$12B of US ratepayers' money wasted on a modeling mistake and PJM wants to do it again

Capacity auctions pay power plants to be available, separately from the electricity they generate. SemiAnalysis estimates that different reliability assumptions would have lowered PJM's auction costs by $11.57 billion across the 2025/26 and 2026/27 delivery years. Its reconstructed model credits higher cold-weather output and reduced clustering of winter failures while preserving annual average failure rates.

Those changes reduce the modeled capacity requirement. Because the auction's clearing price is paid across the whole fleet, a small reduction in the requirement can lower the price paid to many plants at once. The estimate assumes unchanged generator bids and ranges from $8 billion to $14.5 billion in sensitivity tests. These are counterfactual savings, not refunds already realized.