The power grid is hitting its limits. In this episode, we break down the critical results of PJM’s capacity auction for the 2028/2029 delivery year, where the price cap of $325 per megawatt-day was hit for the third consecutive auction.

We examine the widening gap between skyrocketing electricity demand and lagging supply, and what this means for future grid reliability.

Key Topics Covered:

The 6,830 MW Shortfall: Discover why PJM cleared 149,181 MW of capacity, falling significantly short of its desired 20% reserve margin and leaving the grid at a tight 15% margin under worst-case scenarios.

The Data Center Cost Explosion: Actual and forecasted data center loads have added a staggering 6.3billiontothisauctionalone,makingup4629.4 billion) of all capacity-related charges over the last four auctions—costs that ultimately fall on everyday ratepayers.

The $555 Simulated Reality: Learn why PJM's simulated auction shows that without the current price cap, prices would have soared to $555/MW-day across most markets, and reached nearly $777/MW-day in the Chicago area.

Why New Generation is Sitting Out: We look at why only 525 MW of new supply cleared. Skyrocketing costs for gas turbines—which are up 15% in a single year and 50% over the last five years—combined with manufacturers being sold out through 2030, mean developers are struggling to build new generation.

The September Backstop Auction Loophole: We explain how developers might be bypassing the main auction to wait for September's Reliability Backstop Procurement (RBP) auction, which offers longer contracts (2 to 15 years) and a higher average price cap of $555.

The Order 2222 Mystery: We discuss the surprisingly low turnout of demand response and why absolutely zero aggregated distributed energy resources (DERs) showed up to the party, despite being eligible to participate for the first time.

As FERC Chair Laura Swett warns that this consecutive shortfall is an "alarm bell" for the industry, we ask the tough question: Is PJM’s complex system of price caps and regulatory patches sustainable, or are we heading toward a Texas-style market with no capacity guarantees at all?

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