FERC Approves PJM Capacity Price Collar Extension through 2030 to Protect Ratepayers

FERC Approves PJM Capacity Price Collar Extension through 2030 to Protect Ratepayers

To mitigate the rapid repricing of electricity driven by AI data center load growth, the Federal Energy Regulatory Commission (FERC) issued an order on April 28, 2026, extending the capacity market price collar for PJM Interconnection.¹ This extension covers the next two upcoming Base Residual Auctions (BRAs): the 2028/2029 Delivery Year auction (closing July 7, 2026) and the 2029/2030 Delivery Year auction (closing December 15, 2026).

This decision follows the unprecedented clearing of the 2027/2028 capacity auction at the absolute price cap, as detailed in PJM 2027/2028 Capacity Auction Clears at Price Cap. Under the newly extended rules, wholesale capacity prices will be bound by a price cap of approximately $325/MW-day and a price floor of $175/MW-day.

Bipartisan Alignment and Utility Backing

The price collar extension represents a remarkable political and industry consensus. A Statement of Principles (SOP) was issued on January 16, 2026, by the White House National Energy Dominance Council (NDEC) and a bipartisan coalition of governors from all 13 states in the PJM footprint. The coalition urged PJM to extend this consumer protection mechanism to prevent massive retail bill hikes.

Exelon, the major PJM transmission and distribution utility, strongly advocated for the price cap to protect residential customers from spiraling capacity costs while long-term supply solutions are developed.

"“Despite PJM anticipating electricity demand to grow by more than 30 GW by 2030, new supply resources are not materializing at a pace needed to ensure reliability and affordability,” said Colette Honorable, executive vice president, chief legal officer for compliance, and corporate secretary at Exelon. “The price cap helps protect customers and make sure they are not on the hook while the region is waiting for supply to catch up.”" — Daily Energy Insider

Ratepayer and Market Implications

Without the price cap, capacity prices in the upcoming July 2026 auction were projected to spike even higher, potentially costing families and businesses in the PJM territory an extra $70 per month. Environmental and consumer advocates, including the Natural Resources Defense Council (NRDC), have warned that data center load growth could drive over $100 billion in cumulative electricity bill increases through 2033 if not properly managed.

By capping the capacity price at $325/MW-day, FERC is providing near-term bill relief, though advocates caution that a long-term solution must require large data center loads to pay for their own incremental power supply rather than shifting the burden onto captive residential ratepayers.