MISO’s 2025/26 Capacity Auction: New Curve, Higher Prices, Shrinking Surplus

MISO’s latest Planning Resource Auction (PRA) results for the 2025/26 planning year are out, and the numbers are drawing attention across the U.S. power markets. The Summer 2025 auction cleared at $666.50/MW/day, the highest price in the region’s history. This outcome coincides with the first-ever use of MISO’s new Reliability-Based Demand Curve (RBDC), a structural market change intended to align capacity prices directly with system reliability risk.

While MISO reports that sufficient resources are available to maintain system reliability for the 2025/2026 delivery year, the auction results suggest tightening conditions and the need for new generation resources in the MISO footprint.

This article unpacks the MISO auction results, the impact of the RBDC, and what renewable, storage, and hybrid developers should take away from this new market shift.

The 2025 MISO PRA marked the first implementation of the RBDC, a long-planned market reform designed to create a risk-reflective price curve. Instead of treating capacity obligations as a binary requirement, the RBDC assigns value to incremental capacity based on how close the system is to its seasonal Planning Reserve Margin (PRM) target.

This is a fundamental shift in how MISO capacity auctions operate and allows the auction to send more stable investment signals across seasonal trends, while still pricing scarcity appropriately. According to MISO’s Vice President of System Planning and Competitive Transmission, Aubrey Johnson, the RBDC was developed collaboratively with the Organization of MISO States (OMS), market stakeholders, and the Independent Market Monitor.

The overall goal of this reform was to enhance reliability, improve market efficiency, and adjust market operations to meet the new mix of generation assets.

Starting in 2023, MISO transitioned to a seasonal capacity market design. While annualized capacity prices came in at $217/MW-day for the North/Central region and $212 for the South, which are meaningfully higher than historical averages, summer prices cleared even higher. 

The $666.50/MW-day clearing price for summer reflects the season’s elevated reliability risk. The PRM target was 7.9%, but the auction cleared at approximately 9.8%, indicating that the marginal capacity surplus is becoming more valuable. That marginal capacity was priced significantly higher than in past years.

Over the last three auction cycles, MISO’s summer surplus has fallen from roughly 6.6+ GW in 2023 to 4.6 GW in 2024 and now to 2.6 GW in 2025. That trend, coupled with increased retirements, rising peak loads, and slower-than-expected capacity additions, is tightening the market.

One of the key benefits of the RBDC is its ability to provide differentiated seasonal pricing that reflects actual system needs. Here are the seasonal results of the auction:

• Fall 2025: Prices cleared at $91.60 in the North/Central region and $74.09 in the South, with the differential attributed to regional transmission constraints.
• Winter 2025/26: Cleared flat at $33.20 across all subregions, reflecting ample surplus. North/Central and South both cleared well above their respective PRM targets.
• Spring 2026: Cleared at $69.88, slightly above the PRM and signaling modest reliability value.

This pricing behavior, particularly the lack of collapse in non-summer prices, demonstrates that the RBDC is stabilizing auction results and smoothing the price curve.

The auction also highlights a continued surge in renewable capacity participation. Solar cleared 9.1 GW, up 88% year-over-year from 4.9 GW, while wind cleared 6 GW, a 17% increase from last year.

Despite these gains, capacity commitments for renewables remain heavily seasonally constrained. For example, solar resources are assigned a 5% accreditation in the winter season, limiting the value they can provide during this period.

Storage continued to make up a small portion of MISO’s resource mix, with 0.6+ GW clearing the market. This still represents a significant increase related to the 2024/25 auction, in which just over 50 MW of storage resources cleared the auction. With capacity markets representing an attractive revenue stream for storage projects, these latest capacity prices may lead to an acceleration in storage development within MISO.

While the auction clearing prices are a positive development for developers and resource owners, relatively few generation resources are directly impacted by the auction prices. According to MISO resource adequacy manager Andy Taylor, Load Serving Entities (LSEs) procured over 90% of their capacity via self-supply or bilateral transactions, leaving only a small percentage of generation directly exposed to auction prices. However, for any resource owners planning to engage in bilateral capacity transactions to monetize their resources’ capacity value, the recent auction prices should add upward pressure to negotiated bilateral prices in the coming years.

Capacity Additions Lag, Reliability Pressures Mount

While resource adequacy was technically met, new capacity additions still failed to outpace the combined impact of generator suspensions and ongoing asset retirements. The interconnection queue remains congested, and delays in bringing new generating resources online are a growing concern.

MISO has responded with a range of Reliability Imperative initiatives, including over $30 billion in approved transmission investments, interconnection queue reform measures, and new accreditation approaches, such as Direct Loss of Load (DLOL). These calculations are slated to take effect in upcoming planning years.

Despite these reforms, developers and asset owners must recognize that tighter margins and higher prices are not short-term anomalies and provide many opportunities in the MISO capacity market.

SYSO is a MISO market participant, working with renewable and storage developers and asset owners to support over 500 MW of projects throughout MISO. Our services include:

• Project analysis and revenue forecasting
• Capacity auction offer management and capacity bilateral transaction support
• Daily scheduling in the energy and ancillary services markets
• PPA bilateral financial settlement
• Storage optimization

Our team’s deep market experience paired with a real-world understanding of asset operations ensures that our clients are well-positioned for success, now and in the future.

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Our team is here to help stakeholders navigate this transition, optimize their market participation, and remain competitive in a constrained and reliability-driven environment.

To discuss your MISO project strategy or review how these auction results impact your assets, contact us today.