On July 20, 2024, PJM Interconnection — the Regional Transmission Organization (RTO) that manages the electric grid for 13 Mid-Atlantic states — released the results of its Base Residual Auction (BRA) for the 2025–2026 planning year. These results signal significant price increases for electricity across the region, starting June 1, 2025. The auction cleared at $269.92/MW-day, the highest capacity price in PJM’s history at the time.
While rising demand contributed to the increase, most of the upward pressure stems from PJM’s ongoing failure to resolve critical market design flaws and interconnection delays. Issues such as bottlenecks in the queue for new generation projects and the lack of timely reform to outdated capacity market rules have created structural problems that continue to inflate prices.
On July 22, 2025, PJM released the results of its next BRA for the 2026–2027 delivery year — and this time, the auction hit the FERC-approved price cap of $329.17/MW-day, marking another record high. This represents a 22% jump over the previous year’s price and sets the stage for continued upward pressure through at least 2028.
These rising costs have prompted escalating political and regulatory action. In December 2024, Pennsylvania Governor Josh Shapiro filed a lawsuit with FERC to halt further price hikes. FERC responded by imposing a price floor of $175/MW-day and a cap of $325/MW-day for upcoming auctions. In a show of regional unity, New Jersey Governor Phil Murphy joined eight other governors from across PJM’s 67-million-customer footprint to demand reforms in PJM governance, including a more transparent process for appointing board members. To advance these discussions, the New Jersey Board of Public Utilities (NJBPU) will host a Resource Adequacy Technical Conference on August 5, 2025, and a broader multi-state conference will take place on September 23, 2025, at the National Constitution Center in Philadelphia.
These forums will address:
• PJM market design reforms to reduce volatility
• Interconnection queue reform strategies
• Long-term transmission planning
• Consumer protection mechanisms
• Strengthening regional-state coordination
As policymakers push for accountability, businesses must act now to protect themselves from rising energy costs.
What This Means for Your Business — and What You Can Do
The recent capacity auction results make one thing clear: electricity prices in New Jersey will continue to rise for the foreseeable future. For commercial and industrial energy users, this creates significant budgeting uncertainty and financial exposure. Now more than ever, choosing the right energy advisory partner is critical.
At UA, we provide strategic energy services that help businesses navigate this volatile market with confidence. Our solutions go beyond traditional procurement and include tools and strategies to actively manage energy costs.
Here’s how we can help:
Peak Day Alerts: Our clients receive real-time alerts forecasting when energy usage and prices are expected to spike, allowing you to adjust operations and avoid costly demand charges — especially during high-stress summer days.
Demand-Side Energy Management (DSM): A customized DSM strategy can significantly reduce your electricity spend. By shifting usage away from peak hours and integrating automation, you can flatten demand curves and contribute to grid stability — all while lowering your costs.
Energy Strategy Planning: We work with you to develop a comprehensive energy strategy that protects against price spikes. This includes:
• Energy procurement
• Efficiency upgrades
• Load forecasting and optimization
• On-site energy storage
• Renewable energy adoption (e.g., solar & RECs)
Renewable options are not only more sustainable — they’re often more cost-effective over the long term than fossil fuel contracts. While initial investments may be higher, they can be amortized over years of use, delivering strong financial and environmental returns.
Don’t Wait — Be Strategic Now
In a market where capacity costs are rising sharply and policy reform will take time, reactive measures are no longer enough. A proactive, data-driven strategy, backed by an experienced partner like UA, can help you mitigate cost impacts, manage risk, and turn uncertainty into opportunity.
Contact UA today at www.utilityadvantage.com to schedule a consultation or energy strategy review. We’ll help you understand your options, reduce risk, and take control of your energy future — before the next price hike hits your bottom line.
