PJ PJM Loading... : Bullish and Bearish Analyst Opinions

PJM's latest capacity auction cleared at the $325/MW-day price cap, below the uncapped $555/MW-day level, and fell 6.8 GW short of the target reliability requirement. PSEG notes the collar will remain in place through the December 2026 auction. — The gap between capped and uncapped prices signals the threat of forced procurement (RVP/IRAS), which could distort capacity market prices and increase costs for LSEs and consumers.

PJM's capacity auction cleared below reliability requirements by ~6.8 GW, and simulated prices ($555/MW-day across footprint, $777 in ComEd) far exceeded the $330 FERC cap, indicating severe scarcity. — Provides direct evidence that capacity prices in PJM are monetarily suppressed by the cap, signaling a severe supply-demand imbalance that will drive future investment and potentially higher costs.

PEG is cautious about PJM's proposed reliability backstop auction, expressing concerns about cost allocation and the load-serving entity responsibility, but is waiting to see new CEO's direction.

Management explicitly stated they will NOT sign contracts taking commodity risk on generation and energy, even if it means not participating in PJM's phase two procurement, which could cool PJM's plans for utility involvement in new generation builds. — A key potential market participant is signaling it will refuse to accept the proposed risk allocation, undermining the feasibility of PJM's proposed mechanism and de-risking FE against downside exposure.