EAGLEVILLE, PA — Wholesale electricity prices across the PJM Interconnection rose sharply in the first nine months of 2025, according to a new report from Monitoring Analytics, the independent market monitor for the 13-state grid operator. While the energy market remained broadly competitive, the monitor found that recent capacity auctions were not — a result that could shape future power costs for millions of customers.
The report shows the real-time load-weighted average locational marginal price climbed to $50.51 per megawatt-hour, up 47% from the same period in 2024. Fuel and consumable costs accounted for most of the increase, while transmission penalties and scarcity pricing also contributed.
“The results of the PJM Energy Market were competitive in the first nine months of 2025,” market monitor Joseph Bowring said. “Our analysis concludes that the results of the capacity market auctions for the 2025/2026 and 2026/2027 Delivery Years were not competitive.”
Total wholesale power costs rose 44% year over year, reaching $79.28 per MWh. Energy costs made up the largest share at 61%, followed by transmission at 23% and capacity at 14%. Capacity costs, in particular, surged more than 200% from a year earlier.
Load across PJM grew 3% as the region hit new winter and summer peaks. Generation trends shifted as well: coal output rose 16%, oil-fired production jumped 26%, and solar generation increased 46%. Natural gas output dipped slightly, while wind saw modest gains.
Returns for theoretical new generation increased across every technology type, including a 148% jump for coal, 46% for nuclear, and nearly 280% for diesel. The monitor uses net revenue estimates as a signal of investment incentives and overall market performance.
The report also flagged concerns about congestion and uplift costs. Uplift charges — payments made to generators outside of market prices — more than tripled to $660.5 million. Meanwhile, congestion costs climbed 61%, reaching $2.23 billion. Of the congestion costs paid by customers so far in the 2025–26 planning period, just 66.6% has been returned through financial transmission rights, far below the level the monitor says should occur under effective market design.
The monitor noted that, from 2011 through early 2025, customers received $5.4 billion less in congestion revenue than they should have, citing structural flaws in PJM’s FTR market.
Monitoring Analytics said it will continue recommending market rule improvements and assessing participant behavior to safeguard competition across PJM’s markets.
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