Following the recent release of the PJM BRA Results for 2026/2027, CPV Retail held a webinar to provide a detailed analysis of the outcomes and the factors that led to these results. Below is a brief summary of the key points discussed during the session. For additional insights, be sure to check out the webinar, now available on-demand, featuring Khristian Camacho, Vice President of Pricing and Supply at CPV Retail, and Dan Jerke, Vice President of Energy Management at CPV.

How We Got Here:

As we look at the current state of the capacity market, it’s clear we’ve entered a period of tightening — and not by accident.

Over the past year, forecasted demand has risen by 5 gigawatts, signaling a significant uptick in expected load. At the same time, the supply side has underperformed: gains from new renewable resources and delayed retirements didn’t meet expectations. The market was simply short.

As a result, the most recent Base Residual Auction cleared at the price cap of $329.17. Without that cap in place, it would have gone even higher — over $388 per megawatt-day. That tells us just how stressed the market has become.

Each BRA only secures resources for a single delivery year, and because of regulatory delays, these auctions aren’t held with much lead time. Instead of planning several years in advance, we’re often reacting with just a one-year horizon. That limited visibility makes long-term strategy difficult and forces market participants into short-term responses.

We’re already seeing the effects. The cost implications of last year’s auction are now tangible. We’ve entered the delivery period that was secured under those tight market conditions, and the financial impacts are being felt — especially by end users.

EXAMINING THE 2026/2027 RESULTS:

To interpret the results from the BRA, Dan Jerke presented key concepts with a visual of the supply and demand curve in relation to identifying the intersection of supply and demand, which is the market-clearing price.

As mentioned, PJM imposed the price collar, spanning $329 and $177, shown as solid segments, whereas the unconstrained curve is dashed.

Next, supply appears largely unchanged YOY, clearing at a similar level; however, the ELCC adjustment masks the fact that a significant amount of new supply showed up, roughly 4-5 GW across new gen, uprates, and rescinded retirement notices. If you look at the deactivation list, most units have stuck around.  Very strong turnout, yet was surpassed by outward shift.

Clearing results at the cap were $329.17. Without the cap, the market would have cleared at $388.57 on the dashed demand curve, according to PJM’s simulation. The slope of this curve is approximately $10 per 100 MW, so a $60 price difference corresponds to a 600 MW buffer before clearing further down the curve. An additional 1% of supply would have moved the market halfway down the sloped segment.

For more insights and a look into what to anticipate for future years, check out the webinar on demand.