{"document":{"slug":"filing-20260814-5244","title":"PJM Interconnection, L.L.C. submits tariff filing per : Supplemental Filing of Croop Affidavit in ER26-3380 to be effective N/A","issued":"2026-08-14","accession":"20260814-5244","docket":"ER26-3380-000","group":"PJM filings","filer":"PJM Interconnection, L.L.C.","kind":"filing","file":"sources/originals/20260814-5244_01.pdf","url":"https://www.pjm.com/pjmfiles/directory/etariff/FercDockets/9829/20260814-er26-3380-000.pdf","sha256":"9a645549a2f58c9e4743b8de42cee7c77c311f3d4f2c080c57a59a937322b188","pages":22,"tokens":3334,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":278,"text":"PJM Interconnection, L.L.C. \n2750 Monroe Blvd. \nAudubon, PA 19403-2497 \n \nChenchao Lu \nAssociate General Counsel  \nT:  (610)-500-3245  \nChenchao.Lu@pjm.com \n \n \n \n \nAugust 14, 2026 \n \nHonorable Debbie-Anne A. Reese, Secretary \nFederal Energy Regulatory Commission \n888 First Street, N.E.,  \nWashington, D.C. 20426 \n \nRe: \nSupplemental Filing in PJM Interconnection, L.L.C., Docket No. ER26-3380-000 \n \nDear Secretary Reese: \n \nPJM Interconnection, L.L.C. (“PJM”) submits this supplemental affidavit of Danielle \nCroop to provide a more complete example of the selection process detailed in the June 30, 2026 \naffidavit.  Specifically, it has come to PJM’s attention that the example provided in Exhibit 1 of \nMrs. Croop’s June 30, 2026 affidavit did not accurately demonstrate the least cost selection by \nDelivery Year for offers submitted in the proposed Reliability Backstop Procurement.  Therefore, \nto provide the Commission and any interested parties with a more fulsome example, PJM submits \nthe attached supplemental affidavit that further demonstrates how PJM would select resource \noffers based on least costs while prioritizing in service dates during the selection process.   \nNotably, the supplemental affidavit merely updates the examples, also shown in redline, \nthat were included in Mrs. Croop’s June 30, 2026 affidavit and does not revise or amend a proposed \nrate schedule, term, or condition.  Indeed, the Commission has previously explained that \n“supplements d[o] not constitute an amendment because the supplements d[o] not change the \nproposed rates. . . .”1  As a result, this supplemental affidavit does not reset the clock for the \n \n1 Union Elec. Co., 181 FERC ¶ 61,064, at P 40 (2022) (finding that MISO’s supplements did not constitute an \namendment because the supplements did not change the proposed rates that MISO filed)."},{"page":2,"startToken":278,"endToken":477,"text":"Honorable Debbie-Anne A. Reese, Secretary \nAugust 14, 2025 \nPage 2 \n \nCommission to act on PJM’s June 30, 2026 filing as all parties were on notice of the proposed \nrates, terms and conditions based on the June 30, 2026 filing.2  Accordingly, the Commission \nshould continue to issue an order by the requested action date of September 29, 2026. \n \n \n \n \n \n \n \n \nRespectfully submitted, \n \n \n \n \n \n \n \n \n \n  /s/ Chenchao Lu \n \n \nCraig Glazer \nVice President – Federal Government Policy \nPJM Interconnection, L.L.C. \n1200 G Street, N.W., Suite 600 \nWashington, D.C.  20005 \n(202) 423-4743 (phone) \n(202) 393-7741 (fax) \nCraig.Glazer@pjm.com  \n \nChenchao Lu \nAssociate General Counsel \nPJM Interconnection, L.L.C. \n2750 Monroe Blvd. \nAudubon, PA  19403 \n(610) 666-2255 (phone) \n(610) 666-8211 (fax) \nChenchao.Lu@pjm.com    \n \n \n \nCounsel for \n \nPJM Interconnection, L.L.C. \n \n2 Sierra Pacific Power Co., 141 FERC ¶ 61,266, at P 39 (2012) (“Filings ... that do not revise a rate schedule, tariff, \nor service agreement, but instead only add or revise supplemental materials submitted as part of the application are \nconsidered on an individual basis to determine whether such changes are so significant that they would constitute an \namendment ....”); Miss. Power Co., 137 FERC ¶ 61,241, at P 23 (2011)."},{"page":3,"startToken":477,"endToken":541,"text":"CERTIFICATE OF SERVICE \n \n \nI hereby certify that I have this day served the foregoing document upon each \nperson designated on the official service list compiled by the Secretary in this proceeding. \n \nDated at Audubon, PA, this 14th day of August 2026. \n \n /s/ Chenchao Lu \n \n \nChenchao Lu \nAssociate General Counsel \nPJM Interconnection, L.L.C. \n2750 Monroe Blvd. \nAudubon, PA  19403 \nChenchao.Lu@pjm.com"},{"page":4,"startToken":541,"endToken":562,"text":"Attachment A \n \n \n \n \n \n \n \nSupplemental Affidavit of Ms. Danielle Croop, \nSenior Manager in the Market Design group of \nPJM Interconnection, L.L.C."},{"page":5,"startToken":562,"endToken":834,"text":"UNITED STATES OF AMERICA \nBEFORE THE \nFEDERAL ENERGY REGULATORY COMMISSION \n \n \n \n \n \n \n \n) \nPJM Interconnection, L.L.C. \n \n) \n \nDocket No. ER26-3380-000 \n \n \n \n \n \n \n) \n \nSUPPLEMENTAL AFFIDAVIT OF DANIELLE CROOP \nON BEHALF OF PJM INTERCONNECTION, L.L.C. \n1. \nMy name is Danielle Croop, Senior Manager in the Market Design group for PJM \nInterconnection, L.L.C. (“PJM”).  My business address is 2750 Monroe Blvd., \nAudubon, Pennsylvania, 19403.  I am submitting this supplemental affidavit on \nbehalf of PJM to provide a clarifying example that better illustrates all components \nof the commitment process which is:  clearing in least-cost order while prioritizing \nearlier Delivery Years and constraining the commitment by the maximum \nwillingness to pay. \n \n2. \nThe example submitted under Exhibit No 1 from my June 30, 2026 affidavit was \nfocused on documenting the procurement approach of applying the maximum \nwillingness to pay and demonstrating how that constraint can impact the \nprocurement.  However, in that example, the least cost selection by delivery year \nwas not demonstrated. \n \n3. \nThis supplemental affidavit sponsors an updated exhibit, appended to my affidavit \nas Exhibit 1 to illustrate three simplified examples that help demonstrate how the \nReliability Backstop Procurement selection process works.  Separately, Exhibit 2 \nshows the redlines against the example that was originally included in my June 30, \n2026 affidavit. \n \n4. \nIn addition, the explanation in Step 2 of the example submitted under Exhibit No 1 \nfrom my June 30, 2026 affidavit regarding the calculation of the MW-weighted \naverage levelized cost incorrectly inverted the numerator and denominator. The \nexplanation has been revised in this supplemental affidavit to accurately reflect the \nMW-weighted average levelized cost calculation set forth in the filing letter and \nproposed tariff revisions."},{"page":6,"startToken":834,"endToken":851,"text":"Exhibit 1 \n \n \n \n \n \n \nAppendix to Affidavit of Ms. Danielle Croop \n \nExamples Demonstrating RBP Resource Procurement \nProcess \n \n(Clean Version)"},{"page":7,"startToken":851,"endToken":1074,"text":"EXHIBIT 1 \nExamples Demonstrating RBP Resource Procurement Process \nIn this example, each RBP Resource Sell Offer will include an offer price and MW quantity pair \nfor each Delivery Year beginning with the first year the resource is expected to reach \ncommercial operation.  PJM will then determine the “levelized procurement cost” for this \nresource to use in the selection process.1  This will be done with the Levelized Cost equation, \nwith a discount rate equal to 9.5% after-tax average weighted average cost of capital \n(“ATWACC”).  \nLevelized Cost ($/MW-day) = Net Present Value (RBP Sell Offer price x UCAP offered)/Net \nPresent Value (UCAP offered)  \n \nExample 1 \nIn the example below, Unit A offers at a price and a quantity for each Delivery Year of the 15-\nyear fixed term, beginning in Year 1 and ending in Year 15.  This Offer has a levelized \nprocurement cost of $101.05/MW-day UCAP and a levelized MW value of 69.3 MW. \nExample 1: Unit A, $/MW Offer per Year \n \nUnit A \nPrice ($) \nMW \nYear 1 \n91 \n10 \nYear 2 \n91 \n10 \nYear 3 \n100 \n9 \nYear 4 \n100 \n9 \nYear 5 \n100 \n9 \nYear 6 \n100 \n9 \nYear 7 \n100 \n9 \nYear 8 \n110 \n8 \nYear 9 \n110 \n8 \nYear \n10 \n110 \n8 \n \n1 Proposed TariƯ, Attachment DD, section 18.5(f)(ii); Croop AƯ. ¶ 29."},{"page":8,"startToken":1074,"endToken":1250,"text":"4 \nYear \n11 \n110 \n8 \nYear \n12 \n110 \n8 \nYear \n13 \n110 \n8 \nYear \n14 \n110 \n8 \nYear \n15 \n110 \n8 \n \n \nExample 2 \nExample 2 walks through how a set of offers are evaluated based on ranked Delivery Year and \nlevelized cost for selection. The selection process is also constrained to the maximum \nwillingness to pay of the procurement.  For illustrative purposes, rather than a maximum \nwillingness to pay of $555/MW-day as PJM is proposing to use for the RBP, we assume that the \nmaximum willingness to pay is $100/MW-day, and the Final RBP Target for procurement is \n6,800 MW.   \nTable 1 illustrates the UCAP MW offered through the first four Delivery Years and a represented \nlevelized cost offer for this resource.  Table 1, below, tracks the MW that are procured to \ndetermine when PJM satisfies the procurement target of 6,800 MW.  \nTable 1: Table updates include switch Offer 1 and 2 to reflect offers in rank-order for \nselection and Offer 3 was updated to offer starting in the 2028/29 DY."},{"page":9,"startToken":1250,"endToken":1483,"text":"5 \nTable 2 shows the offers in greater detail in determining the present value and levelized cost of \nthe offers.  For each RBP Resource offer (Offers 1-8), there are three procurement values in the \nNPV column.  The first value for each RBP Resource offer is the levelized MW UCAP.  The \nsecond value is the levelized cost, expressed as $/MW-day.  And the third value is the total \nrevenue cost stream based on the RBP Resource’s levelized MW and cost.  \nTable 2 \n \nThe procurement process will prioritize earlier Delivery Years, while being constrained to the \nfixed-budget maximum willingness to pay.  This can result in: (1) an earlier Delivery Year \nresource being skipped if it will violate the maximum willingness to pay constraint; (2) a \nprocurement of that resource later in the process, even if the resource was previously skipped, if \nprocurement of a lower-priced resource creates additional cost headroom in the budget; and/or \n(3) a possibility that PJM will not procure the exact Final RBP Target quantity if doing so \nviolates the maximum willingness to pay constraint.  These features are demonstrated below in \nthe selection sequencing example: \nStep 1: Procure Offer 1. Offer 1 would be procured first in the commitment, given it has the \ncheapest levelized cost in the delivery year.  This will add the below MW value to the target for \neach Delivery Year, with a MW-weighted average levelized costs of  $50."},{"page":10,"startToken":1483,"endToken":1677,"text":"6 \n \nStep 2: Procure Offer 2. This will increase our procurement by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $93.26.  \n \nThe MW-weighted average levelized cost of $93.26 can be calculated from the PV column in \nTable 2 as the  sum of Revenue cost stream / sum of levelized MW.  [932,200 + 72,645]/ \n[9,322+1,453]. \n \nStep 3: Skip Offer 3. If Offer 3 was selected the MW-weighted average levelized cost would rise \nto $105.75, above the maximum willingness to pay of $100 MW/day. \nStep 4: Procure Offer 4. This will increase the procured MW by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $80.50. \n \nStep 5: Procure Offer 3.  Offer 3 may now be procured while keeping the MW-weighted average \nlevelized cost under the maximum willingness to pay.  Thus, the procurement will prioritize and \ncommit this resource with an earlier first Delivery Year.  This will increase the procured MW by \nthe offered MW for each applicable Delivery Year, and result in a MW-weighted average \nlevelized cost of $90.71."},{"page":11,"startToken":1677,"endToken":1812,"text":"7 \nStep 6: Procure Offer 5. This will increase the procured MW by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $90.63.  \n \nStep 7: Procure Offer 6. This will increase the procured MW by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $93.02.  \n \nAt this point, the final target MW of 6,800 has been committed and the procurement is complete.  \nOffer 7 and 8 would not be procured through the RBP.  \nExample 3 \nIn Example 3, the selection clears short of the Final RBP Target to maintain the maximum \nwillingness to pay.  This example relies on the same example as above, except that offer prices \nfor Offers 6, 7, and 8 are dramatically increased."},{"page":12,"startToken":1812,"endToken":1973,"text":"8 \nTable 3 \n \nThe procurement process runs through Steps 1 through 6, as described in Example 2, above.  \nThen, following Step 6, the process begins to differ:  \nStep 6: Procure Offer 5, as in Example 2. This will increase the procured MW by the offered \nMW for each applicable Delivery Year, and result in a MW-weighted average levelized cost of \n$90.63. \n \nAt this point, Offers 6, 7 and 8 cannot be procured without violating the maximum willingness to \npay constraint.  If Offer 6 were selected, the MW-weighted average levelized cost would rise to \n$106.73 , which is above the maximum willingness to pay of $100 MW/day.  Similar violations \nof the maximum willingness to pay for Offers 7, and 8 would occur.  Given that, in this example, \nthere are no additional offers to consider, the procurement would clear 100 MW short the target, \nwith the maximum UCAP MW procured equal to 6,700 MW for the 2031/32 Delivery Year."},{"page":13,"startToken":1973,"endToken":1990,"text":"Exhibit 2 \n \n \n \n \n \n \nAppendix to Affidavit of Ms. Danielle Croop \n \nExamples Demonstrating RBP Resource Procurement \nProcess \n \n(Redlined Version)"},{"page":14,"startToken":1990,"endToken":2217,"text":"Croop, Exhibit No. 2 \nPage 1 \n \nExamples Demonstrating RBP Resource Procurement Process \nThe following examples are intended to demonstrate how RBP Resources will be procured \nbased on a maximum willingness to pay, defined as a “MW-weighted average of the levelized \nprocurement cost” for the RBP, and selected through a “budget approach.”1  \nIn this example, Eeach RBP Resource Sell Offer will include an offer price and MW \nquantity pair for each Delivery Year beginning with the first year the resource is expected to reach \ncommercial operation.  PJM will then determine the “levelized procurement cost” for this resource \nto use in the selection process.2  This will be done with the Levelized Cost equation, with a discount \nrate equal to 9.5% after-tax average weighted average cost of capital (“ATWACC”).  \nLevelized Cost ($/MW-day) = Net Present Value (RBP Sell Offer price x UCAP \noffered)/Net Present Value (UCAP offered)  \n \nExample 1 \nIn the example below, Unit A offers at a price and a quantity for each Delivery Year of the \n15-year fixed term, beginning in Year 1 and ending in Year 15.  This Offer has a levelized \nprocurement cost of $101.0550/MW-day UCAP and a levelized MW value of 69.3 MW. \n \n1 Proposed Tariff, Attachment DD, section 18.5(f)(ii); Croop Aff. ¶ 29. \n2 Proposed Tariff, Attachment DD, section 18.5(f)(ii); Croop Aff. ¶ 29."},{"page":15,"startToken":2217,"endToken":2420,"text":"Croop, Exhibit No. 2 \nPage 2 \n \nExample 1: Unit A, $/MW Offer per Year \n \nUnit A \nPrice ($) \nMW \nYear 1 \n91 \n10 \nYear 2 \n91 \n10 \nYear 3 \n100 \n9 \nYear 4 \n100 \n9 \nYear 5 \n100 \n9 \nYear 6 \n100 \n9 \nYear 7 \n100 \n9 \nYear 8 \n110 \n8 \nYear 9 \n110 \n8 \nYear 10 \n110 \n8 \nYear 11 \n110 \n8 \nYear 12 \n110 \n8 \nYear 13 \n110 \n8 \nYear 14 \n110 \n8 \nYear 15 \n110 \n8 \n \n \nExample 2 \nExample 2 walks through how a set of offers are evaluated based on ranked Delivery Year \nand levelized cost for selection. The selection process is also constrained to the maximum \nwillingness to pay of the procurement.  For illustrative purposes, rather than a maximum \nwillingness to pay of $555/MW-day as PJM is proposing to use for the RBP, we assume that the \nmaximum willingness to pay is $100/MW-day, and the Final RBP Target for procurement is \n6,800 MW.   \nTable 1 illustrates the UCAP MW offered through the first four Delivery Years and a \nrepresented levelized cost offer for this resource.  Table 1, below, tracks the MW that are procured \nto determine when PJM satisfies the procurement target of 6,800 MW."},{"page":16,"startToken":2420,"endToken":2533,"text":"Croop, Exhibit No. 2 \nPage 3 \n \nTable 1: Table updates include switch Offer 1 and 2 to reflect offers in rank-order for selection and Offer 3 was updated to offer \nstarting in the 2028/29 DY.  \n \n \n \nTable 2 shows the offers in greater detail in determining the present value and levelized cost of the \noffers.  For each RBP Resource offer (Offers 1-8), there are three procurement values in the NPV \ncolumn.  The first value for each RBP Resource offer is the levelized MW UCAP.  The second \nvalue is the levelized cost, expressed as $/MW-day.  And the third value is the total revenue cost \nstream based on the RBP Resource’s levelized MW and cost."},{"page":17,"startToken":2533,"endToken":2695,"text":"Croop, Exhibit No. 2 \nPage 4 \n \nTable 2 \n \nThe procurement process will prioritize earlier Delivery Years, while being constrained to the \nfixed-budget maximum willingness to pay.  This can result in: (1) an earlier Delivery Year resource \nbeing skipped if it will violate the maximum willingness to pay constraint; (2) a procurement of \nthat resource later in the process, even if the resource was previously skipped, if procurement of a \nlower-priced resource creates additional cost headroom in the budget; and/or (3) a possibility that \nPJM will not procure the exact Final RBP Target quantity if doing so violates the maximum \nwillingness to pay constraint.  These features are demonstrated below in the selection sequencing \nexample: \nStep 1: Procure Offer 1. Offer 1 would be procured first in the commitment, given it has \nthe cheapest levelized cost in the delivery year.  This will add the below MW value to the target \nfor each Delivery Year, with a MW-weighted average levelized costs of  $50 $100."},{"page":18,"startToken":2695,"endToken":2867,"text":"Croop, Exhibit No. 2 \nPage 5 \n \n \nStep 2: Procure Offer 2. This will increase our procurement by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $93.26.  \n \nThe MW-weighted average levelized cost of $93.26 can be calculated from the PV column in \nTable 2 as the sum of levelized MW / sum of Revenue cost stream / sum of levelized MW.  \n[9,322+1,453]/[932,200 + 72,645]/ [9,322+1,453]. \nStep 3: Skip Offer 3. If Offer 3 was selected the MW-weighted average levelized cost \nwould rise to $105.75 $102.84, above the maximum willingness to pay of $100 MW/day. \nStep 4: Procure Offer 4. This will increase the procured MW by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $80.50. \n \nStep 5: Procure Offer 3.  Offer 3 may now be procured while keeping the MW-weighted \naverage levelized cost under the maximum willingness to pay.  Thus, the procurement will"},{"page":19,"startToken":2867,"endToken":2978,"text":"Croop, Exhibit No. 2 \nPage 6 \n \nprioritize and commit this resource with an earlier first Delivery Year.  This will increase the \nprocured MW by the offered MW for each applicable Delivery Year, and result in a MW-weighted \naverage levelized cost of $90.71 $88.27. \n \nStep 6: Procure Offer 5. This will increase the procured MW by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $90.63. $88.47. \n \nStep 7: Procure Offer 6. This will increase the procured MW by the offered MW for each \napplicable Delivery Year, and result in a MW-weighted average levelized cost of $93.02 $90.94"},{"page":20,"startToken":2978,"endToken":3084,"text":"Croop, Exhibit No. 2 \nPage 7 \n \nAt this point, the final target MW of 6,800 has been committed and the procurement is complete.  \nOffer 7 and 8 would not be procured through the RBP.  \nExample 3 \nIn Example 3, the selection clears short of the Final RBP Target to maintain the maximum \nwillingness to pay.  This example relies on the same example as above, except that offer prices for \nOffers 6, 7, and 8 are dramatically increased.   \nTable 3 \n \nThe procurement process runs through Steps 1 through 65, as described in Example 2, above.  \nThen, starting following in Step 6, the process begins to differ:"},{"page":21,"startToken":3084,"endToken":3228,"text":"Croop, Exhibit No. 2 \nPage 8 \n \nStep 6: Procure Offer 5, as in Example 2. This will increase the procured MW by the \noffered MW for each applicable Delivery Year, and result in a MW-weighted average levelized \ncost of $90.63$88.47. \n \nAt this point, Offers 6, 7 and 8 cannot be procured without violating the maximum \nwillingness to pay constraint.  If Offer 6 were selected, the MW-weighted average levelized cost \nwould rise to $106.73 $104.91, which is above the maximum willingness to pay of $100 MW/day.  \nSimilar violations of the maximum willingness to pay for Offers 7, and 8 would occur.  Given that, \nin this example, there are no additional offers to consider, the procurement would clear 100 MW \nshort the target, with the maximum UCAP MW procured equal to 6,700 MW for the 2031/32 \nDelivery Year."},{"page":22,"startToken":3228,"endToken":3334,"text":"UNITED STATES OF AMERICA \nBEFORE THE \nFEDERAL ENERGY REGULATORY COMMISSION \n \n) \nPJM Interconnection, L.L.C. \n \n)                              Docket No. ER26-3380-000 \n                                                                        ) \n \n \n \nVERIFICATION \n \nI, Danielle Croop, pursuant to 28 U.S.C. § 1746, state, under penalty of perjury, that I am \nthe Danielle Croop referred to in the foregoing document entitled “Affidavit of Danielle Croop, \non Behalf of PJM Interconnection, L.L.C.,” that I have read the same and am familiar with the \ncontents thereof, and that the facts set forth therein are true and correct to the best of my \nknowledge, information, and belief. \n \n/s/ Danielle Croop  \n \nDanielle Croop \nSr. Manager \nMarket Design \nPJM Interconnection, L.L.C."}],"sections":[{"p":1,"at":0,"title":"Opening text","method":"opening text","endPage":3,"endAt":0,"startToken":0,"endToken":477},{"p":3,"at":0,"title":"CERTIFICATE OF SERVICE","method":"printed heading","endPage":4,"endAt":0,"startToken":477,"endToken":541},{"p":4,"at":0,"title":"Attachment A","method":"printed heading","endPage":22,"endAt":779,"startToken":541,"endToken":3334}]}