In a communications system, such as a Power-Over-Ethernet system, where power supply equipment (PSE) supplies power to powered requiring devices (PRDs), a system and method of dynamic power management is implemented. The system and method monitors the power consumed at each port by the PRDs. Based on this monitoring, the PSE dynamically determines the minimum power which can be allocated to each PRD, and so dynamically maximizes the available reserve power. The PSE maintains a queue or queues wherein PRDs are listed in order of a power allocation priority. When additional power is available, the PSE preferentially allocates power to a PRD or PRDs which have higher priority. The system and method of the present invention minimizes the power allocated to each individual network device, as a result of which the total number of network devices that can be supported with the available power may be maximized.