Coal plants, nuclear reactors and other generators will take a hit next year on the biggest U.S. power grid as payments plunge 64% to help keep the lights on from New Jersey to Illinois.

Suppliers to PJM Interconnection LLC’s grid, which serves more than 65 million people, will get $50 a megawatt-day to provide backup capacity for the year starting June 2022, according to the results of an auction released Wednesday. It’s the lowest price in 11 years.

The results are an especially harsh blow for coal plants and nuclear reactors already struggling to compete. The PJM auction is the single most important event for generators across the eastern U.S., including Calpine Corp., NRG Energy Inc. and Exelon Corp., because it dictates a big chunk of their future revenue. It also plays a pivotal role in shaping the region’s electricity mix, determining how much the region is willing to stick with coal and natural gas plants or replace then with wind and solar.

“I can’t imagine how nuclear is going to be able to cover all their fixed costs with such a low price,” said Brianna Lazerwitz, an analyst for BloombergNEF.

Read more