How the 2025 PJM Capacity Jump Reached Ohio Bills

Ohio market insight · Capacity & grid

Updated September 27, 2026Ohio Commercial Energy editorial teamHow we review content Book a free 15-min bill review

The short answer

PJM's 2025/26 auction, with results posted July 30, 2024, raised the capacity price for June 2025–May 2026 from $28.92 to $269.92/MW-day — about $98.52 per kW of capacity tag per year, up from $10.56. It reached Ohio bills on June 1, 2025, but not the same way for everyone: default-service customers saw higher generation prices on their first June bills, pass-through customers saw a bigger capacity line, and fixed-price customers were shielded until renewal. The lesson for 2026–2029 renewals is to know exactly which of those three positions each account is in, because the prices for the next three delivery years are already set.

This is the what-happened case study. For every auction result and the price collar, see PJM capacity auction results; for per-kW bill math for 2026/27–2028/29, see capacity bill math by account size; for cutting your tag, see the PLC playbook; and for the peak-day side — PJM's alerts and facility heat-emergency operations — see PJM alerts and what to do and heat-emergency operations.

The timeline: ten months, not three years

A common explanation — including earlier versions of this page — says each capacity auction sets prices three years ahead. That's how PJM's market was designed, but it isn't what happened recently. After delays in PJM's schedule, the 2025/26 auction ran in July 2024 — results posted July 30, 2024, about ten months before delivery began. The 2026/27 auction was similarly compressed (July 2025 for a June 2026 start).

Date	Event
June–Sept 2024	Customers' load during PJM's five summer peak hours sets the tags that apply from June 1, 2025
July 30, 2024	2025/26 auction results: clears at $269.92/MW-day (Duke's zone had been $96.24 the year before; the rest of Ohio $28.92)
Fall 2024 – spring 2025	Suppliers reprice new fixed offers; utilities run default-service auctions that now include the higher capacity cost
June 1, 2025	New delivery year, new tags and new default prices take effect
July 22, 2025	The 2026/27 auction clears at the $329.17 cap, so the next June is known to be higher again

Ten months left little room for anyone whose contract ended in spring 2025 to shop before the new price was baked into every offer.

Path 1: default (SSO) service

Ohio utilities buy default supply through auctions in which wholesale suppliers bid a price that covers both energy and capacity. Those prices reset each June 1, so the capacity jump showed up on the first bills covering June 2025. Utility-reported changes on June 1, 2025:

Utility	Change reported for June 1, 2025
Duke Energy Ohio	Small-commercial Rate DM (first 2,800 kWh) up about 22%, from about 8.96¢ to 10.95¢/kWh
Ohio Edison, Illuminating Co., Toledo Edison	Residential price to compare up 11.8%–13.3% (to about 9.1–9.5¢/kWh)
AEP Ohio	Generation charge up about $27/month for a default-service home using 1,000 kWh, partly offset by lower transmission and delivery charges (net about +$13)

Business default prices changed by different amounts depending on the rate schedule, which is why the most reliable number is the price to compare on your own bill. In the default-service model, capacity is averaged across the rate class per kWh — a low-tag customer and a high-tag customer on the same schedule paid the same price. For how the default price is set and compared, see the Ohio price to compare.

At the state level, EIA data show Ohio's average commercial price at about 13.78¢/kWh in January–June 2026, versus 11.07¢ a year earlier. That rise reflects both the higher capacity price and higher PJM wholesale energy prices in 2025.

Path 2: fixed all-in supplier contracts

Customers who signed fixed contracts before July 2024 that ran past June 2025 kept their rate. Their supplier had priced 2025/26 capacity on an estimate, and when the result came in far higher, the supplier absorbed the difference — unless the contract said otherwise. Three things determined who actually paid:

Change-in-law or regulatory clauses. Some contracts allow the supplier to pass through new or changed PJM charges. Whether a capacity price increase qualifies depends on the wording; many all-in contracts treat capacity as a market risk the supplier keeps.
Tag re-pricing. Some fixed contracts re-price if the customer's tag changes on June 1. A site that added load in summer 2024 could see an adjustment even with the capacity price "fixed."
Renewal. Every customer whose fixed contract ended after July 2024 renewed into offers that included $269.92 for 2025/26 and, after July 2025, $329.17 for 2026/27. For flat usage, that meant a higher all-in rate even though nothing at the site changed.

Path 3: capacity pass-through

On pass-through or "index plus capacity" products, the capacity line is roughly tag × delivery-year price, adjusted by utility scaling factors. On June 1, 2025 that line rose more than ninefold for a customer outside Duke's zone whose tag didn't change (about 2.8-fold in Duke's zone): a 200 kW tag went from about $2,100 a year to about $19,700. Pass-through customers felt the full step immediately — but they're also the only group that keeps 100% of any tag reduction.

Lessons for 2026–2029 renewals

1. Capacity isn't a guess through May 2029. The 2026/27, 2027/28 and 2028/29 prices are known ($329.17, $333.44 and $325.00). A fixed contract ending by May 31, 2029 has no auction risk left in it; the differences between offers come from energy prices, margins and how each handles your tag.

2. Contracts crossing June 2029 carry an unknown. The 2029/30 auction is scheduled for December 2026 and falls under a price collar of roughly $175–$325/MW-day. After that, there's no approved collar.

3. Read the change-in-law clause. PJM is running a separate backstop procurement in fall 2026 to address a capacity shortfall, and who bears that cost is unresolved. Ask each supplier in writing whether a new PJM charge of that kind would be passed through.

4. Check your tag every June. Summer 2026 included PJM's highest-ever load, on July 2. The tags set from those hours apply from June 1, 2027. Ask whether your contract re-prices when the tag changes.

5. Watch the renewal notices. Under House Bill 15, suppliers must send small commercial accounts (demand of 25 kW or less) two notices before a fixed contract rolls to a variable rate — one 90–60 days and one 45–15 days before expiration. Larger accounts get none. The 2025 experience showed how expensive an unplanned rollover can be. See the HB 15 business guide.

6. Don't compare fixed offers without a capacity column. Two offers can differ by a few tenths of a cent because one fixes capacity and the other leaves it open. The bid-sheet columns to require are in the auction results pillar; contract terms to negotiate are in negotiating Ohio energy contracts.

FAQ

When did the 2025/26 capacity price start affecting Ohio bills?

On June 1, 2025, the start of the delivery year. Default-service and pass-through customers saw it on their first June bills; fixed-price customers saw it when their contracts renewed.

Was the 2025/26 auction held three years in advance?

No. It ran in July 2024, with results posted July 30, about ten months before delivery, because PJM's auction schedule had been compressed after earlier delays.

Why did my bill go up in June 2025 if my usage didn't change?

Capacity is priced per kW of your share of PJM's summer peak, and the price per kW rose more than ninefold (less in Duke's zone, which started higher). On default service or a pass-through product, that shows up without any change in kWh.

Could a fixed-price supplier pass the increase through?

Only if the contract allows it — typically through a change-in-law, regulatory or tag re-pricing clause. Read those sections before assuming you're protected.