On December 17, 2025, PJM Interconnection announced the results of its annual capacity auction to secure enough electricity for the 12-month period beginning June 1, 2027.
The capacity auction, called the Base Residual Auction, is a PJM planning function to ensure there will be sufficient power supply to meet future demand, with capacity payments designed to keep generation resources available.
What the Results Mean
The most recent auction for the 2027/2028 delivery year cleared at prices similar to the prior year. Prices remain considerably elevated relative to historical average capacity prices in PJM. These historic highs have translated to rising bills for customers and are driven by a growing gap between available energy supply and skyrocketing demand.
Capacity prices act as a type of insurance for grid reliability under changing circumstances, including increases in demand and extreme weather conditions. In short, there’s a tightening supply-demand balance driven by increased electricity use, generator retirements, and transmission constraints.
How This Impacts PECO Customers
These prices will affect customer supply charges in June 2027. While the PJM clearing price slightly increased year over year, a typical PECO residential customer using 700 kWh per month, this means a decrease of approximately $0.30 — or 0.19 percent — on their monthly bill, all else being equal.
The latest PJM auction results show a narrow decrease in wholesale capacity prices, offering some near-term relief in a market that has placed growing pressure on working families and small businesses. While any reduction in overall costs is encouraging, we know customers are still navigating a challenging affordability environment, and we remain focused on keeping bills as low and predictable as possible.
Important to note: These higher prices do not result in additional revenue for PECO, as the company does not own generation assets. The increase does not get paid to PECO. The end payment is to suppliers from which PECO purchases electric generation on behalf of PECO’s default customers. These suppliers are not affiliated with PECO or Exelon. This is not an increase to PECO’s energy delivery rates, which are set by the Pennsylvania Public Utility Commission.
What PECO Is Doing
The recent PJM capacity auction results underscore a critical need for strategic investments across the PJM footprint, including in the PECO service territory. The elevated price levels reflect both a scarcity of resources and transmission constraints.
Even with PECO’s ongoing investments, including nearly $10 billion over the next five years to upgrade the energy grid, additional transmission projects, along with investment in energy efficiency, distributed energy resources like solar and battery storage, and demand response are still needed to ensure the strength and reliability of the energy grid now and in the foreseeable future.
We are prioritizing transmission investments to help alleviate constraints, and we remain committed to working collaboratively to develop solutions that bring additional supply to the market and support demand-side measures, all while complementing existing market structures.
You can read more about our efforts on our efforts to provide affordable, reliable energy here.
How We’re Helping Customers
PECO connects customers to direct assistance, energy efficiency programs, and flexible payment plans that can help ease the burden:
- Energy efficiency programs: We offer free, at-home energy efficiency assessments to identify opportunities to improve usage.
- Assistance programs: We connect customers with available state, federal, and local assistance programs that make a difference on monthly bills.
- Customer Relief Fund: We’ve expanded support through our Customer Relief Fund, providing direct relief to customers in need.
- Flexible payment plans: We offer payment arrangements to help customers manage their bills.
We want to ensure customers are well-informed about the factors affecting their bill so they can better understand rates and consider all potential ways to save energy and money.
Learn more at peco.com/BillSupport where you’ll find additional information on understanding your energy bill, rates, and more.