capacity auction Archives | Citizens Utility Board

CUB statement: Capacity market prices reflect need for data center reform

Jim Chilsen — Wed, 17 Dec 2025 23:03:56 +0000

The following is a statement from CUB Executive Director Sarah Moskowitz on the results of PJM Interconnection’s 2027-28 capacity auction, announced Wednesday, Dec. 17 (Read the full statement here.) After a third straight auction marked by unacceptably high prices, it is painfully obvious that our capacity market is breaking under the weight of data center demand and a dysfunctional interconnection queue. Even worse, since the auction results fell below the reliability requirement, consumers are getting the worst of all worlds: paying more money for reduced electric reliability, while existing generators get a windfall. These results ramp up the urgency for decisive action from both PJM Interconnection and individual states, such as Illinois, to rein in runaway data center-related energy demand and protect customers from future price spikes. Data center companies are among the wealthiest in the world, and it is simply unconscionable that customers should pay unbearably high power costs to foot the bill for data center energy guzzling. This is a historic moment that requires action and leadership from PJM and the states in defense of electric customers. What’s good for reliability is good for affordability: Data centers must be held accountable for their own costs. Without real reforms, in just a few years 67 million electric customers in the PJM footprint could face rolling blackouts and an escalation of power bills that make the current price spikes seem tame. While there is a long list of actions that are required, these reforms are at the top of the list: PJM should extend the lower price cap to protect customers, and eliminate any price floor. PJM and states should require data centers to bring their own new clean energy. States should require that data centers operate under maximum energy efficiency and assign data centers into a special rate class to make sure those facilities, and not everyday customers, are paying for data center-related upgrades to the distribution system. –CUB Executive Director Sarah Moskowitz Background: On Wednesday, Dec. 17, PJM Interconnection, a “Regional Transmission Organization,” announced the results of an auction to determine the price for reserve power, or “capacity.” PJM is the largest grid operator in the country, serving 67 million customers across all or parts of 13 states and the District of Columbia (including Commonwealth Edison’s 4.2 million customers). The auction (technically referred to as the “Base Residual Auction”) was held Dec. 4-10. It set a capacity price of $333.44 per Megawatt-day, which will be in effect from June 1, 2027 through May 31, 2028. Capacity costs are payments consumers make to power generators–the companies that own power plants. These costs are a key component (roughly 20 percent) of the price ComEd customers pay for electricity. ComEd has not yet announced how this will impact its supply price in June of 2027. Like last year, the capacity cost hit a price cap negotiated by Pennsylvania Gov. Josh Shapiro. The price is more than 11 times higher than what the price was for 2024-2025. That price cap is set to go away after this auction, when a status quo, higher price cap is reinstated. Capacity auction prices in recent […]

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PJM Capacity Auction Leads to Record Price Spike for Second Straight Year, Threatens Even Higher Com Ed Bills in 2026-27

Elizabeth — Tue, 22 Jul 2025 21:24:13 +0000

CUB released the following statement: While we are relieved that the negotiated price cap prevented capacity costs from soaring even higher, this record price spike is unacceptable. CUB is deeply concerned that ComEd customers will continue to bear painfully high costs for another year, largely because of policy shortcomings from PJM. The power grid operator’s policy decisions too often favor outdated, expensive power plants and needlessly block low-cost clean energy resources and battery projects from connecting to the grid and bringing down prices. This extended price spike was preventable. It ramps up the urgency of implementing long-term reforms at PJM and comprehensive energy legislation in Illinois, such as the Clean and Reliable Grid Affordability Act, to protect customers from price spikes that serve only to give power generators windfall profits. –CUB Executive Director Sarah Moskowitz Background On Tuesday, July 22, PJM Interconnection, a “Regional Transmission Organization,” announced the results of an auction that determines the price for reserve power, or “capacity.” Capacity costs are a key component of the price Commonwealth Edison customers pay for electricity. PJM is the largest grid operator in the country, serving 67 million customers across all or parts of 13 states and the District of Columbia (including Commonwealth Edison’s 4.2 million customers). The auction (technically referred to as the “Base Residual Auction”) was held July 9-15. It set a record-high capacity price of $329.17 per Megawatt-day from June 1, 2026 through May 31, 2027. The capacity cost hit a cap negotiated by Pennsylvania Gov. Josh Shapiro and is about 22 percent higher than the price that was set last year for ComEd territory and about 11 times higher than what the price was two years ago. Capacity costs are payments consumers make to power generators–the companies that own power plants–and they have a key impact on the supply price ComEd customers pay. ComEd’s price spiked on June 1 of this year because of high capacity costs, and, because of the latest auction, it will again in June of 2026. (ComEd has not yet announced what the supply price will be next June.) The 2024 capacity auction set a then-record price of about $269.92 per MW-day, about 830 percent higher than the $28.92 per MW-day capacity price set in the auction the year before. Following the price spike in the last auction, consumer and environmental advocates pushed for several changes: RMR reform: Environmental advocates successfully pushed for changes in the way PJM handles Reliability Must Run (RMR) arrangements. RMRs allow PJM to funnel extra consumer money to an otherwise retiring plant to keep it open past its closure date. Under previous PJM policy, the electric capacity of an RMR plant was NOT included in the capacity auction. Consumers thus ended up paying double: first for the price of the RMR contract, and then again because of the high capacity prices that result from not counting the RMR plant. For example, the Independent Market Monitor estimated that not including Brandon Shores and Wagner–two RMR fossil fuel plants near Baltimore, Maryland–in the last capacity auction increased the cost by as much as 40 percent. Changes made since the last […]

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CUB Q&A: Why did Ameren’s electricity price spike this past summer?

Jim Chilsen — Fri, 23 May 2025 20:28:30 +0000

A spike in an electricity “capacity auction” meant that the supply price for Ameren Illinois increased significantly on June 1. Ameren estimated that this increased the average monthly bills of a typical residential customer by 18 percent to 22 percent, or roughly $38 to $46 per month, over the summer. Thankfully, Ameren’s price did go down significantly, as of Oct. 1. Read CUB’s Q&A and visit CUBHelpCenter.com for more information. What happened? In April, the power grid operator known as the Midcontinent Independent System Operator (MISO) announced the results of its latest capacity auction (technically called the “Planning Resource Auction”), covering the 12-month period from June 2025 through May 2026. The auction is how the grid operator secures reserve power in its region, which includes all or parts of 15 states from the upper Midwest through Ameren Illinois’ territory in central and southern Illinois and down to Louisiana. (MISO territory also includes the Canadian province of Manitoba.) In the latest auction, the summer capacity price skyrocketed from $30 per Megawatt-day in 2024 to $666.50 per MW-day this year–a 22-fold increase. MISO’s capacity prices are seasonal, and while they are still elevated compared with the year before for the fall, winter and spring seasons, they do drop significantly after the summer. Below are the seasonal prices from the latest auction (Ameren Illinois is located in MISO’s Zone 4): What exactly are capacity costs? Not only do you pay for the power you use now, but you also pay for power you could use in the future. Capacity refers to extra payments consumers give power plant operators for the commitment to have enough reserve electricity available if demand suddenly spikes. (Think of a hot summer afternoon, when everyone blasts the air conditioning.) Where does a capacity price increase appear on my bill? An increase in capacity prices will affect the supply section of your Ameren bill. For most customers, the capacity cost is one component of Ameren’s per-kilowatt-hour (kWh) supply price. On average, capacity takes up roughly 20 percent of the supply price. (While most customers don’t see capacity costs as a separate line item, participants in Ameren’s Power Smart Pricing program–which charges you a supply price that can change hourly–do see a capacity line item on their bills.) How much will an increase in capacity costs increase Ameren bills? Ameren’s electricity supply rate, also known as the “price to compare,” increased by about 50 percent, to 12.18 cents per kilowatt-hour (kWh), from June through September 2025. Ameren estimated that this higher rate, which includes the supply price, a transmission charge and a “supply cost adjustment,” increased summer power bills by an average of 18 percent to 22 percent, or $37.62 to $45.98 per month for the typical customer (10,000 kWh a year). In October, capacity prices came down from their summer high, and Ameren’s new supply price, for October 2025 through May 2026, was significantly lower: 8.402¢ per kilowatt-hour (kWh) for up to 800 kWh of usage. 7.483¢ per kWh for all electricity usage beyond 800 kWh. The summer price spike had a significant impact on Ameren customers. Unlike with PJM’s capacity […]

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The fight before FERC, explained

Megan — Mon, 06 Aug 2018 22:18:17 +0000

What is capacity, and what does it mean for your ComEd bills? An unusual battle is shaping up before the Federal Energy Regulatory Commission (FERC), one that could undermine Illinois’ energy policy and send ComEd bills skyrocketing if out-of-state fossil-fuel generators get their way. Specifically, they want to change the rules governing how utilities buy energy “capacity” on the electricity market that includes ComEd territory—and they need permission from FERC to do it. We’ll try to break down this technical issue and explain what it means for your electric bills. First, what is capacity? Not only do you pay for the power you use now, but you also pay for power you could use in the future. Capacity refers to extra payments consumers give power plant operators for the commitment to have enough electricity available if demand suddenly spikes. (Think of a hot summer afternoon, when everyone blasts the AC.) How does it affect my bill? In Illinois, utilities distribute power, but they do not make it themselves; utilities are not allowed to own power plants. Instead, Illinois is a deregulated state where independent generators compete to provide utilities with electricity at the lowest cost. Capacity, a generator’s commitment to be available when demand is high, is sold separately through an auction, in a different market. Capacity costs are embedded in the supply charges on your bill and account for roughly 21 percent of supply, according to the Illinois Commerce Commission (ICC). Why does this particular battle only affect ComEd customers? The power grid in northern Illinois is overseen by a different regional authority than the one used by central and southern Illinois. PJM Interconnection, a private, not-for-profit, regional transmission organization, manages a grid that stretches from northern Illinois across 13 states to the East Coast and includes Washington, D.C. The area served by PJM is the largest electricity market in the United States, and accounts for about 20 percent of the U.S. power supply. Ameren customers, in central and southern Illinois, are served by a different capacity market, managed by the Midwest Independent System Operator, and for now do not face the same issues. What are the current rules? PJM has complicated systems for auctioning power and capacity, so this explanation is oversimplified for ease of understanding. What you need to know is that PJM sets the rules for selling power and capacity in ComEd territory, and those rules need FERC approval. According to Crain’s Chicago Business, the cost of capacity has risen substantially in recent years and become a crucial source of revenue for power plant owners. (By the way, alternative energy suppliers as well as ComEd buy electricity on this market. So you won’t escape capacity charges by changing suppliers.) But Illinois and other PJM states have supported the development of energy efficiency and renewable energy like solar and wind. In Illinois, the Future Energy Jobs Act (FEJA), passed in 2016, incentivizes energy efficiency, demand response and renewable energy, which helps lower consumer costs. However, fossil fuel generators don’t like FEJA because it cuts into profits for their aging power plants. How do generators want to change […]

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Sign the petition to FERC: Refunds now!

Jim Chilsen — Tue, 12 Jan 2016 16:23:50 +0000

Federal regulators recently ordered changes to a yearly electricity auction that last summer sparked a 30 percent increase in power prices in Central and Southern Illinois. Now, it’s time to demand your money back for the egregious prices! Every year, the power grid operator in Central and Southern Illinois and 14 other states holds a yearly auction to determine “capacity” costs (fees that are wrapped up in your electricity price) for the next 12 months. In last spring’s auction, Illinois’ capacity cost was more than 40 times higher than the other 14 states. At the time, experts said the spike threatened customers with $130 in higher costs! It made no sense—Illinois has ample electricity, so why were its costs so much higher than neighboring states? The Illinois Attorney General, CUB and thousands of concerned CUB Action Network members urged the Federal Energy Regulatory Commission (FERC) to investigate and reform the market. In a positive development, FERC recently ordered key changes to auction rules to prevent dangerous price spikes in the future. But the battle’s not over. FERC is still investigating the spike, and the question over whether Central and Southern Illinois consumers should get refunds. “I am pleased with FERC’s decision to fix the auction rules, but FERC still needs to order refunds to consumers for the outrageously high prices,” Attorney General Lisa Madigan says. We think you deserve a refund, too. Please sign our petition asking FERC to order refunds for Central and Southern Illinois consumers.

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Higher electric bills again?

Jim Chilsen — Mon, 24 Aug 2015 11:19:36 +0000

Here we go again. For the second time in less than a year Illinois consumers—first in Central and Southern Illinois and now in Northern Illinois—face significantly higher electric bills because of a flawed power-pricing system. And while electric customers will take the hit, big power generators like Exelon, NRG and Dynegy stand to earn windfall profits. “Illinois’ electricity market is not working well for consumers,” CUB Executive Director David Kolata said in a statement. On August 21, PJM Interconnection—the power grid operator for northern Illinois and 13 other states—announced the results of an electricity auction that will increase power prices in Northern Illinois three years from now. CUB estimates the price could jack up costs for typical homes by more than $80 from June 1, 2018 to May 31, 2019. The increase could be even higher for customers with electric heat. Alternative supplier customers won’t escape higher prices, either, although the impact will vary by company. The increase is largely due to a change in rules in how electric “capacity” auctions are run by PJM. “Capacity costs” are what consumers pay to ensure power plants are able to deliver electricity on the highest-demand days. These costs show up in the “supply” portion of your electric bill. This year’s auction was held under new “Capacity Performance” rules designed to spur power generators to provide electricity during extremely cold weather, such as the Polar Vortex in 2014. (PJM said 22 percent of generation was unavailable to serve customers on the coldest day of the year in 2014.) Of course, keeping the lights on is important, but CUB has long argued that there are no guarantees that the extra money power generators receive will actually be used to make the system more reliable. One thing is for sure: Customers will be slapped with higher electric prices while generators are cashing their checks. (The Chicago Tribune cited industry experts who estimated that the higher capacity costs could bring ComEd-parent Exelon roughly $400 million in additional revenue over last year’s auction.) The auction results come on the tail of a similar auction this past spring by the power grid operator in Central and Southern Illinois, MISO, that sparked a 30 percent increase in power prices in that region. Given that Illinois has a surplus of power, these extreme prices are ridiculous. We need to figure out how to set prices more fairly. For more information, visit StopIllinoisRateHikes.org, and read CUB’s Q&A on the electricity auction here.

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