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The Grid

PJM Would Bill Its Backstop Where Data Centers Grow

PJM filed an amended plan to buy about 6,800 new megawatts for up to 15 years, with bids in March and the bill sent where large loads grow.

VALLEY FORGE, Pa., Oct. 29 — PJM Interconnection asked federal regulators on Thursday to let it buy about 6,800 megawatts of new power supply next spring, under commitments of up to 15 years, and to bill the cost to the parts of its grid where large loads such as data centers are growing. The filing amends the one-time Reliability Backstop Procurement that the Federal Energy Regulatory Commission largely accepted on Sept. 29 but suspended for five months, to Feb. 28, 2027.

The backstop is meant to fill the 6,831-megawatt shortfall left by PJM’s auction for the 2028–29 delivery year, and the target will be recalculated. PJM would update the shortfall with a new load forecast and accreditation figures due early in 2027, then take the lesser of it and the accredited-capacity equivalent of the large-load growth that utilities report. Its 2026 forecast shows about 9,000 megawatts of large-load growth against the 6,800-megawatt shortfall, Danielle Croop, PJM’s senior manager of market design, said in an affidavit, and PJM expects that relationship to hold. Qualifying new capacity contracted to large loads for at least five delivery years comes off the target.

The new resources would be paid a weighted average of no more than $555 a megawatt-day, and each zone’s share of the cost would stay fixed for the full term. By the paper’s arithmetic, at 6,800 megawatts and that maximum average rate, gross payments would total about $1.38 billion a year, or about $20.7 billion over 15 years; the target is still subject to revision, and the figure is not a forecast. The new resources must also offer into PJM’s regular capacity auctions, and the backstop charge is settled as a contract for difference against those auctions’ prices, so the charges actually paid “may be substantially lower,” PJM’s senior director for credit risk and collateral management, Gwen Kelly, said in a second affidavit.

What changes is how the zones are chosen. Utilities that own the distribution wires would report, at least seven days before bidding opens, how much their large loads, those of 50 megawatts or more at a single site, will grow between the actual summer peak of 2026 and the expected summer peak of 2028–29, and name those backed by a service obligation, a construction commitment or an equivalent agreement. Each zone’s share of the target would follow its share of that growth, less any offsetting contracts.The ZonesIn January, PJM adjusted the load forecasts of 14 of its zones for growth in data-center load, among them the AEP, Dominion, ComEd and PECO zones. The first filing measured growth with forecast “Load Adjustments,” which the commission said might not capture it; the draft PJM showed its members, reported here on Oct. 21, counted from the 2026–27 delivery year.

PJM would bill the companies that serve customers in each zone; who pays within the zone is for the states and other retail regulators. “PJM does not propose, and lacks authority, to dictate how any LSE subsequently allocates or recovers those costs from retail customers,” the filing says. A state may direct the charges to the suppliers serving the large loads; where no such allocation is reported, PJM would spread them across all load in the zone, by each supplier’s share of the zone’s capacity obligation.

The filing would also cut the collateral those suppliers must post to 40 percent of the discounted value of their payments, about $686,000 a megawatt at $555, from the $1.5 million first proposed, and accept surety bonds. A supplier that leaves PJM would remain responsible for its charges for the rest of the term, and the opt-out once offered to some cooperatives and municipal utilities would go.

For developers, the draw is the term: PJM wrote that the cost certainty of a 15-year commitment is “a primary incentive for developers to participate.” PJM’s market monitor argued in the first round that cancelled and delayed data-center projects had shrunk the gap to 3,055 megawatts. The new cap on the target “provides an important safeguard by accounting for the possibility that previously reported Large Load agreements may be canceled,” Ms. Croop said.

PJM asked the commission to set Nov. 30 as the deadline for comments and to rule by Jan. 29; if it approves, bids would be taken from March 1 to March 28, the final target set on April 28 and results posted on May 10. Before then comes PJM’s auction for 2029–30, which opens Dec. 9, with results due Dec. 22. That auction “could potentially clear short as well,” PJM wrote, asking to be spared the investigation its rules would then require.

Sources

  1. PJM Interconnection (filed with the Federal Energy Regulatory Commission), “Proposed Amendments to the Reliability Backstop Procurement; Motion for Extended, 32-Day Comment Period (Docket No. ER27-330-000, accession 20261029-5227): transmittal letter and attachments,” Oct. 29, 2026.
  2. PJM Interconnection (filed with the Federal Energy Regulatory Commission), “Affidavit of Danielle Croop on Behalf of PJM Interconnection, L.L.C. (Attachment D, Docket No. ER27-330-000),” Oct. 29, 2026.
  3. PJM Inside Lines, “PJM Files Amended Reliability Backstop Proposal,” Oct. 29, 2026.
  4. Federal Energy Regulatory Commission, “Order Accepting Reliability Backstop Procurement and Establishing Further Procedures, 196 FERC ¶ 61,245 (Docket Nos. ER26-3380-000, EL26-108-000),” Sept. 29, 2026.
  5. PJM Interconnection, “2026 PJM Load Forecast Report,” Jan. 14, 2026.
  6. PJM Interconnection, “RPM Auction Schedule.”
  7. PJM Interconnection, “Tariff, Section 9.2(b) Stakeholder Consultation of Upcoming 205 Filing on Reliability Backstop Procurement (Special Members Committee presentation),” Oct. 22, 2026.