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PJM's model error wasted $12B of ratepayer money and its emergency auction risks repeating it
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PJM's flawed capacity model underestimated existing generation by 4GW, costing ratepayers $12B from 2025-2027, and its planned emergency auction may repeat the mistake.
For engineers working on grid modeling, this shows how a small error in capacity estimation can cascade into billions in wasted procurement. PJM's plan to run an emergency auction without correcting the model means ratepayers may face another round of inflated costs. The analysis also highlights that better modeling could have saved $6.7B with only 14MW less power procured.
Written by elseif from the cluster below · every claim links back to a sourceThe three things worth knowing
PJM's Reserve Requirement Study underestimates existing power plant capacity by about 4GW due to ignoring winter efficiency gains and post-Storm Elliott resilience improvements.
This modeling error cost PJM's 66 million residents an estimated $12B between 2025 and 2027, with better modeling yielding $6.7B in savings for 2025/26 alone.
PJM plans an emergency auction from September 30 to October 21, but the analysis finds 3.8GW of reliable power that would negate 56% of the 6.8GW it intends to procure.
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