FERC Gives PJM Until Sept. 30 to Agree on Grid Reforms

The Federal Energy Regulatory Commission is pressing PJM stakeholders to reach agreement on governance and stakeholder-process reforms by Sept. 30, 2026, or face reforms imposed by the federal regulator.

FERC Chairman Laura Swett gave that warning after a commission-led technical conference on July 23 in docket AD26-7-000. FERC plans to accept post-conference comments and hold a dispute-resolution forum with PJM stakeholders in September. Those steps are part of an effort to develop a reform package; they are not a final rulemaking or a guarantee that the parties will reach a deal.

What FERC is reviewing

PJM Interconnection coordinates wholesale electricity markets and grid operations across 13 states and the District of Columbia. PJM says its system serves more than 67 million people.

The technical-conference agenda identified several governance and process questions, including the authority and independence of PJM’s board, how states should participate, who can make filings under Section 205 of the Federal Power Act, sector-weighted voting, transparency and faster or time-bound procedures for urgent decisions.

These are issues under review, not reforms that FERC has already adopted. Proposals raised by PJM, states, utilities, generators, large customers or other participants would still need to move through the applicable stakeholder and federal regulatory processes.

Why the dispute has become urgent

The governance debate comes as PJM faces a changing supply-and-demand picture. Data centers and other large electricity users are increasing demand, while the region has struggled to bring enough new generation online. That has raised questions about whether PJM’s existing decision-making structure can respond quickly enough to reliability, transmission, interconnection and market-design challenges.

Reuters reported that participants at the July 23 conference raised concerns about board independence and transparency as data-center demand grows. Utility Dive reported that Swett said FERC would impose its own reforms if PJM stakeholders do not agree on changes by the end of September.

The capacity shortfall is not a current blackout warning

PJM’s 2027/2028 Base Residual Auction secured 134,479 megawatts of unforced generation capacity and demand response at the FERC-approved price cap of $333.44 per megawatt-day. PJM’s annual-report materials say regions using the Fixed Resource Requirement acquired another 11,299 megawatts.

Even with that additional capacity, PJM says the auction fell 6,517 megawatts short of its reliability requirement. The organization describes it as the first time its capacity market has failed to meet that requirement since the market began in 2007.

The figure is a capacity-market result for the 2027/2028 delivery year. It does not mean customers are currently experiencing a shortage of electricity, and it does not by itself predict rolling outages. PJM also says improvements in interconnection, market rules and load forecasting could affect the reliability picture before that delivery year.

What it could mean for customers

The governance dispute will not immediately change a household’s electricity bill. Over time, however, capacity-market prices can affect utility procurement costs, with the effect varying by state, utility and later decisions by state regulators.

The more direct consequence is institutional: changes to PJM’s board, stakeholder voting, filing rights or review procedures could affect how quickly the grid operator and its members act on market and reliability proposals. Those decisions can eventually influence the cost and availability of power across PJM’s territory.

What to watch next

The next meaningful signals are FERC’s post-conference comment process, the planned September dispute-resolution forum, formal proposals from PJM stakeholders and any subsequent FERC order.

If stakeholders reach an agreement, FERC would still need to evaluate the resulting changes. If they do not, Swett has indicated that the commission may impose its own reforms. Until FERC issues a formal order, the outcome remains unsettled.

Sources

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