Last week, the Midcontinent Independent System Operator’s (MISO’s) Planning Resource Auction (PRA) cleared at roughly $79,000/MW-yr in North/Central and $77,000/MW-yr in the South. These prices represent an approximate 11x annual increase and a 20x summer pricing increase!

MISO’s PRA is an annual capacity auction that ensures utilities have secured enough supply resources to meet peak demand during the planning year.

What do the auction results mean for large energy users?

High capacity costs translate into higher energy costs overall. Until MISO’s supply situation improves (which we will discuss in the next section), these high capacity costs are likely here to stay. 

Demand response remains a proven way of reducing capacity costs by paying businesses to reduce electricity use during peak demand periods to support grid reliability. 

What led to these capacity auction results?

1. Reduced accredited supply: While MISO expects to have sufficient supply to meet system needs this year, decreased accreditation and retirement of coal and natural gas units created a tighter supply stack than in previous years. New resources coming online — mainly renewables — receive lower accredited capacity because they can't consistently produce during peak times. As a result, there was simply less capacity available to meet MISO’s resource adequacy requirements, which led to the price increase. 

2. Sloped demand curve: The MISO capacity auction in the past has used a vertical demand curve, which meant that MISO would procure an exact set amount of megawatts regardless of price. This vertical demand curve resulted in the annual price swinging wildly between near-zero pricing and pricing up near the auction’s cap. The auction results released on April 28, 2025 are the first that used a sloped demand curve, which makes prices adjust more gradually based on how much supply is available. With this sloped demand curve, we expect reduced volatility but, as a result, more persistent high pricing. 

3. Increased demand: MISO's forecasted peak demand is growing, which is being driven by economic expansion, data centers, electrification (like EVs), and extreme weather assumptions. Summer peak demand is expected to grow by around 10% in the next 5 years!

Take home: Businesses can quickly contribute to MISO’s system reliability and supply stack through demand response - all while financially benefiting from these rising prices. To learn more about MISO’s demand response programs, contact info@voltus.co.