FERC accepts PJM backstop procurement but suspends it to February 2027

The Federal Energy Regulatory Commission accepted PJM Interconnection's one-time Reliability Backstop Procurement for filing on September 29, 2026, and suspended it for five months, to an effective date of February 28, 2027, subject to refund and to the outcome of the further procedures it orders, a paper hearing and a new Federal Power Act section 206 proceeding, docket EL26-108-000, into PJM's existing tariff, according to the order in docket ER26-3380-000. The procurement would buy up to 6,831 MW, the amount by which, per the order, PJM's 2028/2029 Base Residual Auction cleared short of the region's reliability requirement once Fixed Resource Requirement resources are counted, before offsets and opt-outs. PJM said on September 30, 2026 that "the RBP process will not begin on Sept. 30 based on the requirements of FERC's order" and that actual timing is to be determined.

PJM had told the Commission that, if the filing was accepted without significant revisions, it would open the bid window on September 30, 2026, close it on October 21, and announce pay-as-bid results a few days before the 2029/2030 Base Residual Auction opens on December 9, 2026, per the order's account of the filing; PJM's fact sheet, dated July 2026, conditions the same offer window on acceptance "without modification." The order finds that tariff records proposing actions during the suspension window, such as an October 2026 close of the bid solicitation, may be unjust and unreasonable.

What the order decides

The Commission found most of the design just and reasonable: eligibility rules limiting the auction to resources that have never cleared a capacity auction and expect to be in service by June 1, 2032; a requirement that committed resources offer into PJM's capacity auctions as $0/MW-day price takers; a $555/MW-day maximum willingness to pay, applied as a MW-weighted average of levelized cost over the term; pay-as-bid clearing; the gating criteria; shortfall charges of 20% of the RBP price for up to three delivery years; the exclusion of Fixed Resource Requirement entities; and seller collateral.

Three parts go to the paper hearing. First, cost allocation. PJM proposed to assign the Initial RBP Target to electric distributor zones by each zone's pro rata share of the growth in forecasted Load Adjustments between the 2026/2027 and 2028/2029 delivery years, with each zone's final share of the Final RBP Target, after offsets and opt-outs, held constant for the 15-year term. The Commission finds this may be unjust and unreasonable because, on its reading of PJM's forecasting practice and the record, some large loads were never counted as Load Adjustments, having been built into the base forecast, so the target "may only capture a portion of new load growth." It suggests the difference between actual 2026/2027 load in each zone and the most recent 2028/2029 forecast instead, and adds that PJM "should employ the most up-to-date load and resource forecasts to inform the Initial RBP Target."

Second, the rules for a transmission owner that leaves PJM, which would have had the exiting owner pay for stranded procurement commitments; the Commission reads its 2008 Duquesne precedent as putting capacity costs on load-serving entities, not transmission owners. Third, collateral for buyers, the load-serving entities: PJM's initial credit rate of $1.5 million per committed MW, which PJM sized at about 50% of notional contract value, comes with no expected probability of default, loss-given-default assumption or other quantitative measure, the order says, citing FirstEnergy.

Initial briefs are due 45 days from the order's date, which falls on November 13, 2026, with responses due 20 days after that. The Commission says it anticipates granting a motion to hold that briefing in abeyance if PJM submits a new section 205 filing within 30 days of the order, by October 29, 2026, and it encourages PJM "to swiftly submit a new FPA section 205 filing without delay."

A contested target, four concurrences and PJM's response

The target itself is disputed in the record, and 6,831 MW is its ceiling: per the order, PJM's filing sets the shortfall as the Initial RBP Target and reduces it by Qualifying RBP Offset UCAP MW, new capacity serving new load, and by Opt-Out UCAP MW from electric distributors that qualify to opt out, to the Final RBP Target the auction procures. As the order summarizes the Market Monitor's answer, 4,017 MW of data center load, or 42% of the forecasted increase in data center load between the 2026/2027 and 2028/2029 delivery years, had been cancelled or delayed as of September 21, 2026, with the Dominion zone accounting for 51% of that and AEP-Ohio for 29%; after those cancellations and delays, the Market Monitor contends, the 2028/2029 shortfall would be 3,055 MW rather than 6,831 MW. PJM's answer, as the order describes it, was that even with some withdrawals the forecast "continues to predict steep load growth," so the target need not be cut. The 2028/2029 auction, which The Duck Curve noted on August 26, 2026, cleared at the $325/MW-day temporary price cap; the 2027/2028 auction cleared 6,623 MW short at the $333.44/MW-day cap, once Fixed Resource Requirement resources are counted, and PJM announced in December 2025, as the order reports it, that a Base Residual Auction had cleared significantly below the reliability requirement for the first time in the auction's history.

Four of the five commissioners attached concurrences. Chairman Laura Swett wrote that the proposal "came before us on the last possible statutory day to open a procurement window on September 30," and that, "whether by accident or incompetence," the timing left the Commission no meaningful opportunity to issue a deficiency letter, develop the record or set hearing procedures. Commissioner David LaCerte wrote that "A competent and effective RTO can take this half-baked cake and finish the job."

PJM's statement says it "welcomes FERC's acceptance" and that the Commission "identified three discrete issues requiring further consideration." The statement and PJM's write-up of the order mention neither the section 206 proceeding nor the concurrences. PJM says it will give a brief administrative update at its Market Implementation Committee on October 7, 2026, and that every previously communicated milestone will be reviewed.

Outlook

If PJM files a revised section 205 package by October 29, 2026, the abeyance the order anticipates would take the dispute off the briefing calendar, but nothing in the order sets a date by which a revised procurement could run; PJM's own filing tied its results to the December 9, 2026 opening of the 2029/2030 auction, and the suspension runs past it. The order's instruction to use the most up-to-date forecasts for the target, read beside the Market Monitor's 3,055 MW estimate, suggests a refiled Initial RBP Target could be smaller than 6,831 MW, though PJM's answer defended the figure. The October 7 committee update is the first scheduled occasion for PJM to say which, and it comes as PJM separately intends section 205 filings on large-load transmission service by early to mid-November 2026, as The Duck Curve reported on September 10, 2026.