW-day charges and BGS-RSCP blended rates [pjm-2028-29-auction]. The February 2027 BGS auction (for June 2027 supply) will reflect 2027/28 capacity. The February 2028 auction will embed the 2028/29 $325/MW-day result for CIEP customers [pjm-2028-29-auction].
Operators on fixed third-party supply skip the BGS auction but still pay capacity through their supplier contract terms.
Backstop procurement and the shortfall
The 6,831 MW shortfall [pjm-2028-29-auction] may require Reliability Backstop Procurement or similar mechanisms [pjm-rpm-overview]. Additional procurement costs could flow to load through uplift charges or adjusted capacity prices in later delivery years. Monitor PJM board and state commission actions on cost allocation.
Pennsylvania's executive order directing backstop costs toward data centers is one response [pjm-rpm-overview]. Cultivators should not assume they are exempt from uplift charges until rules are final.
Translating $325 per MW-day to your supply contract
For a facility with 500 kW peak load contribution, capacity cost scales with your PLC tag, not nameplate lighting wattage [pjm-2028-29-auction]. Ask your supplier how much of the June 2028 capacity year they hedged before the July 2026 auction cleared at the cap again.
Illinois IPA and ComEd default supply
Illinois cultivators on ComEd default supply receive capacity through Illinois Power Agency procurement, not directly from the PJM auction headline [pjm-2028-29-auction]. IPA-administered contracts embed PJM capacity costs into bundled default rates on a different calendar than New Jersey BGS [pjm-rpm-overview]. Shopping supply with an ARES still passes capacity through per contract terms.
Model the June 2028 capacity year when renewing Illinois supply contracts in spring 2028 [pjm-2028-29-auction]. The $325 per MW-day result applies to your PLC tag regardless of whether you ride ComEd default or a third-party supplier [enel-pjm-2026-27-auction].
Delaware and Maryland SOS interaction
Delaware and Maryland default supply mechanisms also embed PJM capacity from overlapping procurement cycles [pjm-2028-29-auction]. Multi-state operators in Wilmington and South Jersey face the same 2028/29 capacity price through different regulatory wrappers [pjm-2028-29-auction]. Compare each state's default benchmark separately when budgeting portfolio supply.
PLC reduction before the 2028/29 delivery year
Peak load contribution tags update from interval data each delivery year [pjm-rpm-overview]. Curtailing load during PJM peak hours in the 2027/28 measurement period lowers PLC for the 2028/29 capacity year [pjm-2028-29-auction]. A 50 kW PLC reduction at $325 per MW-day saves approximately $5,937 annually:
0.05 MW x $325 x 365 = $5,937 [pjm-2028-29-auction]
Stagger flower room schedules and HVAC staging during June through September 2027 measurement windows. PLC reduction is a one-time tag change that persists until a higher peak is measured in a future period [pjm-rpm-overview].
Ohio and Pennsylvania shopping context
Ohio and Pennsylvania cultivators shop supply through PUCO-approved and PAPUC-licensed suppliers respectively [pjm-2028-29-auction]. The 2028/29 capacity price flows through supplier contracts as pass-through or embedded cost depending on terms [pjm-rpm-overview]. Renewals in spring 2028 should assume $325 per MW-day unless your contract caps capacity below auction results [enel-pjm-2026-27-auction].
Shortfall and uplift charges to monitor
The 6,831 MW shortfall may trigger additional procurement costs [pjm-2028-29-auction]. PJM uplift charges can appear on supply bills in later delivery years [pjm-rpm-overview]. Cultivators on index contracts feel uplift immediately. Fixed contracts may pass uplift through if the contract includes a change-in-law or market uplift clause [pjm-2028-29-auction].
Three consecutive years at the price cap mean the June 2028 capacity step is predictable, not speculative [pjm-2028-29-auction]. Suppliers pricing spring 2028 renewals will embed $325 per MW-day unless your contract explicitly caps capacity pass-through at a lower level [enel-pjm-2026-27-auction]. Read renewal language sixty days before contract expiration to avoid evergreen rollover at uncapped capacity rates [pjm-rpm-overview].
Confirm your PLC tag on your PJM account annually. A lower measured peak in 2027 reduces capacity cost at the same $325 per MW-day clearing price [pjm-2028-29-auction]. See fixed vs index contracts for capacity pass-through language to review before spring 2028 renewals [pjm-rpm-overview].
Frequently asked questions
When did the 2028/29 PJM capacity auction run?
PJM held the 2028/29 Base Residual Auction on July 14, 2026. Results set capacity prices for the delivery year starting June 1, 2028.
What price did the 2028/29 auction clear at?
The auction cleared at the price cap of $325 per MW-day for the third consecutive year according to PJM's release.
How much capacity did PJM procure?
PJM procured 138,318 MW and reported a shortfall of 6,831 MW relative to the reliability requirement.
When will the 2028/29 capacity price hit my bill?
Capacity costs for the 2028/29 delivery year typically appear on supply bills starting June 1, 2028, whether you are on utility default or a third-party contract with capacity pass-through.
Does the auction shortfall mean power outages?
A shortfall triggers additional procurement mechanisms including potential backstop auctions. PJM reported the gap between procured capacity and the requirement, not immediate reliability failure.
Related reading
- $329.17/MW-day PJM Capacity Started Hitting Bills June 1, 2026
PJM's $329/MW-day 2026/27 capacity price hit supply bills June 1. Convert RPM to cents per kWh for your grow.
- PJM Capacity Price Cap Extended to December 2026 Auction: Why Suppliers Price Differently
PJM's capacity price cap and floor extend through the December 2026 auction for 2029/30. How collar rules change supplier capacity pricing for cannabis buyers.
- Fixed vs. Index vs. Block-and-Index Electricity Contracts
What each supply structure means, who carries price risk, which fits a 24/7 grow load, what pass-throughs do, and a worked 12-month comparison.
- Fixed vs. Variable Rate Questions for Cannabis Facilities
Should a grow lock in or float? Fixed vs index vs block-and-index, pass-throughs, PJM capacity, contract length, and when default supply resets.
- Pennsylvania Cannabis Cultivation Facility Energy: Lighting, HVAC, and Demand Charges Under PECO and PPL
What a PA grower/processor pays for power: lighting and dehumidification in a 5,701 HDD climate, PECO and PPL demand classes, and a worked example.
- PJM Reliability Backstop Auction: Who Pays for Data Center Shortfalls
PJM's backstop procurement and data-center cost allocation may add supply charges for cultivators in PJM states starting 2028.
Jason Taken founded Jaken Energy, the commercial energy procurement practice behind this site. He works with licensed cannabis operators in deregulated electricity markets to lower supply rates, manage demand charges, and evaluate efficiency upgrades.
Sources
Inline citations in this article, such as [pjm-2028-29-auction], refer to the entries below. Links open the primary source in a new tab.
- [pjm-2028-29-auction]PJM Capacity Auction Procures 138,318 MW of Generation Resources — PJM Interconnection. Accessed 2026-09-12.
- [enel-pjm-2026-27-auction]PJM 2026/2027 Capacity Auction Results — Enel North America. Accessed 2026-09-12.
- [pjm-rpm-overview]Reliability Pricing Model — PJM Interconnection. Accessed 2026-09-12.