US PJM power grid auction prices expected to stabilize near record highs

Power prices in PJM Interconnection's latest annual capacity auction on Tuesday are expected to hold near record highs due to a temporary price cap by the largest U.S. grid operator to curb rising bills for households and businesses.

Prices in the auction, which is aimed at securing enough electricity supplies to cover the highest-demand days on the PJM grid covering 13 states in the Mid-Atlantic and Midwest regions, have soared to record highs in recent years largely because demand from data centers has outstripped supplies.

Since 2024, so-called capacity prices determined by the auction have jumped by more than 1,000% from that supply-and-demand imbalance, hiking energy bills for those living in the regions covered by PJM — about one in five Americans.