PowerPoints: PJM Power/Capacity, Inflation, HE LNG, PEG NJ, & ORCL/WEC

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PowerPoints: PJM Power/Capacity, Inflation, HE LNG, PEG NJ, & ORCL/WEC

NORTH AMERICA | Power & Utilities EquityJulyResearch14, 2026

PowerPoints: PJM Power/Capacity, Inflation, HE PJM spark spread strength is positive for TLN

and PEG but Texas weakness is an offsetLNG, PEG NJ, & ORCL/WEC for VST and NRG. Note that the PPL and

PJM hits record power demand, driving higher forward pricing. PJM gross PSEG zones have not had the same benefit

as PJM West. It is also important to watch

avoidable costs a longer-term focus. PJM 2028/2029 auction should clear the 2028 and 2029 dynamics where 2029 has

at the cap with ~$540/MW-Day uncapped level. Favorable CPI inflation with performed better than 2028. Don't expect any

electric declining. Hawaii LNG import efforts an area to watch on. NJ regulatory capacity auction result surprises - if anything

discussion reinforces that affordability is the most important topic. MDU 1H slight downside risk as nothing better than

cap possible.weakness points to bottom-half FY26

Exhibit 1 - PJM and Texas 2028 and 2029

Spark SpreadsPower: PJM hits new record demand, before demand response. Positive driver of prices.

PJM quantified recent peak load stats: 168.2GW "Preliminary Unrestricted Peak Load", 162.7GW

"Preliminary Instantaneous Peak Load", and 149GW Net Load Forecast. We attribute at least some

of the strength in PJM power to early July demand being +4% better than PJM's projections coming into

the summer, as defined by the instantaneous peak. A growing capacity shortfall would also lead to an

increasing eventual need for a subsequent Reliability Backstop Procurement (RBP) but is net positive

.

for IPPs. Source: Bloomberg & Company Filings

Power: PJM gross avoidable costs (ACR) refresh with gas CT at $66/MW-Day. PJM recently