On February 27, 2026, PJM Interconnection, L.L.C. (“PJM”) filed an amendment to its Open Access Transmission Tariff (“Tariff”) to extend the price cap and price floor for all Reliability Pricing Model (“RPM”) Auctions through the 2028/2029 and 2029/2030 Delivery Years.

If approved, the proposal would extend the existing $325/megawatt (“MW”)-day price cap (in Unforced Capacity (“UCAP”)) and existing price floor of approximately $175/MW-day (in UCAP).  PJM explains that this proposal is one element of a multi-prong approach designed to address resource adequacy challenges in the PJM region.   PJM adds that the requested extension is necessary in light of evolving system conditions, including rapid load growth (particularly from large new data centers) and slower-than-expected new resource development resulting from a compressed capacity auction schedule, with the most recent Base Residual Auction (“BRA”)  clearing 5.6% below PJM’s target reliability levels.  This outcome prompted the PJM Board to direct the immediate initiation of a reliability backstop procurement to help meet PJM’s resource adequacy requirements.  The proposed price collar would extend through the 2029/2030 Delivery Year, giving PJM time to complete the upcoming reliability backstop procurement and subsequent holistic review of PJM’s wholesale energy and capacity markets. 

PJM asserts that the extension of the price floor, in conjunction with extending the price cap, will reduce the volatility of auction clearing prices, directly decrease uncertainty surrounding auction market revenues, and enhance developers’ ability to maintain existing generation within the PJM footprint.  According to PJM, these elements work to provide a longer-term signal to investors that interventions will not be one-sided, which may help attract resource development and future investment in the PJM market.

The Commission initially accepted the price collar for the 2026/2027 and 2027/2028 Delivery Years.  Notwithstanding this limitation, PJM states that nothing in the Commission’s order precludes PJM from seeking an extension of the price collar and that recent developments—like the failure to clear the BRA reliability requirement and the initiation of backstop procurement measures—provide additional justification for the proposed extension.  PJM further asserts that the backstop procurement could have interactive effects with the RPM auctions such that higher prices to stimulate new entry into PJM may not be necessary and could increase the risk of price volatility. Given the ongoing evaluation of and anticipated changes to investment incentives in PJM’s market this year, PJM states that extension of the price collar supports PJM”s ongoing efforts and provides stable market outcomes in the near-term.

PJM requests an effective date of March 31, 2026, for its proposed Tariff changes.

A copy of PJM’s request in Docket No. ER26-1556 is available here.