DPA Calls for Extension of PJM Capacity Price Cap to Protect Consumers

On January 30th, Jameson Tweedie, Delaware’s Public Advocate, urged PJM Interconnection, the grid operator for Delaware and other states, to extend a price cap on the capacity auction to protect ratepayers from billions of dollars in capacity price increases. These comments are part of DPA’s continuing efforts to advocate for Delaware ratepayers on regional energy issues, particularly as the rapid growth of large energy users like hyperscale data centers has upended the regional energy market. On February 12th, PJM agreed to seek extension of the price cap for the next two auctions.

PJM uses the capacity auction (or base residual auction) to ensure enough electricity generation is available in future years. Over just the past two years, however, the auction price has increased by more than 1000%, and would have increased even more without a price cap. PJM’s Independent Market Monitor (IMM) has determined that the price cap has already prevented $13 billion in extra capacity market costs, which are ultimately passed to consumers. The IMM has also determined that these escalating costs are driven by unprecedented increases in electricity demand, primarily from hyperscale datacenters, which have increased the auction costs by more than $23 billion over the last three auctions.

In his comments, Jameson emphasized that because the market is not functioning as intended, safeguards are needed to protect consumers.

“DPA believes the price collar should stay in effect until it is evidenced that new generation/supply has come online at a level sufficient to fully meet demand…. [S]ince the cap was put in place, these conditions have only worsened and are likely to last years until supply chain and other delays are resolved. Any auction conducted in such circumstances will not accomplish the purpose of the auction and therefore would not result in just and reasonable rates.”

“PJM must take action to protect consumers from paying windfall profits to existing generators – a wealth transfer from consumers – that cannot result in development of sufficient new capacity in time to meet demand.”

Jameson’s comments are part of continued engagement by the DPA at PJM to protect the interests of Delaware ratepayers, including:

• urging PJM to select leadership and board members “focused on the interests of the consumers that PJM serves” (7/23/25 letter to PJM);
• submitting comments arguing that interests of consumers “must be an integral consideration throughout” PJM’s process and that PJM should “avoid socializing the costs of large load additions onto other ratepayers” (8/27/25 letter to PJM);
• joining with other consumer advocates on a proposal designed to protect consumers from price increases caused by new large energy users (11/17/25 Joint Consumer Advocate Proposal);
• forming the Affordability and Reliability for Residential Consumers user group within PJM as a vehicle to advocate for the interests of residential consumers; and
• proposing a reliability backstop auction mechanism designed to protect existing customers from price increases caused by new large energy users (proposal to be presented 2/17/26).

DPA will continue to advocate at PJM to ensure new large energy users, including hyperscale datacenters, are not subsidized by everyday consumers.