IPPs: What to Watch Into the 2028/2029 PJM BRA

Research evidence excerpt

IPPs: What to Watch Into the 2028/2029 PJM BRA

Energy | Power & Utilities

July 07, 2026

Nicholas Amicucci, CFA IPPs: What to Watch Into the 2028/2029

212-812-2931

nicholas.amicucci@evercoreisi.com PJM BRA

Sharon Wang PJM's next Base Residual Auction (BRA), covering the 2028/2029

212-653-8999 delivery year, is expected to post results after 4 p.m. on July 14, with

Sharon.Wang@evercoreisi.com the bidding window having run June 30 through July 7. A heat-wave

reliability stress over the July 3-4 stretch is a timely reminder of

how tight the system has become heading into the auction results

(additional details on page 2). Under the price collar that FERC

extended to cover this auction, we expect the headline clearing

price to come in at or near the top of the collar, roughly $335/MW-

day. PJM itself notes that under the cap and floor prices are unlikely to

change much year to year, so the headline is supportive of a

constructive longer-term IPP outlook but is not the surprise variable.

The more important read is the uncapped clearing price, meaning

what the auction would have cleared had the collar not been in

place. On PJM's own estimate, that figure was roughly $530/MW-day

last time. A level above it would be consistent with demand continuing

to outpace supply, which is our expectation. As a framework, we

estimate a U-Cap (Uncapped Clearing Price) >$600/MW-day likely

yields a positive MSD share price move, while a U-Cap >$700/MW-day

yields an incrementally more positive result, based on prior auction

reaction. We expect the strongest directional read-through for TLN,

CEG, NRG and PEG, roughly in that order, based on merchant

exposure to PJM. Unlike the December auction, we do not expect

the same sell-off into the event, based solely on auction result

expectations.