Talen Energy Stock, Constellation, and Vistra Are on the Rise. What’s Lifting the Shares.

Shares of Vistra Energy rose after PJM Interconnection shared the results of its latest base residual auction. (David Paul Morris/Bloomberg)

Shares of Talen Energy , Constellation Energy , and Vistra got a boost in premarket trading Wednesday after PJM Interconnection shared the results of its latest capacity auction, which highlighted a need for power generation to meet ramping demand.

Talen rose 10%, Constellation gained 3.5%, and Vistra rose 4.5% after the power grid operator said its 2026/2027 base residual auction had secured 134,311 megawatts of unforced capacity generation and demand response to meet the expected needs of 13 states and Washington D.C.

PJM noted that prices jumped to $329.17 per megawatt-day from $269.92 per megawatt-day for the previous year’s auction. Costs have only continued to climb, with last year’s clearing price marking a particularly sharp spike from $28.92 per megawatt-day for the prior auction.

During each auction, power companies submit bids that indicate the amount of energy they are willing to provide and the price they must be paid to have it ready on days when demand is high. Auctions are conducted three years in advance of the delivery year.

Starting with the lowest bids, PJM continues to add until reaching the target amount of backup energy. The price of the last accepted bid is dubbed the “clearing price,” which is what all providers get paid. Companies that submit bids above that price won’t be selected to provide capacity for the given delivery year.

PJM said an increased demand for power had prevented more than a dozen generation units, or the components of power plants that produce electricity, from retiring since the results of last year’s auction were posted in June.

In short, the balance between supply and demand “remains tight,” the organization said. And reliability concerns aren’t limited to PJM, which serves the mid-Atlantic and Midwest regions.

In fact, “the North American Electric Reliability Corporation has identified elevated risk to the reliability of the electrical grid for much of the country outside of PJM,” the power grid operator said. NERC, a nonprofit based in Atlanta, oversees all 48 contiguous U.S. states.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com