PJM doesn’t treat August as its hottest month, yet our summer 2026 base case sits above the market, and the bullish scenarios still carry real upside. If you’re reading August as a cooldown after July, the stack says otherwise.
Load stays above average
Above-average load is the base case for August, consistent with both the 2018 and 2023 analog years. The 2023 analog shows roughly 15% of the month, about five days, above 95°F in Baltimore and D.C. That’s a meaningful tail-risk scenario for a month traders often discount.
Soil moisture deficits in the Dominion region are the amplifier to watch. If they persist, they act as a heat amplifier that supports the more bullish outcomes across the Mid-Atlantic.
Transmission relief, but not enough to relax
August brings some transmission relief. Otter Creek-Conistone is expected back in service, easing north-to-south pressure. PJM also postponed planned work on Brighton-Dobs and the Brighton Transformers, which relaxes flows along the I-95 corridor at the BCPEP interface.
The net effect: August carries somewhat less transmission-driven upside risk than July. Don’t read that as a soft month. Above-average demand more than compensates, and congestion risk is already baked into the expected scenario.
The heat rate tells the story
Here’s the insight for anyone marking August. Last summer’s West Hub heat rate settled at 18.8. Our 2026 base case is approximately 36, against a market near 33.7. That’s a base case above market, and the bullish scenarios remain on the vertical portion of the stack, where small load surprises move price fast.
Two structural forces support the tighter read. First, the Dominion zone re-entered RGGI, raising the marginal cost of gas generation and supporting a $1 to $3 West Hub premium in the base case, or $2 to $5 under higher RGGI price scenarios. Second, PJM’s capacity picture is unresolved. The RTEP 2034 study says the RTO is physically short in worst-case peak scenarios, while the capacity collar holds prices down for affordability. Summer 2026 is the first real-world stress test of that gap, and the 5 GW reserve threshold is the level to watch on the hottest August days.
Get the full PJM outlook, including the transmission calendar and capacity market analysis, in our Summer 2026 Power Market Outlook.
