4AUG

PJM auction falls 6,623 MW short

2 min read

10:53UTC

PJM's 2027/28 capacity auction cleared 6,623 MW below its reserve target, forcing a supplemental procurement with a 21 July deadline as the largest US grid hunts for power it has already sold.

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Key takeaway

PJM's 2027/28 auction came up 6,623 MW short, buying power years before the campuses driving demand connect.

PJM Interconnection, the largest US regional transmission organisation, cleared its 2027/28 capacity auction 6,623 MW below its reserve target, and set a 21 July deadline for supplemental procurement to close the gap. A capacity auction is where a grid operator buys commitments from power plants to be available years ahead; the reserve target is the cushion of supply above forecast peak demand it must secure. ¹ ²

A shortfall this far out means PJM is short of generation it has, in effect, already promised to deliver. It sharpens the question the operator's board put to 13 governors in May, warning that grid-reinforcement costs could fall on household bills unless states write cost-allocation rules first . Every megawatt the auction fails to clear now is one the supplemental round must buy at a premium, and the load driving the gap is data-centre demand that has not yet connected.

Deep Analysis

In plain English

PJM runs the electricity market for the largest US grid area, covering 13 states plus Washington DC. Its most recent auction, which lines up power supply for 2027 and 2028, came up 6,623 megawatts short of the reserve PJM wants to keep on hand as a safety margin, roughly enough to power several million homes. PJM now has until 21 July to buy extra power supply to help close that gap. The shortfall follows PJM's board asking the governors of all 13 states in its territory in May how to fairly split the rising costs data centres are adding to the grid.

What could happen next?

Risk
Capacity-market clearing prices for the 2027/28 delivery year are likely to rise further given the confirmed 6,623 MW shortfall, adding to the cost-allocation dispute already before PJM's board and the 13 state governors.

Source Landscape

This story draws on neutral-leaning sources

A 6,623 MW shortfall against PJM's reserve target typically pushes capacity-market clearing prices sharply higher for the affected delivery year, a cost that flows through to every utility and, eventually, every ratepayer inside PJM's 13-state footprint, well beyond the data centres driving the demand growth.

The 21 July supplemental procurement deadline is a narrow window: PJM must secure replacement capacity commitments before the 2027/28 delivery year begins, and any capacity it cannot procure in time typically carries a price penalty built into the market's own scarcity pricing rules.

Consensus view: PJM's board raised the shortfall question to all 13 governors in its footprint in May ; the 2027/28 auction falling 6,623 MW short of its reserve target gives that cost-allocation dispute a hard number, and PJM's 21 July supplemental procurement deadline is the near-term mechanism for closing the gap.

Counter-view: Coverage of PJM's auction result has itself needed correction: an initial trade-press figure of 6,632 MW was revised down to 6,623 MW, a reminder that even the numbers describing PJM's market design carry error margins the underlying auction process does not resolve on its own.

Key tension: Whether a supplemental procurement can close a 6,623 MW gap fast enough to matter for the 2027/28 delivery year, or whether the shortfall simply confirms PJM's queue and connection rules are structurally behind data-centre demand.

Sources:Foley Hoag·Utility Dive

Mentions:PJM Interconnection →Washington →

First Reported In

Update #11 · Pipeline vetoed, campus keeps building

Foley Hoag· 25 Jul 2026

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Causes and effects

This Event

PJM auction falls 6,623 MW short

The largest US grid falling short in its own capacity auction shows demand outrunning supply years ahead, before the campuses driving it are even built.

Led to

PJM warns 13 governors on grid costs

The capacity shortfall sharpens the cost-allocation question PJM's board put to 13 governors in May.

Occurred 19 May 2026

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Different Perspectives

Government of Odisha

Odisha signed a $1.5bn agreement with HCLTech and Sarvam AI on 24 July for a sovereign AI data centre in Bhubaneswar, targeting 2028 operations. While regulators elsewhere price developers out of the queue, Odisha is bidding state financial assistance to bring capacity in, betting the AI infrastructure boom is worth courting rather than rationing.

Switch Datacenters and Uithoorn

The developer, the municipality, Liander and dozens of greenhouse growers signed a waste-heat agreement letting a 60 MVA facility proceed under a provincial rule that bans sites above 5 MVA. The public-interest exception argues the site relieves rather than adds to grid congestion, working around a standing ban from inside rather than waiting for it to change.

Iskandar Puteri residents

Residents protested in February over falling water pressure they attribute to ZDATA's 300 MW construction; ZDATA disputes causation and has not yet resolved the dispute with its wastewater-only pivot. The complaint sits unadjudicated while the operator advertises compliance to state authorities the residents cannot address directly.

Microsoft

DC Byte reports Microsoft looking to the Nordics for new capacity while Dublin's regional share falls to 15 per cent, though this is a market-intelligence inference rather than a company statement. Microsoft keeps its existing Dublin cloud region, which is costly to relocate, while directing new investment where power is cheaper and the queue is shorter.

ISO New England

ISO-NE proposed excluding new large loads from its Installed Capacity Requirement entirely, forcing data centres to bring their own generation or accept curtailment, even though New England's demand has been flat or falling for a decade. The reform is pre-emptive, written before the region has felt the strain PJM and MISO already report.

Ofgem

Ofgem opened its Data Centre Commitment Fee consultation on 29 July, arguing that free options on grid capacity let developers bank places on ten sites and abandon nine, crowding out projects that would build. It expects the deposit to filter the queue before the rule even takes final form.