A report by Charles River Associates, commissioned by Exelon and released on Feb. 6, 2026, analyzes whether states in the PJM region should allow rate-regulated distribution utilities to build and own electric generation. The report compares a “Business as Usual” scenario with an alternative that assumes an additional 22,000 megawatts of generating capacity for the delivery year June 2028 through May 2029. According to the analysis, this added capacity could result in an estimated $9.6 billion net savings for PJM customers and improve grid reliability.
The topic is important because recent PJM capacity auctions have cleared at administrative price caps, and the most recent auction failed to meet the grid operator’s reliability requirement for the first time. Meanwhile, new natural gas generation additions have been limited even as demand forecasts rise sharply.
The report projects that most customer savings would come from preventing capacity auction prices from reaching their maximum allowable cap due to increased supply. Additional savings are expected as newer, more efficient plants replace older ones in energy markets, potentially doubling total benefits if higher price caps are allowed in future auctions. The analysis also points out reliability improvements from increased generation.
However, critics note that while the report focuses on adding more power plants to achieve these benefits, its policy recommendation centers on having utilities own those plants—a shift that would transfer investment risk from shareholders to ratepayers. Exelon’s history is relevant here: after spinning off its competitive generation subsidiary Constellation in 2022, it now seeks regulated cost recovery rather than building new plants at shareholder risk.
Market risks remain significant given uncertain load growth projections and ongoing supply-side challenges such as policy uncertainty and supply-chain constraints—factors affecting all developers regardless of ownership structure. The analysis relies on current peak demand forecasts but acknowledges these may change with stricter vetting processes already reducing projected shortfalls.
Some experts argue that policymakers should focus instead on reforms like improving demand forecasting accuracy through stronger requirements for customer commitments; streamlining permitting and interconnection processes; expanding demand response programs; and making it easier for large customers to secure their own power supplies—all without shifting financial risk onto captive ratepayers.
