外媒外刊-一派胡言：PJM的120亿美元建模错误-Full of Cold Air-PJM's $12B modeling mistake-20260816

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FullofColdAir-PJM's$12Bmodelingmistake

RobertBoswall,ReykKnuhtsen,JeremieEliahouOntiveros,OliverKennon,DylanPatelAugust16,2026

Earlierthisyear,weexplainedwhyresidentsofthePJMarea,America'slargestelectricitymarket,haveseentheirpowerbillsriseby~20%.Wearguedthatthemainculpritwas

PJM'sauctiondesignchoicesandhowPJMmodelsdemandandsupply.Tobetter

understandtheextentoftheproblem,ourEnergyModelteamspentthelast6months

reverse-engineeringPJM'smainsystemmodel,the'ReserveRequirementStudy’,whichtodatehasbeenablackbox.ThisstudyishowPJMdecideswhattypeofandhowmany

powerplantstobuytomakesureelectricityisreliable,usinganannualauction,andspendingbillionseachyear.

Armedwithareconstructedmodelwearguethattheproblemisworsethanwethought.

PJM'smodelincludeserrorsthatweestimatehavecostallofits66millionresidentsatotalof$12Bbetween2025and2027alone.Weshareourmethodintheannexofthis

newsletterforoursubscribers:aswellastheresultsofthemodelinourPJMModel

dashboard.OurliverebuildoftheReserveRequirementModelisatabavailable

exclusivelytoourEnergyModelclients;whichalsoincludesaquarter-by-quarterforecastofthewholeUSgridtracking>40,000grid-connectedpowerplants,andeverysingle

behind-the-meterdatacenterpowerorder.

PJM'smodelisstructurallyanti-growthwithapoorlydesignedcapacitymarketthatisgloballyuniqueandagovernancesystemthatistoobigtofunction.

Thesefailingsmagnifythenegativeimpactofbadsystemmodeling,whichisthefocusofthisreport:

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1.PJMunderestimatesby~4gigawattstheexistingpowerplantsitalreadyhas;owingtoamethodologywhichdoesn'taccountforthehigherefficiencyofpowerplantsin

winterandimprovedpowerplantresiliencesinceStormElliott.

2.PJMhaswasted~$12billionofratepayers'moneyfrom2025to2027duetothis

weakmethodology,whichdramaticallyoverstatedthesupply/demandshortfallitfaced.HouseholdelectricitybillswouldhaverisenmuchlessifPJM'smodelwasaccurate.

3.PJM'semergencyauctionisputtingratepayersatriskbysigningcontractsfortoomuchpowerwithoutcommittedcounter-parties.

PJMCapacityBills,Winter-CorrectedPaidperdeliveryyear,Sbnnominal

semiánalysis

Sources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel

$T1.6bnovercharged

acrossthetwouncappedyears

$16.4bnpaid

Atcap:

$0saved

bymechanism

$16.1bnpaid

$16.4bnpaid

$14.7bnpaid

Atcap:

$4.9bnsaved

$Osaved

$6.7bnsaved10

bymechanism

S71.2bn

CorrectedBill

$8.0bn

CorrectedBill

2026/27

$329atcap

2027/28

$333atcap

2025/26

Cleared$270/MW-day

2028/29$325atcap

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

UsingPJM'sdemandandsupplycurveswecalculatethatbettermodelingwouldhaveresultedin$6.7Bofsavingswithonly0.014GW(yes,14MW)lesspowerprocuredfor

2025/26;then$4.9Band0.8GWfor2026/27.Morepowermeaninglessinsavingsmightbecounter-intuitivebutwehavethesupplyanddemandcurvestoshowhowthese

disproportionateimpactsoccur.PJMhasforceditselfintooperatingatthelimit,so

inaccuratelymodelingpowerplants'capacitieshasamassiveimpactonauctioncosts.

PJMhasconstraineditsownsupplyofnewpowerbyhavingone-yearcontractsthatstarttoosoonaftertheyaresigned,aswellasbeingslowtoconnectthesenewplantstothegrid.Thismeansfulfillinganydemandgrowthrequirespayingabigpremiumfornew

powerplantstobebuiltatunrealisticspeeds.PJMalsorunstheonlycapacitymarketintheworldthatdoesnotdistinguishbetweennewandexistingpowerplants.Sothat

premiumpaidfornewpowerplantsisalsopaidtoexistingpowerplantsfordoingnothing.Thesamegrowthinamarketthatsplitsnewandexistingpowerplantauctionsavoidsthe

3/33

volumeeffectofrepricingtheentirefleet;whichmeansratepayersarebetterprotectedfrompricespikes.

Despitefourrecord-breakingauctionscosting$63B,PJMwillbeshortoftheamountof

generationitneedstorunreliably,andplanstorunan“emergencyauction”from

September30thtoOctober21stwithresultsbyDecember2nd.SemiAnalysisconcludesthereisanadditional3.8GWofreliablepoweronPJM'ssystembytakingintoaccount

increasedturbineefficiencyfromcoldair,andreducedriskofwinterfailureafterfederallymandatedassetwinterizationinvestments.Thisistheequivalentofeightlargegaspowerplantswhichwouldcostaround$10billiontobuildtoday.This3.8GWwouldnegate56%ofthe6.8GWthatPJMplanstoprocureinitsemergencyauction.

2009

TheLastFourAuctionsCost$63.9Billion

All-incapacityrevenuebydeliveryyear,nominalSbn(bars);auctionclearingprice,S/MW-day(dots)Revenueperthemarketmonitor's2025StateoftheMarketreport;2028/29isauctionrevenueonlySources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel

S10B

2016/T

semiánclysis

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

PJM'semergencyauctionpresentsseriousrisks,itwillsigncontractsrunningto2043thataresupposedtobepaidforbynewlargeloads.Thesearenotsalesofelectricity;the

plantsgetpaidjustforexisting,whetherornottheforecastdemandeverarrives.ButPJMisdoingthiswithnocommittedcounter-parties.PJMdoesnothaveitsownmoney,

everythingitspendsisfromratepayers.

EveryPJMstatewillhavetopass(butnonehavedonesoyet)theirowncost-allocation

policytopassoncoststoparticipatingnewlargeloads.Butthoselargeloadscanoptoutiftheycontracttheirownadditionalpowerplantsdirectly.Iftheyparticipatethereislittle

clarityonhowmuchoftheauction'scapacitytheyareexpectedtopayfor.Participation

bringsnootherbenefits,likeacceleratedinterconnectiontimelines.Manydatacenter

developershavewrittenoffPJMregardless,goingelsewhereorplanningbehind-the-meter

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【价值目录】网整理：

powerconfigurations.Ifnoothercounter-partyemerges,thenonceagainthoseleftholdingthebagwillbetheresidentialratepayers.

Inthisreport,wediveintoPJM’scapacitymarketandintroduceourproprietaryreverse-engineeredmodel.WebelievethatPJMfailstoaccuratelymodeltwocriticalsupply

characteristics,despitekeystakeholdersrecognizingthemtobebothrealandofimportance:

1.PJMdoesnotcredithowcold,denseairmakesgasplantsstrongerelectricitygeneratorsbyupto25%inwinter;and

2.PJM’sriskcalculationshavenotbeenupdatedtorecognizethataslongagoas2024,400ofPJM’s~700gasplantshadinvestedinwinterreliabilitymeasuresinresponsetotheoutagesfromStormElliott.

TherearedeeperproblemsatPJMthanjustmodeling.Itscurrentauctionsweredesignedtwodecadesago,andithasnotexperienceddemandgrowthsince.TodayPJMis

structurallyanti-growth.PJMisfailingtoadapttothisneweraofloadgrowthbecauseofagovernance

deadlock

,avetocracyofvestedinterests.Ifitcannotachievemarketreformperhapsitcanstemtheratepayerbleedingbyimprovinghowcapacityismodeled,

especiallywhenwinteriscoming.

ThisreportwilldigdeepintoPJM’scapacitymarket.Afterprovidingsomeintroductorycontext,weadoptthefollowingstructure:

WestartwiththefundamentalsandexplainhowPJMmodelssupply,demand,andreliabilityrisks.Wecovertheirmajormodelingmethodologychangein2024fromEFORdtoReserveRequirementStudyandtheimplicationsofthatchange.

Weintroduceourreverse-engineeredmodelandcoveringreaterdepthhowwecalculatetheroleofvariousresources,outages,reliability,andfleetsize.

Wegettothecoreissue:PJM’slackofconsiderationoftheincreasedthroughputofgaspowerplantsinthewinter,andtheirimprovedreliabilitythroughAsset

Winterization.

Wethendiveintothepricingimpact.PJM’scapacityauctionsarehighlycomplexandweexplainwhyandhowPJM’s66Mresidents’electricitybillswere$12Bhigherthantheyneededtobe.

Lastly,weprovidesomethoughtsonthefutureofPJManditsupcomingReliability

BackstopAuction.Thisisanemergencymechanismhopingfordatacenterstopayfortheirowncapacity.Webelievethatratepayerscould,again,beatrisk.

Let’sgo.

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【价值目录】网整理：

ThisreportisacollaborationbetweenSemiAnalysisandNathanIyerinhispersonalcapacity.

Context

Ifyouhavenotbeenfollowingalong,letuscatchyouup:

PowerbillsinPJMstatesjumped17-24%inJune2025,andthestateregulatorslabeledthecapacityauctionasthemaindriver.Readour

PJMvsERCOT

articletounderstandPJM’scapacityauction,andhowsingularitisrelativetootherenergymarkets.

PJMconstrainsitsownsupplyofnewpowerplantsbyrequiringthemtobebuiltunrealisticallyquicklyandnotevenacceleratingthegridconnectionsofcriticalprojects.Thisconstrainedsupplygreatlyincreasespricesintheauction.

PJM’scapacityauctionsrestartedinJuly2024afterextendeddelays.Thiscuttheleadtimefornewgenerationtogetbuiltfromtheintended36months(pertheIndependentMarketMonitor)to10months,risingtoonly23monthsforthelatestauction.Power

plantstaketimetobuildandneedlongtermvisibilitysogivingonlya23-monthleadtimemakesitnearimpossibletobuildnewgeneration.

Thefourauctionssincehaveeachprocured134-138GWayearofaccreditedcapacityatpricesthatjumpedfrom

$28.92

beforethedelayto$270-333permegawatt-day,

raisingthecostofacapacityauctionfrom$2.2Bto$16.4B,andthefour-auctiontotalto$63.6B.

ThismoneyispaidbyeverysinglehouseholdandbusinessinthePJMarea,andis

littlemorethanatransferfromratepayerstoexistingpowerplantsasoverthelastfourauctionsonly4.8GWofnewcapacityhasbeenprocured.

Alreadybuiltcapacitydoesnotneed$325/MW-day:PJM’sownmarketmonitorsaysexistinggeneratorsbidat

$8-14/MW-day

,andGreatBritain’slatestauctionpaid

existinggeneration$18/MW-day(£5/kW-year).

Thesegasplantsdonotneedthemoneytostayonline.Themedianexisting

combinedcyclemade

407%

ofitsgoing-forwardcostsintheenergyandancillaryservicesmarketsalonein2025,beforeadollarofcapacityrevenue.

PJMpreventednewprojectsfromgettingagridconnection.FromOctober2021therewasnostudypathwhilePJMclearedits

backlog

;ageneralapplicationwindowdidnotreopenuntilApril2026,when

220GWapplied

.

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·NowPJMhastwounder-performinginterconnectionfast-tracks:1.TheReliability.

ResourceInitiative,51shovel-readyprojectspickedMay2025,now41with31.5%ofthemegawattswithdrawn,firstoutputscheduled2030;2.The10-units-a-year

ExpeditedTrackopenedJuly31,2026.Neitherhasenergizedasinglemegawatt.

·PJMcannotreformitself:rulechangesneedatwo-thirdsmajorityacrossfiveequallyweightedmembersectors,soanytwosectorscanvetoanything,andtheyoftendo.TheBoardcanoverridedependingonthereformbuthaschosennottoonthese

problems.

·FERChasnowgivenPJMuntiltheendofSeptembertoreformitsgovernance

otherwiseFERCwillintervene.ButFERCmainlyhasreactiveratherthanproactivepowersandthisthreatisnotstrictlyaboutthecapacityauctionsormodeling.

·PJMisalsotheonlymarketintheworldwherethecapacityauctionpriceisforthewholegenerationstack.Japanwasthelastothermarkettopricethewholefleetononeyeartermsbuthasnowconcludedthedesignbuildsnothingandboltedonaseparate20-yearauctionfornewentries.

Lead

semicnalysis

2025/26

~10mo

$270

135.7

14.7

0.9

96%

2026/27

~10mo

(at

cap)

134.2

16.1

2.7

98%

2027/28

~18mo

(at

cap)

134.5

16.4

0.8

99%

2028/29

~23mo

(at

cap)

138.3

16.4

0.5

98.5-99.4%

Total

63.6

4.8

~98%

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

Action

FERCisacceptingcommentsonPJM'sbackstopfiling,until21stAugust.Anyonemay

participateat.SemiAnalysiswillbesubmittingthisanalysis.We

encourageotherstodothesameandwewelcomeanyinputonthemodel,pleasewritetousatenergy@.

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【价值目录】网整理：

WealsoencouragePJM’sBoardtofileimprovedmodelingcriteriaatFERCtochangethetariffandReliabilityAssuranceAgreement,throughthesamefast-pathprocessitusedtoinstallthecurrentrulesin2023andtolaunchthebackstopthisJuly.FERCmustacceptitifitisjustandreasonable,andFERCacceptedseasonalaccreditationatMISOin2022.Thewinter-ratingstextwas

written

inPackageCinAugust2025,passedbyPJM’sowntask

force,butwasnotpassedbytheseniorcommittee.TheBoardcanpickituptomorrow.

Creditingmandatedwinterizationhasnotbeendrafted.Theclosestattemptwasthe

marketmonitor’sblunter

version

todeletethestormdataoutright,whichwasrefusedinthesamesession.FERCshouldrequirethattheemergencyauction’s6.8GWtargetbe

recalculatedbeforePJMsignscontractsthatwilllastuntil2043.

Ourmainrecommendationsare:

1.Thesemodelingrecommendationsshouldbeimplementedfortheemergencyauctionaswellasfutureauctions;

2.Thereshouldbeaninquiryintotheoverspendingofratepayers’moneyinthe2025/26and2026/27auctions;and

3.Auctionsforexistingvsnewcapacityshouldbesplit.

Ourmorelooselyheldthoughtsare:

1.TheEmergencyAuctionshouldprobablybecanceledforposingtoogreatariskto

ratepayersifnewlargeloadsdonotarrive,insteadonlyusedirectcapacitycontractingaspartofacceleratedinterconnectionagreements;and

2.IftheEmergencyAuctioniskepttomakeuptheshortfallitshouldbepaidforbyexistingdemandwithashorttermfixoffurtherloweringthepricecapfortheBaseResidualAuction,thiswouldeffectivelycreateseparateexistingandnewcapacityauctions.

3.Datacentersarehowelectricitycanbecomecheaperthaneverbeforebypayingdownhighsystemcostsusingeconomiesofscaleandunprecedentedvaluecreation.To

attractmoredatacentersandachievethisaffordableenergyfutureStateGovernors

andcustomeradvocatesneedtofocusonthebureaucraticfailurestocreatefunctionalmarkets.

1.PJMunderestimatesthepowerplantsitalreadyhasby~4gigawattsofreliablepower

ForaprimeronPJM’scapacitymarketandauctions,readourprevious

report

.AsaTLDR:PJMactsasacentralplannerandrunsauctionstoensurethereisenoughsupplytomeetpeakdemand,withasafetybuffer.PJMmadeitsplanningmoresophisticatedin2024,but

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【价值目录】网整理：

duetofailedstakeholdervotes,didnotincludeimportantinputs.TheresultofleavingouttheseinputsisthatPJMoverestimatessystemriskduringwintermonthswhichleadsto

tryingtoprocuretoomanynewpowerplantsasbackup.ButPJMalsohasaconstrainedsupplyofnewpowerplantswhichleadstopricespikes,tryingbutfailingtofixthisscarcity.

Thingsweren’talwaysthisway.

In2024,thesameyearthecapacityauctionpricesfirstspiked,PJMoverhauledtheir

resourceadequacymodeling.Previously,thePJMsystemoperatedunderasystemcalled“EquivalentDemandForcedOutageRate”orEFORd.Thecapacitytargetwassetby

takingthepeakdemandandaddingamarginbasedonthechanceageneratormightbeoffline.However,thissystemisnotabletoeffectivelycapturecorrelatedfailures,whicharemorecommonincoldwintermonthsfornaturalgaspowerplants.Italsofailstoaccountfornewertechnologiesonthegrid.Specificallyvariableresourceswhichrequiremodelingonatleastanhourlybasistocapturetheircontributionstocapacity.Theseareintermittentgenerationsuchaswind,solar,orrun-of-riverhydro;aswellas‘limited’

resources,likestorageofallkinds.

Theselimitationscametolightin2022.DuringWinterStormElliott,PJMlost

24%

ofitstotalgenerationduetoforcedoutagesandderates,andtwothirdsofthelosscamefromnaturalgasgenerators.StormElliottledtoasubstantialoverhauloftheReserve

RequirementStudymakingitintoanhourlyriskframework.InthisstudyPJMmodels

demandagainstsupplyforeveryhouroftheyearforanumberoftheoreticalyears,usingbothhistoricandforecast-basedrandomizeddata.Thismoredetailedapproachidentifiedthatatcertaintimesoftheyearthereisnotenoughsupplyrelativetodemand.

Asaresult,gasinparticularsuffereda10-20%knock-down.Thesetwochangeshada

largesystemimpact,clearedcapacityfellby8%(12GWfrom147GWto135GW)betweentheauctionsfor2024/25and2025/26.Itisasifthesystemlostascoreoflargepower

plants.ThecapacityauctionshavebeenexpensivesincePJMbasicallyhadtobuyreplacementplants.

9/33

GasCombinedCycleCreditFellFrom95%to74%PJMELCCclassratingsbydeliveryyear,%ofnameplatecredited

Sources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel

MarginalMethodStarts(2025/26)

-GasCombinedCycle

20

2023/242024/252025/262026/272027/28

semiánalysis

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

TheshiftfromasummerrisksystemtoawinterrisksystemisamuchbiggerdealinPJM.Ithasonecentralauction,versusothercapacitymarkets,whichinsteaddistinguish

specificallybetweenwinterandsummer.ForPJM,awinterrisksystemdegradesthe

reliabilityvalueofstrongersummerresources(e.g.solarandstoragewhichcanbridgeafternoonpeaks),andenhancesthestrongerwinterresources(e.g.nuclear,coal).Evenaminorimprovementinwintergasriskcanhaverippleeffectsacrosseveryresource,withmajorcommercialimplications.

Thestudy'shourlymatchingagainstweatheranddemandscenariosdefineshoweach

newgeneratorimprovesreliabilityofthesystem.Tomanythisnewsystemisablackbox.PJM,toitscredit,publishesaportionofitsworkanddata.ItiscomplexbutitsnuancesareimportantforunderstandingPJM'scurrentproblems.Withwhich,combinedwithother

publicdata,wehavegivenourbestshotatreconstructingthemodelandscrutinizingitsinnerworkings.Indoingso,we'veidentifiedandcorroboratedanumberofweaknessesthatareofgreatimportancetorecentpricespikes;reliabilityconcerns;andtheupcomingbackstopauction.

TheReserveRequirementStudy

PJM'snew(ish)systemoverestimatestheriskinwintermonthswhichleadstooverbuildingpowerplants.Ourmodelre-runstheReserveRequirementStudyonthesamewhole-

systembasisPJMuses.Ourconclusionisthatthesamefleetisworthmorereliable

capacitythanPJMcreditsit,sotheauctionrequirementagainsttotalelectricitydemandfalls.

10/33

WhilePJMmodelsdemandwithitsyear-roundvariations,itcapssupplyatgenerators'

summeraccreditations.Ononehand,thatmakessenseasPJMisasummerpeaking

system.Thereismoreairconditioningelectricitydemandinthesummerthanthereis

heatingdemandinthewinter,andsothehighestdemandpointsintheyearareinsummer.Evenwhennettedoffagainsttheincreasedoutputofsolar,thedemandforreliablepowerplantsisstillhigherinthesummerthanitisinthewinter.

Ontheotherhand,historicallyfailureratesofgenerationaremuchhigherinthewinter,tendtobecorrelatedacrossfleets,andalignedwithperiodsofhighestdemand.Higherfailureratesmeanthatwintercanbethemostprobabletimeforsupplytofallshortof

demand.Gasislessreliableinwinterasstormscancausethemalltofreezeatthesametime,asseenwiththePolarVortexandStormElliott.

ThistypeofwinterriskisrecognizedinPJM'smodelingbutthedetailsareoutofdateandlackprecision.Theydonotconsiderhowcoldimprovestheoperationsoftheplantsthatdonotfail,orhowplantshavehardenedthemselvesagainsttheweatherinrecentyears.

FixWinterandtheSameMachinesRe-Rate

Capacitycreditbyresourceclass,%ofnameplate,PJMmarginalaccreditationmethod,2028/29

Sources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel

sales@

semicnalysis

MachineavailabilityPJMposted2028/29●Riskinsummer(afterwinterfixes)

Storage

GasCT

GasCC

Steam

Solar

Dependsonwhen

OilCT

WTESteam

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

PJMuseshistoricaldataforperformance.Thismeansthatfaresourcefaltersonetime,theonlywaytoincreasereliabilityistowaitoveradecadetoflushtheeventoutofthe

system.Noamountofinvestments,regulations,orassurancescanliftthisjudgment.Asa

11/33

result,thelargestdriverofreliabilityrisktothisdaywasdrivenbyapolarvortexin2013andthesecondisStormElliottin2022.

TwoWintersCarry72%oftheRisk

Shareofexpectedshortfallenergy(EUE)byweatheryear,%;committed2028/29fleetWeatheryearsrunJunetoMay;sharesroundindependently;onefrozenmodelrun

Sources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel

POLARVORTEX201374

STORMELLIOTT2022/23

2012

4.5%

■Winter-drivenyear

3.2%

2.5%

1.8%

1.7%

1.6%

1.5%

1.3%

2015

2024

2018

2016

2021

2014

2023

2020

2019

2017

semicnalysis

■Summer-drivenyear

2013

2022

47.9%

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

Self-Supply

Whyaren'tPJMratepayersbetterprotectedfrompriceswings?Inmostotherpower

markets,retailcustomershavelong-termcontractswithutilitiesandarenotexposedtoyearlycapacitymarketchanges.Themarketnextdoor,MISO,alsoexperienced

substantialcapacityswings,butthevastmajorityofhouseholdswereunaffectedbecauseutilitieshadlong-termcontracts.

ThereareanumberofreasonsPJMissoall-or-nothing,butitcomesdowntoa

combinationofretailchoiceandderegulation(shorterandlesscertaincontracts),a

SupremeCourtcasethatstruckdownstateeffortstosupportlong-termcontracts,andalong-standingFERCfightthatboileddowntoapartisanbattlebetweenresource

preferences.

Theothermainoptionremainingisforutilitiestoprocureenoughcapacityforthemselvesandtheneffectivelyejectthemselvesfullyfromthecapacitymarketfor5years.Thisshowsuponthecapacitymarketsasbigswings,butendsupbeingrelativelyneutralimpacts

becausethesupplyanddemandimpactisbalanced.

FleetUncertainty

12/33

WhiledataforPJM'soverallfleetisrelativelytransparentanddrivestheirriskmodel,theauctionitselfdivergesinoftenunpredictablewaysandcannotbefullyreplicated.

TheReserveRequirementStudyisbiggerthanjusttheBaseResidualAuction,assomeutilities'self-supply'.TheFixedResourceRequirement(FRR)alternativeallowsutilitiestooptoutoftheauctionandfiletheirowncapacityplans,withanobligationsetbytheirshareofload,whichis~8%ofthePJMsystem(e.g.12GWfor2026/27).

SoPJM'sReserveRequirementStudymodelsan‘AssumedFleet,andproducesawhole-systemnumber(e.g.146GWofreliablecapacityfor2026/27).Theauction'stargetistherequirementminustheself-supplyobligation(e.g.134GWfor2026/27).

TheCommittedFleetistheresultoftheauctionandself-supply.In2026/27theauctioncleared134.3GW,0.2GWshortofitstarget,whiletheself-supplyplanscommitted12GW,about0.3GWmorethantheirobligation.Thesystemendedtheauction0.1GWabovethewhole-systemrequirement,butonlybecauseself-supplyover-deliveredbymorethantheauctionmissed.Behindallofthissitsthetotalfleet,thepowerplantsthatphysicallyexist.

TheRequirementHasOutgrownPJM'sCommittedFleetGW,byauctiondeliveryyear

Sources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel·

■Self-Supply(FRR)■AssumedAdditional

156.0

2027/28

semianalysis

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

13/33

PJMSupplyvsDemand,FleetbyFuel

Capacity,GW.Leftbar:totalfleet(ICAP).Rightbar:committedfleet(UCAP,planbasis).Amberdot:demand(forecastpeak).Whitediamond:requiredcapacity.

Sources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel

COAL

NUCLEAR

TOTALFLEETCOMMITTED

2025/262026/27

semianalysis

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

Reverse-EngineeringtheModel

Togettherealnumbersweneededtorebuildthemodelinfull.SowetookPJM'sManual,whichexplainshowtheydothisstudyandturneditintocode.Thenweranonthatcode

theweather,demand,andgenerationdatathattheypublish.Fordatathattheydonotgiveweusedpubliclyavailableproxies,mainlyfromtheU.S.EnergyInformationAdministration.WegotahighlevelofaccuracytotheoutputsthatPJMpublishesacrossthelastfour

auctions.ThedetailedstepbystepisincludedintheMethodologyAnnexofthisnewslettertohelpsubscriberswhowishestorecreateorauditourwork.

ModelReconstructionsvsPJMPublishedValues

Committed2028/29planningquantities,MWanddaysperyear

TheenginelandswithinatwentiethofapercentofPJM'spublishedanswers

semianclysis

Quantity

Model

Solvedpeakload(2028/29)PJMpublishedsolvedpeak

162,107MW

+44MW(+0.03%)

Reliabilityrequirement(UCAP)PJMpublishedrequirement

156,013MW

155,938MW

-75MW(-0.05%)

Committed-fleetLOLESourcepacket'sownrun

0.487days/yr

0.478days/yr

-0.009(-1.85%)

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

Improvingthemodel

Intheauctionfor2026/27,coldairupliftaloneshouldhavereducedtherequiredcapacityby1.5GWandweatherizationalone2.5GWatonly60%.Togethertheywouldhavebeen

14/33

worth3.1GWasthereisasignificantoverlapbetweentheireffects.

PJMAuctionRequirements,Winter-Corrected

semiánclysis

Sources:SemiAnalysisEnergyModel,SemiAnalysisPJMModel

140

2025/26(50%)2027/28(70%)

2028/29(80%)

Sources:SemiAnalysisEnergyModel;SemiAnalysisPJMModel

WecalculatedthisbyusingourreconstructedReserveRequirementStudytotesthow

muchtheoutputswouldchangeifwealteredtwoinputassumptionsthathavebeenwidelydebatedandpreviouslyproposed:creditingcoldairupliftandassetwinterizat