There comes a point when even the most willfully blind must acknowledge what is plain to see. That point arrived quietly—but thunderously—on July 22, 2025, when PJM Interconnection, the grid operator for 65 million Americans across 13 states and the District of Columbia, released the results of its latest capacity auction.
In technical terms, it was the 2026/2027 Base Residual Auction. In plain English? It was a panic button. A red flare. A neon billboard blinking “DANGER AHEAD.”
For the first time in history, the auction cleared at the maximum legal price—$329.17 per megawatt-day—in every single zone of PJM’s vast territory. That’s not a random number. It’s the cap imposed by the Federal Energy Regulatory Commission (FERC). And when a market hits the cap across the board, it’s no longer a functioning market. It’s a distress signal.
The media spin, of course, was predictable. Some downplayed it. Some focused on potential impacts to ratepayers. Others suggested reforming the market structure. But almost no one confronted the core truth that this auction screamed from the mountaintop:
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