PJM would tie backstop power costs to large-load growth

PJM Interconnection has proposed assigning the costs of a one-time reliability power procurement according to how much large-load demand grows in each zone. The grid operator filed amended terms with the Federal Energy Regulatory Commission on Oct. 29, 2026, including a new proposed bidding schedule that starts in March 2027.

The procurement’s stated target is about 6,800 megawatts (MW). PJM previously cited a 6,831-MW shortfall for the 2028/2029 delivery year, making the new target roughly 31 MW lower by simple subtraction. But the target is not final: PJM says it will recalculate it using updated information.

How the proposed cost allocation would work i

PJM would measure each zone’s contribution to large-load growth by comparing actual peak load in summer 2026 with the forecast for the 2028/2029 delivery year. Electric distribution companies would report firm large-load growth for that calculation. The resulting charges would be assigned to load-serving entities based on their zones’ contributions, rather than allocated as a uniform regional charge.

Load-serving entities include utilities and other organizations responsible for serving customers. They, rather than individual large-load customers, would receive assigned charges under the proposal. The filing does not set individual retail bills; whether costs are passed through to customers would depend on utility arrangements and state-level decisions.

The amended terms also revise credit requirements and payment terms for load-serving entities. An entity that leaves PJM would remain responsible for its assigned charges for the rest of the commitment term. The amendment removes an earlier opt-out for certain municipal utilities and cooperatives. It would require a minimum five-year peak-shaving plan for the specified Peak Shaving Adjustment opt-out.

PJM proposes seeking resources for commitments of up to 15 years, with a maximum megawatt-weighted average willingness to pay of $555 per MW-day. Qualifying bilateral contracts would reduce the amount sought through the procurement.

March bidding would replace the September timetable i

Under the amended schedule, bidding would run from March 1 through March 28, 2027. PJM proposes setting the final target and supply amounts on April 28 and posting results on May 10. The timetable is a proposal, not an approved schedule.

PJM’s earlier timetable contemplated a procurement in September 2026. After FERC acted on the initial tariff revisions on Sept. 29, PJM said it would not proceed with the planned Sept. 30 procurement. The amended plan therefore shifts the proposed bidding to the following March.

FERC’s Sept. 29 action accepted the initial tariff revisions subject to refund and further proceedings, with a Feb. 28, 2027, effective date. The commission opened proceedings on issues including cost allocation, collateral and responsibilities when entities leave PJM. FERC has not approved the amended terms filed on Oct. 29, so the proposed charges, procurement quantity and March bidding plan are not final.