14AUG

PJM auction falls 6,623 MW short

2 min read

10:48UTC

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

Read original →

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

Read story →

PJM wants 50 MW loads curtailable

PJM's 6,623 MW capacity auction shortfall in July is the arithmetic underlying both halves of the ER26-3380-000 docket.

Occurred 3 Aug 2026

Read story →

Different Perspectives

Antel, Uruguay's state telecom

Antel will build a $70m AI data centre in Canelones, announced after an 11-12 August Council of Ministers meeting, with construction from Q1 2027 and roughly 250 direct jobs. Uruguay is putting a sovereign AI facility on the state balance sheet rather than courting a hyperscaler to build one.

Comtel

Comtel is building a Figline Valdarno data centre inside the H2-Era Green Valley complex, powered by an 84 MW solar plant and selling waste heat to on-site farming. Co-location with generation and a heat offtaker is the model regulators elsewhere are now writing into connection terms rather than negotiating case by case.

Greg Abbott, Texas Governor

Abbott directed PUCT and ERCOT on 3 August to audit every queued data centre's ownership, incentives and water use, saying projects that fail the state's survey should lose grid access. QTS's co-chief executives welcomed the review; Agriculture Commissioner Sid Miller called it too vague and wants a special legislative session instead.

Government of Gujarat

Gujarat notified a Data Centre Policy on 7 August offering capital, interest, tax and duty subsidies for projects sourcing at least 51% green power, targeting 7.5 GW against a 74 GW installed base. Where other jurisdictions priced or restricted grid access this month, Gujarat is paying developers to come instead.

Taiwan's Legislative Yuan Economics Committee

The committee gave preliminary approval on 5 August to a self-generation mandate for large power users, including data centres, with fines up to NT$750,000. It agreed the obligation in principle while leaving the megawatt threshold that defines its reach to later implementing regulation.

Australian Energy Market Commission

AEMC advised ministers on 5 August that data centres should surrender renewable certificates against actual consumption, prove new demand with new firm capacity, and register as market participants. The advice would turn passive customers into obligated participants inside the market's dispatch and settlement machinery, ahead of an access-standards determination due in late October.