In April 2025, MISO's capacity market delivered a jolt to developers, buyers, and utilities across the Midwest: $666.50 per MW-day for Summer 2025/26.
That's 22x the clearing price from 2024 ($30/MW-day) and 67x the price from 2023 ($10/MW-day).
It wasn't a fluke. It was a structural signal.
Why the explosion in capacity prices
Several overlapping factors converged in this year's auction, fundamentally altering the supply-demand balance in MISO's Planning Resource Auction.
The Reliability-Based Demand Curve was live for the first time
MISO's new curve prices capacity based on how close the region is to its required Planning Reserve Margin. When available capacity exceeds the PRM by a comfortable margin, prices stay low. When capacity falls short or just barely clears the threshold, every missing MW gets priced at scarcity levels.
In 2025/26, the region landed right on the edge.
Accredited capacity is falling faster than peak demand
MISO's accredited surplus has eroded dramatically. The 2023 surplus was approximately 6.5 GW. By 2025 the surplus had dropped to 2.6 GW.
This drop isn't just about load. It's about resource de-rating and retirements.
- ELCCs (Effective Load-Carrying Capability) are falling for wind and solar
- Imports are being constrained by tighter transmission assumptions
- Coal retirements continue across multiple states
- New resources are arriving slower than anticipated, due to queue backlogs and siting delays
Load growth from electrification and data centers
While not explosive, steady upward revisions to MISO's summer peak forecasts are having an outsized impact in a tight market. EV adoption, industrial reshoring, and the early stages of data center expansion in Indiana and Illinois are nudging the load curve higher, just as firm capacity becomes harder to procure.
What this means for energy buyers and developers
Pass-through risk: cost increases are coming fast
Utilities with capacity adjustment riders will push this price directly into bills. Examples include Ameren Illinois Rider PER, Duke Energy Indiana Summer Reliability Adjustment Rider 70, and Michigan annual PSCR capacity adjustments.
For a commercial or industrial customer with a 1 MW peak load and 50% load factor, summer capacity alone will now cost roughly $61,000 over the 92-day period. That's about 1.4 cents per kWh, up from just 0.06 cents per kWh a year ago.
Distributed and community renewables just got more valuable
At $666/MW-day, capacity credit for avoided capacity is now economically meaningful. A 1 MW resource in Zones 4-7 can now be valued at roughly $240,000/MW-year in avoided capacity. That's 3 to 4 times higher than typical avoided capacity values used by developers in recent years.
The signal is clear: capacity is no longer a peripheral revenue stream in MISO. It is a primary driver of project economics for distributed resources, and one that the next several auctions are unlikely to relieve.