Based on the Enverus Intelligence® Research Winter Power Market Outlook webinar for PJM and MISO, presented by Kenneth Curtis, Director of Power Analytics, and Rob Allerman, Sr. Director of Power Analytics.
A record-strength El Niño points to a warm winter across PJM and MISO. Warm doesn’t mean calm. PJM’s 2028/2029 capacity auction cleared at the price cap for the third straight year, and MISO hit its $10,000/MWh cap on Sept. 2 without a single unit trip. Enverus Intelligence® Research (EIR) sees mild weather setting the base case this winter, with thin reserves setting the risk.
A record El Niño sets up a warm winter
EIR’s analog years are 2015/16 and 2023/24, which average +1.6 on the Relative Oceanic Niño Index (RONI). The global climate model statistical average for December through February is +3.1h, and the models show record-high El Niño conditions. A supercharged jet stream should keep wind above average.
In PJM, EIR’s forecast is for a warmer-than-average winter than last year. In December 2015, only one day fell below freezing in Washington, D.C. and Philadelphia. January should be cooler than December but still warmer than average, and February could run 10 to 15 degrees above average, especially in Chicago.
MISO looks similar. December 2015 was the warmest on record for Indianapolis and Detroit. EIR expects January to follow a similar trend & have below average load,. February should be warm again.
PJM: little cushion left in the system
PJM’s 2028/2029 Base Residual Auction cleared at the $325/MW-day price cap, the third straight capped auction. It’s also the second consecutive auction to clear short of the reliability requirement: about 6,517 MW short in 2027/2028, the first physical shortfall in the market’s 19-year history, and 6,831 MW short in 2028/2029.
Through October, PJM has logged about 300 five-minute intervals with ORDC shortage pricing in 2026, a pattern consistent with a thinner margin. More evidence of this pattern is in Western Hub (WH) heat rates, which are spiking higher and staying elevated longer each year.
Year-over-year load growth is near 2%. EIR’s winter forecast assumes 3% to 4% load growth, a strong El Niño and Dominion back in RGGI, adding a $3 to $5 premium at WH.
On supply, Eddystone (760 MW) is projected to deactivate Nov. 20, 2026, contingent on no seventh DOE order extension, and Elwood’s 2026 retirement was withdrawn. The Chanceford–Doubs 500 kV line is expected in service in June 2027. EIR sees no 2026 pricing impact and a modest bearish lean on WH and DOM for 2027 and beyond.
Transmission outages shape the congestion picture:
- December: The Meadowbrook–Loudon outage (Dec. 2–17) adds bullish congestion for WH from MORR-LOUD. Marysville corridor outages in Ohio (Dec. 2–8) are bullish for AD Hub.
- January: The Mt. Storm–Prunty outage (Jan. 4 to Feb. 1) sets up bullish WH through BED-BLA or AEP-DOM congestion.
- February: The Goose Creek transformer outage in Data Center Alley (Feb. 1 to April 16) opens the door to bearish WH congestion.
PJM price view: the right tail is the story
| PJM implied heat rate | Bearish | Expected | Bullish | Forward |
|---|---|---|---|---|
| December | 16.7 | 19.6 | 34.2 | 17.5 |
| January | 10.0 | 13.0 | 24.7 | 12.0 |
| February | 12.7 | 14.7 | 28.7 | 13.2 |
December is back to being undervalued, with meaningful right-tail risk tied to reserve margins, congestion and structural load growth. January remains EIR’s preferred winter month, with upside from cold weather and BED-BLA congestion. In February, our base case sits near the bend in the stack. A colder stretch, weaker wind or higher outages can push PJM into a much steeper part of the curve.
MISO: September showed how fast energy goes to the cap
On Sept. 2, MISO printed the $10,000/MWh cap for multiple intervals between 6 and 8 p.m. ET. No unit tripped, and wind didn’t miss forecast. Load ran 4,300 to 5,700 MW above the day-ahead forecast, about 18 GW of solar dropped off by HE20 and imports weakened. Indiana Hub real-time prices averaged $4,118.32 in HE20, against $257 day-ahead.
The same mechanism drove the Sept. 17 event. Reserve scarcity pulled energy prices up through MISO’s co-optimization, not the other way around. As evening ramps steepen and reserve margins thin, that exposure becomes a recurring feature rather than a one-off. Weather-normalized demand growth averaged +2.3% on-peak and +3.2% off-peak over the most recent week, which keeps tightening reserves around the edges.
Retirements now hinge on the courts. On Sept. 11, the D.C. Circuit vacated DOE’s first Campbell order, ruling DOE exceeded its 202(c) authority. The current order holds Campbell online through Nov. 14, 2026, but a seventh extension now carries real legal risk.
Congestion risks to watch include a 345 kV outage on SPP’s S3455–S34740 line in December (bullish Minnesota Hub, bearish Indiana Hub), Oneida–Majestic work starting Jan. 4 (bullish Michigan Hub) and Gibson–Petersburg work starting Feb. 1 (bullish Indiana Hub).
MISO price view: forwards have caught up
| MISO implied heat rate | Bearish | Expected | Bullish | Forward |
|---|---|---|---|---|
| December | 14.8 | 19.0 | 22.8 | 17.9 |
| January | 12.6 | 16.8 | 19.3 | 18.0 |
| February | 9.9 | 16.4 | 19.4 | 17.7 |
Winter forwards have largely repriced September’s scarcity premium, and EIR’s expected values sit relatively close to the market. December looks reasonably valued, with upside if it turns colder or less windy. January forwards sit modestly above our expected value, and February is largely aligned with our outlook.
What to take into the winter
- EIR expects a warmer-than-average winter with El Niño.
- WH is the risk. Heat rates keep spiking and staying elevated.
- MISO reserves are tightening into winter. Sept. 2 and Sept. 17 showed how fast energy goes to the cap.
Want to stay ahead of how PJM and MISO trade this winter? Learn more about our power trading solutions.
About Enverus Intelligence® | Research, Inc. (EIR)
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macroeconomic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. See additional disclosures here.
