US Power Expect Positive PJM Milestones Upcoming

Research evidence excerpt

US Power Expect Positive PJM Milestones Upcoming

Global Research

8 July 2026ab

US Power Equities

AmericasExpect Positive PJM Milestones Upcoming

Electric Utilities

William Appicelli, CFA

What's Our Take? Analyst

A PJM filing this month with FERC on its reliability backstop procurement rules to service william.appicelli@ubs.com

large load represents a step in the process for providing clarity on power market supply +1-212-713 1414

and demand (see summary here). Anticipation of large load connection has helped Gregg Orrill

fundamentals in our view and can be seen in PJM West around the clock spark spreads Analyst

increases year-to-date of 24% for '27 and 21% for '28 year-to-date. We will also watch gregg.orrill@ubs.com

PJM capacity auction results for '28/'29 planing year on July 14th for the level of +1-212-713 1064

shortfall, where we see a midpoint 8 GW shortage to the procurement target for Steve Ludwick

reliability. IPP stock performance has seen increased dispersion over the past three Analyst

months, with TLN up 11% vs. VST relatively flat (down 1-2%) while NRG & CEG are steve.ludwick@ubs.com

both down 14-15%. We remain bullish on IPPs as we believe the value of installed +1-212-713 5073

generation is being understated in shares. Existing assets remain the most economical Allison Paik

way to service large load growth vs. new build for front of or behind the meter options. Associate Analyst

While we don't see a "silver bullet" in terms of regulatory outcomes to clear a path for allison.paik@ubs.com

additional contracts in the immediate term, we see positive momentum building. This +1-212-713 1078

stems from the FERC decisions in June and leading into the capacity auction and

updated PJM filing this month that should instill further confidence in the process for