2028/2029 PJM Capacity Auction Clears At $325/MWd Cap. What Are The Surprises?

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2028/2029 PJM Capacity Auction Clears At $325/MWd Cap. What Are The Surprises?

Power & Utilities

Equity Research

July 15, 2026

PJM Reliability Backstop Procurement (RBP) Auction AND Connect and Manage (C&M) filing

expected in coming weeks. PJM indicated that filings for both the Reliability Backstop Procurement

(RBP) framework and Connect & Manage (C&M) reforms are expected in the coming weeks,

suggesting the two initiatives may ultimately be filed together. The timing is noteworthy, as investors

had been expecting an imminent RBP filing following the PJM Board meeting on July 10 given the

compressed timeline for FERC approval and PJM's stated goal of conducting the backstop auction

this Fall. While stakeholders approved the RBP proposal on June 30, the continued delay has increased

speculation around C&M. Many investors had viewed C&M as effectively stalled or diluted down to be

ineffective.

As a reminder, PJM stakeholders approved the Joint Electric Distribution Companies (EDC)/Data

Center Coalition RBP proposal despite opposition from independent power producers (IPPs), while

none of the competing C&M proposals received sufficient support to advance. Importantly, PJM

Governors' Collaborative has advocated for C&M and mandatory curtailment provisions, with

governors recently criticizing efforts to weaken the interruptibility requirements embedded in prior

C&M constructs.

The latest PJM communication reinforces our view that C&M remains very much alive despite growing

investor skepticism. We continue to view C&M as a negative development for IPPs. Notably, a key element of

the merchant power bull thesis, and particularly the Talen (TLN) investment case, has been the assumption

that C&M and mandatory curtailment proposals were effectively dead.