Constellation Energy's Power Plants Clear PJM Capacity Auction for 2026-2027 Planning Year

Constellation Energy reported that its power plants in the PJM market cleared the capacity auction for the 2026-2027 planning year. Each nuclear unit cleared the auction, and capacity revenues are included in the gross receipts calculation for the Production Tax Credit. Constellation shares are up 4% to $330.50 in pre-market trading.

Constellation Energy Corporation (CEG) announced that all of its power plants in the PJM market successfully cleared the capacity auction for the 2026-2027 planning year. This achievement, effective June 1, 2026, includes approximately 6,200 megawatts of ComEd nuclear capacity participating in the Illinois Carbon Mitigation Credit Procurement Plan [1].

The auction results are significant for CEG as they indicate strong market positioning and potential revenue streams from capacity revenues included in the gross receipts calculation for the Production Tax Credit. The company's shares have risen 4% to $330.50 in pre-market trading, reflecting investor confidence in the company's ability to navigate the competitive energy market [1].

The capacity auction hit a record high price cap of $329.17/MW-day, up 22% from the previous year, due to tight supply and demand conditions in the PJM region. The auction's high prices are a sign of increased demand, particularly from data centers, which are major consumers of electricity [2].

Constellation Energy's success in the auction comes amidst a backdrop of market consolidation and regulatory challenges. The company's plans to buy Calpine and its ongoing efforts to restart the Unit 1 reactor at the Three Mile Island nuclear power plant demonstrate a strategic focus on growth and market positioning [3]. However, the high valuation and negative cash flow present risks that analysts have noted [1].

The latest auction results highlight the ongoing challenges in the power sector, with high capacity prices and consolidation trends affecting PJM. While power plant owners like Constellation and others have hailed the results, consumer advocates have criticized the rising costs passed on to ratepayers [2].

Constellation Energy's ability to clear the auction and maintain its market position is a positive development for the company and its shareholders. As the market continues to evolve, CEG's strategic initiatives and operational improvements will be crucial in navigating the challenges and opportunities ahead.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/CEG/pressreleases/33599345/constellation-energy-clears-pjm-capacity-auction/
[2] https://www.utilitydive.com/news/pjm-interconnection-capacity-auction-prices/753798/
[3] https://japannews.yomiuri.co.jp/world/us-canada/20250717-270127/