ER26-3380-000 · 2026-08-21 · Sierra ClubNatural Resources Defense Council

Limited Protest of Sierra Club et al. to one aspect of PJM Interconnection, LLC’s proposed Reliability Backstop Procurement

1 
 
UNITED STATES OF AMERICA  
BEFORE THE  
FEDERAL ENERGY REGULATORY COMMISSION  
 
 
PJM Interconnection, LLC  
)  
)  
) 
Docket No. ER 26-3380
 
 
 
LIMITED PROTEST OF PUBLIC INTEREST ORGANIZATIONS 
 
 
Pursuant to Rule 211 of the Rules of Practice and Procedure of the Federal Energy 
Regulatory Commission (“FERC” or the “Commission”),1 Sierra Club and Natural Resources 
Defense Council (“NRDC”) (collectively, “Public Interest Organizations” or “PIOs”) submit this 
limited protest of one aspect of PJM Interconnection, LLC’s (“PJM”) proposed Reliability 
Backstop Procurement (“RBP”).2 For the reasons described below, PIOs urge the Commission to 
approve PJM’s RBP Filing with a modification to either require RBP supply to be located near to 
large loads, or to require RBP supply to be fully responsible for funding necessary network 
upgrades, which will enable the RBP to better achieve its intended objectives.  
Introduction 
 
The unprecedented number of new large load additions, mostly data centers, in the PJM 
footprint has outstripped new supply, and PJM’s capacity auctions have cleared short of the 
region’s reliability requirement for consecutive auctions despite hitting auction price caps in both 
auctions.3 These shortfalls increase the risk of loss-of-load events and sustained high-capacity 
 
1 18 C.F.R. § 385.211. 
2 PJM Interconnection, L.L.C., Reliability Backstop Procurement to Address Resource Adequacy 
Concerns Stemming from Large Loads, Docket No. ER26-3380-000 (July 31, 2026), Accession 
No. 20260731-5214 (“RBP Filing”). 
3 The auction fell short by 6,623 MW and 6,831 MW of unforced capacity in the 2027/2028 and 
2028/2029 auctions, respectively. Id. at 7–8.

2 
 
prices for existing ratepayers who are not responsible for these new shortfalls. The RBP is an 
attempt by PJM to remedy these shortfalls without shifting costs to residential and other existing 
ratepayers. PJM proposes a one-time procurement of new capacity sized to the 2028/2029 
shortfall, with costs that will be allocated to the zones and load-serving entities (“LSEs”) serving 
the new large loads that are driving the unprecedented new demand.4 PIOs generally support 
PJM’s proposal to procure new capacity and allocate costs to the large loads that require it. 
 
PIOs support many aspects of the RBP Filing. For example, PJM is admirably candid 
about the fact that the capacity shortfalls are “primarily driven by the unprecedented addition of 
large loads, most notably data centers.”5 PJM also takes seriously and attempts to realize the 
Ratepayer Protection Pledge, in which the nation’s largest data center developers and utilities 
committed to “build, bring, or buy” the new generation their new demand requires and to pay 
“the full cost of those resources.”6 In an effort to ensure that costs of the RBP are borne by the 
large loads, PJM structured the RBP charges, which are reduced by Qualifying RBP Offsets 
where load has already procured its own new capacity,7 to flow to the zones where the new large 
loads are being built under a load-adjustment methodology that the Commission has already 
approved.8 PJM’s proposal achieves this cost allocation while respecting state jurisdiction by 
 
4 See id. at 7, 31, 100–04. 
5 Id. at 1. 
6 Ratepayer Protection Pledge, The White House (Mar. 4, 2026), 
https://www.whitehouse.gov/ratepayer-protection-pledge/#signatories (“White House Ratepayer 
Protection Pledge” or “Ratepayer Protection Pledge”); see RBP Filing, supra note 2, at 16–18 
(describing the Pledge and its July 23, 2026 expansion to more than 200 utilities, developers, 
cooperatives, and governors). 
7 RBP Filing, supra note 2, at 35–44. 
8 Id. at 100–02.

3 
 
assigning costs with sufficient information on which loads are the cost causers such that states 
and retail regulatory authorities are able to assign costs appropriately.9  
 
PJM’s consent to modification is a further signal that it is committed to the most effective 
RBP possible. Rather than a present a take-it-or-leave-it package, PJM “consents to the 
Commission’s exercise of authority to modify and/or sever any element of the proposed Tariff 
and RAA language,” so long as any modification “is consistent with PJM’s overarching 
objectives in this filing.”10 PJM invites stakeholders to “comment as they feel necessary and 
appropriate.”11 PIOs accept this invitation by proposing a narrow but important modification that 
the Commission can prescribe in an order approving the RBP. 
 
PJM’s consent is bounded by its “overarching objectives in this filing,” yet the RBP 
Filing never defines these objectives explicitly.12 Fairly read, however, the RBP pursues four 
objectives: 
1. Identify and procure the correct amount of capacity; 
2. Procure new capacity that is additive to the PJM system, not a mere reshuffling of 
existing resources; 
3. Procure new capacity on time; and  
4. Ensure that the large loads that require new capacity bear their full costs without shifting 
costs to other ratepayers and while preserving state authority over retail cost allocation. 
 
This limited protest identifies a narrow but important modification that will help the RBP 
advance these objectives. PJM’s proposal currently lacks any requirement regarding the location 
 
9 Id. at 99–100. 
10 Id. at 3. 
11 Id. at 132. 
12 Id. at 131.

4 
 
of RBP supply. Instead, PJM argues that RBP resources may be located anywhere in the region 
because the interconnection process will ensure that supply is initially deliverable to load, and 
the regional transmission planning process will ensure that supply remains deliverable over the 
long term. However, as discussed below, PJM’s proposal to allow RBP supply to be located 
anywhere in the footprint will make the RBP’s success reliant on large-scale network upgrades 
that will likely cause significant delays and incur significant costs. Further, the interconnection 
process and regional transmission process risk inappropriately spreading the costs of network 
upgrades to other interconnection customers and ratepayers, rather than achieving the goal of the 
RBP—and the goals of federal and state policies—to require large loads to bear their own costs. 
To remedy this defect, this protest respectfully recommends that the Commission modify the 
RBP filing by either requiring RBP supply to be located near to demand, or by requiring RBP 
supply resources to be fully responsible for the cost of network upgrades. Such a modification 
will reduce reliance on large, slow, costly network upgrades and better achieve the RBP’s 
objectives of bringing new supply online quickly and facilitating appropriate allocation of costs 
to LSEs serving new large loads.  
 
Importantly, this modification will disturb neither the RBP’s architecture nor its schedule, 
and falls squarely within PJM’s consent. This modification will help the RBP procure the new 
capacity the region needs, where it needs it, with costs borne by the large loads that require it.  
Background 
I. 
PJM’s capacity market is facing reliability and affordability concerns as PJM 
struggles to meet data center load growth.   
 
 
PJM’s capacity market, the Reliability Pricing Model (“RPM”), worked relatively well 
for the two decades since it was first established in 2006. Its market was built for predictable, 
gradual load growth where new generation resources could be built within the market’s three-

5 
 
year forward timeline.13 However, as load growth, generation retirement, and supply chain 
development time have all increased in the past few years, PJM has recognized that the current 
state of its market is untenable.14 PJM’s markets are facing two major pain points: (1) data center 
load is growing too fast for PJM’s supply, leading to reliability concerns; and (2) PJM’s supply 
and demand imbalance is causing high capacity prices, leading to higher bills for all ratepayers.  
A. 
PJM’s capacity market faces increased reliability risks as data center load 
grows too quickly for PJM’s supply.  
 
  
First, PJM’s market is facing unprecedented load growth from rising data center demand, 
causing major supply and demand imbalances and increased reliability risks. Markets across the 
U.S. have not experienced this level of demand growth in decades. Electricity demand in the 
U.S. was relatively flat from the early 2000s until the early 2020s.15 That trend has quickly 
changed. Over the next five years, the U.S. is expecting electricity usage to grow 5.7% per 
year.16 Data centers are expected to make up 25% to 55% of the total demand growth in the U.S. 
 
13 PJM, Powering Reliability Through Market Design, 4 (May 6, 2026), https://www.pjm.com/-
/media/DotCom/library/reports-notices/special-reports/2026/20260506-powering-reliability-
through-market-design.pdf.  
14 Id. at 3.  
15 Mark Schipper & Tyler Hodge, After More Than a Decade of Little Change, U.S. Electricity 
Consumption is Rising Again, U.S. Energy Info. Admin. (May 13, 2025), 
https://www.eia.gov/todayinenergy/detail.php?id=65264.  
16 John Wilson et. al., Grid Strategies, Power Demand Forecasts Revised Up for Third Year 
Running, Led by Data Centers, 6 (Nov. 2025), https://gridstrategiesllc.com/wp-
content/uploads/Grid-Strategies-National-Load-Growth-Report-2025.pdf (“Grid Strategies 2025 
Load Growth Report”).

6 
 
through 2030.17 PJM predicts that 30 GW of large load demand will come online by 2030 and 70 
GW of large load demand will come online by 2038.18 
 
Most data center load growth through 2030 will be concentrated in the Electric 
Reliability Council of Texas (“ERCOT”) and PJM.19 Three states—Virginia, Texas, and 
California—host the highest concentration of data centers, and Virginia hosts the largest number 
of data centers in the country.20 PJM’s Dominion Zone, which covers Virginia, is expected to 
have the largest absolute increase in summer peak demand through 2030.21 RTO-wide, PJM 
expects its peak load growth to increase 65,733 MW by 2036 for its summer peak and 66,980 
MW for its winter peak.22  
 
PJM’s expected data center load growth is incompatible with current generation 
development timelines. While developers can typically build hyperscale data centers within 18 to 
 
17 Id. at 3; Jonathan Koomey et. al, Bipartisan Pol’y Ctr. & Koomey Analytics, Electricity 
Demand Growth and Data Centers: A Guide for the Perplexed, 10 (Feb. 2025),  
https://bipartisanpolicy.org/wp-content/uploads/2025/02/BPC-Report-Electricity-Demand-
Growth-and-Data-Centers-A-Guide-for-the-Perplexed.pdf.  
18 Letter from Paula Conboy, Chair, PJM Board of Managers, to PJM Stakeholders on Critical 
Issue Fast Path – Reliability Backstop Procurement and Connect and Manage, 1 (Jul. 27, 2026), 
https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-
disclosures/2026/20260727-board-decisional-letter-on-cifp-reliability-backstop-procurement-
and-connect-and-manage.pdf 1 (“PJM Board July 2026 Decisional Letter”); PJM Proposes 
Framework to Connect Data Centers Without Compromising Reliability, Affordability, PJM 
Inside Lines (Aug. 13, 2026), https://insidelines.pjm.com/pjm-proposes-framework-to-connect-
data-centers-without-compromising-reliability-affordability/.  
19 Grid Strategies 2025 Load Growth Report, supra note 15 at 5. 
20 Rebecca Leppert, What We Know About Energy Use at U.S. Data Centers Amid the AI Boom, 
Pew Research Center, Pew Research (Oct. 24, 2025), https://www.pewresearch.org/short-
reads/2025/10/24/what-we-know-about-energy-use-at-us-data-centers-amid-the-ai-boom/. 
21 Mark Schipper & Jonathan Church, Commercial Electricity Sales Have Soared in Virginia, 
Driven by Data Centers, U.S. Energy Info. Admin. (May 5, 2026), 
https://www.eia.gov/todayinenergy/detail.php?id=67664.  
22  PJM, 2026 PJM Load Forecast Report, 6 (Jan. 14, 2026), https://www.pjm.com/-
/media/DotCom/library/reports-notices/load-forecast/2026-load-report.pdf.

7 
 
24 months, new generation resources can spend 4 to 5 years in interconnection queues before 
coming online.23 Transmission upgrades can take even longer, with average timelines for 
transmission upgrades ranging from 7 to 10 years to plan, approve, and build.24 In short, it takes 
far longer to build new power plants than data centers.  
As a result of its supply and demand imbalance, PJM has fallen short of its reliability 
requirement for the past two base residual auctions (BRAs). PJM’s 2028/2029 BRA cleared 6.8 
GW short of PJM’s reliability requirement, while the 2027/2028 BRA cleared 6.5 GW short.25 
PJM expects that, without the Reliability Backstop Procurement, the 2029/2030 BRA in 
December would clear short as well.26 Falling below the reserve margin means that PJM has to 
operate with slimmer reserves and endure more reliability risks.27 NERC has classified PJM as 
an elevated risk area from 2026 to 2028 and a high risk area from 2029 onward.28 NERC predicts 
that as data center load growth continues to increase in the coming years, the risk of reliability 
shortfalls will increase as well.29 
 
23 Rachel Mural et. al, Data Centers and Large-Scale Electric Growth: The Virginia and Texas 
Experiences, Belfer Ctr. for Science and Int’l Aff. (Apr. 20, 2026), 
https://www.belfercenter.org/research-analysis/data-centers-texas-virginia-comparison.  
24 Id.  
25 PJM Capacity Auction Procures 138,318 MW of Generation Resources as Work Continues to 
Address Growing Electricity Demand, PJM Inside Lines (Jul. 14, 2026), 
https://insidelines.pjm.com/pjm-capacity-auction-procures-138318-mw-of-generation-resources-
as-work-continues-to-address-growing-electricity-demand/.  
26 RBP Filing, supra note 2, at 27.  
27 PJM Capacity Auction Procures 138,318 MW of Generation Resources as Work Continues to 
Address Growing Electricity Demand, PJM Inside Lines (Jul. 14, 2026),  
https://insidelines.pjm.com/pjm-capacity-auction-procures-138318-mw-of-generation-resources-
as-work-continues-to-address-growing-electricity-demand/ 
28 N. Am. Elec. Reliability Corp. (“NERC”), 2025 Long Term Reliability Assessment (Jan. 
2026), https://www.nerc.com/globalassets/our-work/assessments/nerc_ltra_2025.pdf.  
29 Id. at 17.

8 
 
B. 
PJM’s capacity market faces high capacity prices, causing increases in 
ratepayers’ bills.  
 
 
Second, in addition to facing increased reliability risks, PJM’s market is also facing 
unsustainably high prices. The past three BRAs cleared at the price cap, clearing at $325/MW-
day in the 2028/2029 BRA, $333.44/MW-day in the 2027/2028 BRA, and $329.17/MW-day in 
the 2026/2027 BRA. For reference, PJM’s 2024/2025 BRA cleared at $28.92/MW-day and at 
$269.92/MW-day in the 2025/2026 BRA.30 PJM’s independent market monitor (IMM) estimated 
that data centers caused 63% of the increase in prices in the 2025/2026 BRA, resulting in an 
increase of $9.3 billion in higher costs for PJM customers.31 As of January 2026, the IMM 
estimated that the costs to other customers increased by $23 billion as a result of data center 
demand in the 2025/2026, 2026/2027, and 2027/2028 BRAs.32  
 
PJM’s increased capacity costs are raising ratepayers’ bills. In June 2025, Pepco 
customers in Washington, D.C. saw their bills increase by $21 per month, and D.C.’s Office of 
Consumers’ Counsel attributed about half of that increase to the spike in capacity market 
prices.33 Similar trends are expected across PJM. In June 2026, PJM customers collectively 
began paying an additional $1.4 billion in capacity market costs driven by data center demand.34 
 
30 PJM, 2026/2027 Base Residual Auction Report, 5 (Jul. 22, 2025), https://www.pjm.com/-
/media/DotCom/markets-ops/rpm/rpm-auction-info/2026-2027/2026-2027-bra-report.ashx.  
31 Cathy Kunkel, Projected Data Center Growth Spurs PJM Capacity Prices by Factor of 10, 
Inst. for Energy Econ. and Fin. Analysis (Jul. 30, 2025),  https://ieefa.org/resources/projected-
data-center-growth-spurs-pjm-capacity-prices-factor-10 (“Kunkel, Projected Data Center 
Growth”).  
32 Monitoring Analytics, Analysis of the 2027/2028 RPM Base Residual Auction Part A, 3 (Jan. 
5, 2026), 
https://www.monitoringanalytics.com/reports/Reports/2026/IMM_Analysis_of_the_20272028_R
PM_Base_Residual_Auction_Part_A_20260105.pdf.  
33 Kunkel, Projected Data Center Growth. 
34 Id.

9 
 
 
The increase in PJM’s capacity market prices has sparked concern from the White House, 
the 13 PJM states, the PJM board, and from data center companies themselves. On January 15, 
2026, the White House’s National Energy Dominance Council and the governors of the PJM 
states signed a joint Statement of Principles Regarding PJM, urging PJM to hold a Reliability 
Backstop Auction to procure new capacity resources for data centers and allocate the costs of 
that new capacity to Load Serving Entities (“LSEs”) with new data centers that have not 
procured their own capacity.35 Similarly, on January 16, the PJM board released a board 
decisional letter that directed PJM staff to develop several proposals to address reliability and 
affordability challenges caused by large load additions in PJM.36 Like the White House and PJM 
Governors’ Statement of Principles, PJM’s board urged PJM staff to initiate a Reliability 
Backstop Procurement and address cost allocation for LSEs that are short as a result of load 
growth in their service areas.37 
 
Lastly, the largest AI data center companies and developers in the country signed the 
White House’s Ratepayer Protection Pledge—introduced on March 4, 2026, and expanded in 
July—a voluntary commitment from data center owners to build, bring, or buy the new 
generation resources needed to satisfy their new energy demands and pay the full cost of those 
resources.38  
 
35 Statement from the White House Nat’l Energy Dominance Council & PJM Governors of 
Principles Regarding PJM, 1 (Jan. 15, 2026), https://www.energy.gov/documents/statement-
principles-regarding-pjm.  
36 Letter from David E. Mills, Chair, PJM Board of Managers, to PJM Stakeholders on Critical 
Issue Fast Path - Large Load Additions (Jan. 16, 2026), https://www.pjm.com/-
/media/DotCom/about-pjm/who-we-are/public-disclosures/2026/20260116-pjm-board-letter-re-
results-of-the-cifp-process-large-load-additions.pdf.  
37 Id. at 6.  
38 White House Ratepayer Protection Pledge.

10 
 
II. 
PJM’s Reliability Backstop Proposal should be accepted with modifications to better 
achieve the RBP’s objectives. 
 
PIOs generally support PJM’s Reliability Backstop Procurement proposal but urge the 
Commission to exercise its authority to modify the proposal to better accomplish PJM’s 
objectives to: (1) procure the correct amount of capacity to meet the RBP target; (2) procure new 
capacity; (3) procure that new capacity on time; and (4) ensure that large loads that require new 
capacity bear the costs of building and connecting that capacity. Specifically, the Commission 
should accept PJM’s proposal, but only on the conditions that PJM either require RBP supply to 
be located near to large loads, which will help ensure that new supply can come online timely, 
and that reliability risks or costs associated with delivering new RBP capacity to large loads are 
not shifted to other ratepayers, or require RBP resources to cover 100% of network upgrades. 
Additionally, the Commission should encourage states to mandate take-or-pay agreements 
between LSEs and large loads to mitigate the risks of cost-shifting if a data center fails to 
materialize as expected.  
Discussion 
 
I. 
The Commission Should Only Modify PJM’s RBP Filing to Better Accomplish 
PJM’s Objectives. 
 
PJM has consented to Commission modification of “any element” of its proposal, so long 
as the modification is “consistent with PJM’s overarching objectives in this filing.”39 That 
consent is bounded by the decision in NRG Power Marketing v. FERC to not permit 
modifications that would produce “an entirely different rate design.”40 PJM’s objectives set the 
limits of what modifications the Commission can require. However, the RBP Filing does not 
 
39 RBP Filing, supra note 2, at 130–31. 
40 NRG Power Mktg. LLC v. FERC, 862 F.3d 108, 115–16 (D.C. Cir. 2017).

11 
 
include any explicit statement of PJM’s objectives. To assist the Commission’s consideration of 
modifications to PJM’s filing, PIO’s explain that the text and context of PJM’s filing reveal the 
following four objectives. 
First, procure the correct amount of capacity. PJM explains that “the primary purpose of 
the RBP Target is to determine how much UCAP MW is needed to meet the reliability 
requirement shortfall without over-procuring,”41 and the PJM Board directed the target equal the 
2028/2029 shortfall, reduced for documented bilateral contracts and self-supply arrangements for 
new capacity serving new load.42  
Second, procure new capacity. The RBP “is designed to attract new supplies of capacity 
(i.e., new ICAP), not merely incremental resource efficiencies.”43  
Third, procure new capacity on time. While the contracts are for 15 years to incentivize 
new generation,44 the need for new capacity is urgent, and therefore, the timely procurement of 
capacity is an objective of PJM’s filing.45 PJM’s ranking of offers “from earliest to latest offered 
Delivery Year” even before considering cost shows PJM’s commitment to solving the immediate 
capacity need.46  
Fourth, ensure that the large loads that require the new capacity bear its costs. The RBP 
Filing invokes the Ratepayer Protection Pledge’s commitment that large loads will pay the “full 
 
41 RBP Filing, supra note 2, at 52. 
42 Id. at 22 n.69 (quoting PJM Board July 2026 Decisional Letter at 2). 
43 Id. at 51. 
44 Id. at 42. 
45 Id. at 51 (requiring new capacity to be online no later than June 1, 2032). 
46 Id. at 75.

12 
 
cost” of the new resources their demand requires and promises an allocation under which those 
costs are not socialized to residential and other existing customers.47  
PIOs respectfully recommend that the Commission adopt this articulation of the RBP’s 
objectives and use those objectives when requiring modifications to the RBP. 
A. 
Objective One: Procure the Correct Amount of Capacity 
 
The RBP’s quantity of procured megawatts is set by administrative decision, not by 
market clearing. In the RPM auctions, the amount of capacity procured emerges from an 
administratively established demand curve interacting with competitive offers. Because the RPM 
is annual, the amount of capacity procured is revised annually and therefore responds to changes 
in the market. The RBP has no comparable self-correction. PJM sets the target, reduces it for 
verified Qualifying RBP Offsets and opt-outs, and procures the final number under fifteen-year 
commitments.48 Any over- or under-procurement is therefore locked in for fifteen years. Under-
procurement of new capacity leaves a reliability gap the RBP is designed to fix, which leaves 
customers exposed to increase loss-of-load risk. Over-procurement would mean that the 
participating zones and LSEs are stuck with fifteen years of charges for capacity they don’t need. 
PJM describes “the primary purpose of the RBP Target” as determining “how much UCAP MW 
is needed to meet the reliability requirement shortfall without over-procuring,” and it built the 
matching rules to “avoid[] over-procurement, under-procurement, and double-counting.”49 
In evaluating the RBP and any modifications proposed in this protest and by other parties, the 
Commission should ensure that the RBP procure the right amount of needed capacity. A 
 
47 Id. at 16–18. 
48 Id. at 31–34. 
49 Id. at 52, 37.

13 
 
modification that improves the correspondence between the quantity procured and the shortfall 
that actually exists advances this objective and falls squarely within PJM’s consent. 
B. 
Objective Two: Procure New Capacity 
 
The second objective recognizes that the shortfall was due to a lack of steel in the ground 
supply rather than a mispricing of existing megawatts of supply. The need for genuinely new 
supply is recognized by the PJM Board, the Governors’ Principles, and the Ratepayer Protection 
Pledge. The RBP, therefore, “is designed to attract new supplies of capacity (i.e., new ICAP), not 
merely incremental resource efficiencies, to address the current capacity shortfall and a provide 
stable, long-term source of capacity.”50 If, for example, the RBP merely allowed existing 
resources to move from the RPM to the RBP, the entire process would be an exercise in wealth 
transfers with no reliability benefits. Genuinely additive procurement, by contrast, protects 
existing customers from paying for reliability problems they did not cause while also providing 
new load with long-term sources of generation. 
The Commission should therefore make additionality a core touchstone as it evaluates the 
RBP Proposal and any proposed modification. The Commission should ask: does the resource 
add installed capacity that the system did not have before? A modification that admits 
demonstrably additive resources enlarges the pool of new supply and advances the objective 
while increasing competition, improving speed to power, and lowering costs. A modification that 
would relax the screen against reshuffled or paper capacity is contrary to the objective and 
therefore should be dismissed by the Commission. 
 
 
 
50 Id. at 51.

14 
 
C. 
Objective Three: Procure New Capacity on Time 
 
The third objective recognizes that the need for new capacity is based on an existing 
shortfall, not a mere trend or forecast. The 2027/2028 and 2028/2029 auctions have already 
cleared short, and capacity is valuable for reliability only when it is installed. Supply arriving in 
2035 does nothing for loss-of-load risk in 2029. The RBP Proposal recognizes this urgency in its 
selection criteria. The RBP only allows projects that can demonstrate a feasible commercial 
operation date of June 1, 2032, or earlier.51 Once it collects all eligible projects, PJM then selects 
offers “in rank order from earliest to latest offered Delivery Year,” and only then by levelized 
cost. This means that PJM is willing to pay a higher price for capacity that arrives sooner.52 
Timeliness of projects is also important because PJM proposes to reset the trigger for the 
Tariff’s pre-existing Reliability Backstop Auction so that no such auction can occur unless BRAs 
clear short for three consecutive Delivery Years beginning with 2032/2033. PJM justifies this by 
assuming that “all RBP Resources should have reached their respective commercial operational 
dates” by that delivery year.53 The Commission should, therefore, recognize that significant 
reliability risks hang on the ability of the RBP to actually procure new supply in the next few 
years. 
The Commission should therefore treat speed to power as a key objective when 
evaluating the RBP Proposal and any proposed modifications. Where the Commission finds that 
the RBP will not actually bring new supply online quickly, it should require changes. Where a 
modification would improve speed to power, the Commission should consider adopting such 
 
51 Id. at 72. 
52 Id. at 75. 
53 Id. at 123–25.

15 
 
modification and vice versa. Similarly, the Commission should reject proposals that exclude 
resources that can be rapidly deployed or that tolerate slippages in commercial operation date.  
D. 
Objective Four: Ensure That the Large Loads That Require New Capacity 
Bear Its Costs. 
 
PJM and its stakeholders recognize that new large loads, especially data centers, are 
uniquely responsible for the failure of recent auctions to clear at desired reserve margins. This 
failure to meet reliability standards puts everyone in the PJM footprint in danger of increased 
loss-of-load events. The RBP is designed to shore up that shortfall through new supply. Because 
these new costs are so clearly and uniquely caused by the massive expansion of data centers and 
similar new large loads, cost causation principles require that the RBP allocate costs to those new 
large loads. This is not a controversial position. The nation’s largest data center developers 
pledged to pay the “full cost” of the new resources their demand requires.54 The thirteen PJM 
governors pledged to direct these costs to “new data center loads that have not otherwise 
procured capacity or agreed to be curtailable.”55 PJM promises that RBP costs “will not become 
stranded costs, which would ultimately be socialized.”56 It is therefore crucial that the RBP fulfill 
its objective of ensuring that new large loads actually pay for the new supply they need. 
The Commission should apply this objective when evaluating the RBP and any proposed 
modifications. Commission and PJM jurisdiction over ratemaking, however, extends only so far. 
States set retail rates, which are actually charged to individual ratepayers—be they residential 
customers or data centers—for capacity charges assigned to LSEs by PJM. It is therefore 
 
54 Id. at 17 (quoting White House Ratepayer Pledge). 
55 Id. at 12 (quoting Statement from the White House Nat’l Energy Dominance Council & PJM 
Governors of Principles Regarding PJM, 2 (Jan. 15, 2026), 
https://www.energy.gov/documents/statement-principles-regarding-pjm). 
56 Id. at 109.

16 
 
imperative that states and LSEs have the information necessary to assign costs to the new large 
loads that are responsible for the need for this new supply procured through the RBP. The 
Commission should reject any component of the RBP that fails to sufficiently meet this cost 
allocation objective and should adopt the modifications that best realize this objective. 
Taken together, the four objectives listed above state what PJM designed the RBP to do: 
procure the correct amount of new capacity, on time, at the cost of the large loads that require it. 
The Commission should evaluate any proposed modifications to PJM’s RBP filing against these 
objectives and should adopt PIOs’ narrow modification described below, which will help ensure 
that the RBP meets PJM’s objectives. 
II. 
The Commission should modify the RBP by requiring RBP supply to be located new 
large loads in order to minimize delays and the risk of cost-shifting.  
 
To ensure that PJM accomplishes its objectives to procure the (1) correct amount of (2) 
new capacity (3) on time to meet the 2028/2029 shortfall and (4) allocate the costs of that 
capacity to new data center load, PJM must include a locational deliverability requirement for 
RBP Sell Offers. Prioritizing RBP resources that are closer to zones with large load growth will 
ensure that RBP resources are not bogged down with large network upgrades that can cause 
delays or high costs that could be passed onto other customers through the interconnection queue 
or RTEP. Failing to include a locational requirement in the RBP imperils the RBP’s ability to 
achieve its objectives in several ways. First, the absence of a locational requirement increases the 
likelihood that high network upgrade costs may prevent RBP resources from showing up at all, 
failing the objectives to procure (1) the correct amount of (2) new capacity. Similarly, because 
the absence of a locational requirement makes it more likely that RBP resources may require 
significant network upgrades, it also increases the risk of network upgrade delays, failing the 
objective to bring resources online quickly to meet the 2028/2029 shortfall. Furthermore, the

17 
 
high costs of network upgrades could also be spread to other interconnection customers or to 
residential customers through the RTEP process, failing the objective to allocate RBP costs to 
data centers. The Commission should modify PJM’s proposed tariff to correct this problem by 
including a requirement that RBP resources be located in the same zone as the large loads they 
serve. This locational deliverability requirement would address each of the problems described 
above and help better accomplish each of the RBP’s objectives.  
Additionally, the Commission could modify PJM’s RBP filing by requiring RBP 
resources to pay 100% of network upgrade identified through the interconnection process. This 
modification would prevent initial network upgrade costs from being shifted to other 
interconnection customers or flowing through to ratepayers. However, this modification would 
not prevent cost-shifting that could occur if future RTEP processes identify the need for upgrades 
to maintain deliverability. Similarly, this modification would not prevent large, costly, slow 
network upgrades from delaying or deterring the successful completion of RBP supply projects. 
For these reasons, a modification to require RBP supply to pay 100% of the network upgrade 
costs identified in the interconnection process is only a partial solution that will not accomplish 
all of the RBP’s objectives. Accordingly, PIOs respectfully suggest that the Commission view 
this modification as additional to a requirement that RBP supply be located near large loads, not 
as a completely sufficient alternative modification.  
Currently, PJM’s RBP proposal plans to procure capacity RTO-wide, with its 
procurement target based on the region-wide shortfall.57 PJM does not intend to match specific 
supply to specific demand or consider locational constraints in the RBP.58 PJM’s proposal 
 
57 Id. at 33.  
58 Id.

18 
 
acknowledges that there are locational considerations for resource adequacy but states that it 
does not need to consider locational constraints in the RBP because PJM does not have the 
information necessary to determine the locational parameters for the RBP’s 15-year commitment 
term.59 PJM worries that including locational considerations in the RBP would result in over- or 
under-procurement.60 PJM asserts that its interconnection process and its RTEP process will 
ensure the deliverability of RBP resources.   
Though PJM’s concern about the risk of over- and under-procurement with respect to 
locational deliverability appears reasonable, PJM fails to properly consider the reliability and 
affordability risks associated with having resources located farther away from the load they 
intend to serve. PJM’s failure to consider locational deliverability in supply bids in the RBP will 
risk: (1) deliverability issues due to transmission constraints if RBP resources are located far 
away from the zones with large loads; (2) higher costs from the new transmission infrastructure 
needed to get new capacity to new large load in different zones, which will be socialized to other 
interconnection customers or ratepayers; and (3) substantial delays to the deliverability of RBP 
supply due to the slow pace of network upgrade construction. These outcomes are not consistent 
with PJM’s objectives to procure 6.8 GW of new capacity by 2032 (at the latest) and to allocate 
the costs of that capacity to data centers procuring capacity through the RBP. To better align the 
RBP with PJM’s objectives, the Commission should modify PJM’s proposal to prioritize RBP 
resources that are in the same zones as large loads, or at least to include requirements that new 
RBP supply will be responsible for 100% of the costs of network upgrade needed to ensure their 
deliverability.  
 
59 Id. at 34.  
60 Id.

19 
 
A. 
PJM’s proposal to exclude a locational requirement for RBP generation bids 
could lead to reliability risks.  
 
PJM’s decision to exclude a locational requirement in the RBP will increase risks of non-
delivery or delayed delivery if generation resources procured through the RBP are outside of 
zones with growing large load demand. As proposed, the RBP relies on the assumption that PJM 
will be able to build network upgrades quickly enough to get RBP resources online in the next 
three to six years.61 This assumption is overly ambitious at best and unrealistic at worst. Recent 
analysis shows that most new power plants faced network upgrade timelines of at least three 
years after those projects had already cleared the queue.62 As of April 2026, about half of the 
projects in TC2 were delayed by baseline upgrades, with average construction timelines of about 
5 years.63 Projects just entering the queue or without a signed interconnection agreement will 
take much longer. Resources that require larger network upgrades, like resources that are farther 
away from load, will likely take longer to interconnect due to network upgrade construction 
delays. 
The risks associated with large network upgrades are not speculative. Recently, the high 
network upgrade costs and long construction timelines affected several projects in PJM’s 
Reliability Resource Initiative (“RRI”)—an interconnection fast-track that aimed to procure 
purportedly “shovel-ready” projects that could come online quickly to meet PJM’s near-term 
capacity needs. However, the RRI procured large projects that resulted in the need for large, 
 
61 PJM aims to get resources online by the 2028/2029 delivery year at the earliest and by the 
2032/2033 delivery year at the latest. RBP Filing, supra note 2, at 38–40. 
62 Yamit Lavi et. al, Unlocking the Grid, NRDC (Apr. 7, 2026),  
https://www.nrdc.org/resources/unlocking-grid.  
63 Devin Leith-Yessian, PJM Receives 811 Interconnection Requests in Queue Cycle 1, RTO 
Insider (Apr. 29, 2026), https://www.rtoinsider.com/131291-pjm-receives-811-interconnection-
requests-queue-cycle-1/.

20 
 
lengthy network upgrades, causing a significant proportion of RRI projects to withdraw after 
being assigned network upgrade costs. 10 out of 51 RRI projects withdrew from the 
interconnection process, with two projects dropping out before being studied, and eight projects 
dropping at the first decision point in TC2.64 2 of the 3 largest RRI projects withdrew in 
November 2024, shortly after PJM determined their network upgrade costs.65 The two projects 
represented a quarter of the RRI’s total capacity.66 The RRI’s 28% drop-out rate67should have 
been a lesson for PJM: procuring resources that need large, time-consuming network upgrades 
increase the likelihood that those resources will not be able to deliver the capacity that resources 
need by PJM’s desired commercial operation date. To avoid making the same mistake as it did in 
the RRI, PJM should focus on procuring resources that will require smaller, less costly network 
upgrades.  
If PJM’s objectives are to (1) procure enough (2) new capacity (3) to meet the 2028/2029 
shortfall by 2032 at the latest, then PJM should prioritize resources that can be built the fastest. 
Resources that are farther away from zones with RBP allocations will most likely require large 
 
64 Claire Lang-Ree & Tom Rutigliano, Unlocking Storage is the Solution to Data Center Strain, 
NRDC (Jan. 29, 2026), https://www.nrdc.org/bio/claire-lang-ree/unlocking-storage-solution-
data-center-strain.  
65 PJM maintains an interconnection queue tracker. See PJM, Cycle Service Request 
Status, https://www.pjm.com/planning/m/cycle-service-request-status (last accessed August 20, 
2026). RRI withdrawals were identified by cross-referencing the withdrawals in the tracker by 
Project ID number. See also PJM, RRI Additional Summaries, slides 6–8 (May 6, 
2025), https://www.pjm.com/-/media/DotCom/committees-
groups/committees/pc/2025/20250506/20250506-rri-addendum---post-meeting.pdf. The 
withdrawn RRI projects are AH1-676, AH1-690, AH1-697, AH1-705, AH1-707, AH1-717, AH1-
720, AH1-726, and AH1-729, and AH1-735 totaling over 3.76 gigawatts of capacity.   
66 Id. The two largest withdrawals are AH1-690 and AH1-676. 
67 Claire Lang-Ree & Tom Rutigliano, Unlocking Storage is the Solution to Data Center Strain, 
NRDC (Jan. 29, 2026), https://www.nrdc.org/bio/claire-lang-ree/unlocking-storage-solution-
data-center-strain.

21 
 
network upgrades that will take longer to build. To ensure that the RBP selects the fastest, most 
efficient resources to meet PJM’s objectives, the Commission should modify PJM’s proposal to 
require that PJM consider locational deliverability in RBP sell offers. The Commission can 
either: (1) require RBP resources to be located within zones with RBP allocations or (2) add 
locational proximity into the RBP’s scoring criteria, so that projects sited near load growth areas 
are scored higher.  
Commission precedent supports the inclusion of a locational deliverability requirement in 
the RBP. The Commission previously found that PJM must include locational requirements in its 
capacity market structure to ensure that supply is deliverable to the LSEs it is serving. The lack 
of a locational element in PJM’s capacity market was one of the primary reasons that the 
Commission found PJM’s capacity market unjust and unreasonable before establishing the 
RPM.68 The Commission found that “the lack of a locational element [in the RPM] is a 
contributing factor to reliability problems within PJM”69 and that the lack of a locational element 
created a market structure that did not ensure that supply was available to all areas.70 In that 
proceeding, PJM itself acknowledged that its capacity market structure was flawed because it 
allowed LSEs to contract with resources located anywhere within PJM regardless of whether 
transmission constraints would prevent delivery.71 Yet, in its RBP proposal, PJM will procure 
capacity from anywhere within PJM without regard to whether it can be delivered in a timely and 
reliable manner to the zones with RBP allocations. The Commission’s and PJM’s reasoning in 
 
68 Order Denying Rehearing and Approving Settlement Subject to Conditions, 117 FERC ¶ 
61,331 at P 20 (2006).  
69 Initial Order on Reliability Pricing Model, 115 FERC ¶ 61,079 at P 49 (2006).   
70 Order Denying Rehearing and Approving Settlement Subject to Conditions, 117 FERC ¶ 
61,331 at P 2 (2006). 
71 Id. at P 14.

22 
 
the 2006 order makes clear that PJM’s current RBP will not accomplish PJM’s objectives to 
procure enough capacity to meet the RBP target on time because the RBP does not ensure that 
RBP supply can actually be delivered to RBP buyers by the time it is needed. Even if the 
interconnection process and RTEP can ensure eventual deliverability after the RBP closes, those 
processes cannot ensure that RBP supply will come online on time without lengthy network 
upgrade delays.  
PJM’s proposal does not explain why the lack of a locational element in its proposal will 
not lead to deliverability concerns. PJM argues that it will not calculate locational parameters 15 
years out because PJM does not have the information needed to determine those parameters 15 
years ahead. PJM states that if it were to include locational parameters in the RBP based off of 
today’s conditions, then the results would be inevitably skewed based on “nothing more than 
speculation as to the state of the system ten and fifteen years from now,” leading to over-
procurement or under-procurement.72 PJM adds that the inclusion of a locational parameter 
“would ignore the fact that ‘PJM’s interconnection process ensures the initial deliverability of 
new capacity to the RTO.’”73 PJM also notes that the RTEP process “studies and addresses any 
transmission upgrades needed to ensure ongoing deliverability of capacity resources.”74 Each of 
these rationales for excluding a locational deliverability requirement is flawed. 
To PJM’s first point, that it does not have the information needed to project locational 
parameters 15-years ahead, PJM does have some locational information that it can use to project 
load demand in certain areas, similar to the three-year forward forecast it uses in the RPM or 
 
72 RBP Filing, supra note 2, at 34. 
73 Id. at 34.  
74 Id. at 34.

23 
 
long-term load forecasts for resource adequacy planning.75 PJM can choose its comfort level 
with projecting locational parameters, whether it wants to use projections for three years, five 
years, ten years, or fifteen years, but any locational considerations will be better than none. For 
example, the Capacity Emergency Transfer Objective and Capacity Emergency Transfer Limit 
(“CETO/CETL”) figures that PJM used for the 2028/2029 auction could be a helpful parameter. 
While those CETO/CETL limits might not necessarily persist for the full 15-year term of the 
RBP contracts, they are a reasonable input for a locational deliverability requirement, especially 
because they correspond to the same auction that led to the shortfall the RBP attempts to resolve. 
PJM knows the load growth hotspots right now, like Northern Virginia, Ohio, and Pennsylvania, 
and can reasonably expect that load will continue to grow in those areas, considering that there 
are no indications that load growth is slowing down.76 PJM should prioritize generation closer to 
those areas that matches the load growth in those areas, where PJM knows load is growing the 
fastest. 
  PJM’s second point, that the results of the RBP will be inevitably skewed based on 
“nothing more than speculation as to the state of the system ten and fifteen years from now,” is 
inconsistent with the rest of PJM’s proposal. The RBP target is the reliability shortfall from the 
2028/2029 BRA, which is based on load forecasts from EDCs. The RBP will procure 15-year 
contracts to meet that forecasted load. The RBP itself is speculating that that projected load will 
show up and that 15 years of capacity needs to be procured for that load. The RBP is betting on 
 
75 See PJM, 2026 PJM Load Forecast Report (Jan. 14, 2026), https://www.pjm.com/-
/media/DotCom/library/reports-notices/load-forecast/2026-load-report.pdf. 
76 Zachary Skidmore, Dominion Sees No Slow Down in Northern Virginia Data Center Demand, 
Proposes New Electricity Rates for Large Load, Data Ctr. Dynamics (May 2, 2025), 
https://www.datacenterdynamics.com/en/news/dominion-reports-high-data-center-demand-in-
northern-virginia-proposes-new-electricty-rates-for-large-load-customers/.

24 
 
the state of the system fifteen years out from the 2028/2029 delivery year using load growth 
estimates for 2029. It is unclear why PJM would find that speculation acceptable enough to 
assign 15-year obligations to LSEs but not enough to develop locational parameters based on 
those same projections. PJM already knows where the load growth concerns are today and is 
procuring capacity for that load. Consequently, PJM should at least optimize planning to ensure 
that the capacity can meet the load its planning for.  
To PJM’s third point, the idea that the interconnection process and RTEP will catch all 
deliverability concerns, ignores the fact that one of PJM’s objectives is to get capacity online 
quickly, and ignores the goal of making sure large loads pay their fair share of costs, because 
RTEP is socialized to all load, as detailed in the next section. The interconnection process and 
RTEP can ensure that supply will eventually be deliverable but cannot ensure that supply will be 
deliverable to load on time. The risks of network upgrade delays are known, especially for large 
projects. Resources located outside of zones with RBP allocations will require larger network 
upgrades to ensure deliverability than resources that are located within the zones. This may 
require lengthier interconnection studies and will likely require longer network upgrade 
development time. With the average network upgrade timeline taking at least 3 years77 after a 
resource makes it through the queue, which now takes 1 to 2 years,78 the RBP is increasing the 
likelihood that resources will be delayed in coming online on time to meet the RBP’s objectives. 
In short, a locational deliverability requirement will help PJM achieve the RBP’s objective of 
promptly bringing online much-needed new supply.   
 
77 Yamit Lavi et. al, Unlocking the Grid, NRDC (Apr. 7, 2026),  
https://www.nrdc.org/resources/unlocking-grid. 
78 PJM, Fact Sheet: New, Faster Generation Interconnection Process (May 21, 2026), 
https://www.pjm.com/-/media/DotCom/about-pjm/newsroom/fact-sheets/interconnection-reform-
progress-fact-sheet.pdf.

25 
 
It’s important to note that, as PJM mentions in its proposal, if load patterns do change, 
PJM can use RTEP’s annual studies to identify any transmission upgrades needed to ensure 
ongoing deliverability of RBP resources. However, even in this scenario, a locational reliability 
requirement will likely minimize the network upgrades needed. The zones experiencing 
significant large load growth are more likely to continue to do so than other zones. Locating RBP 
supply near to those zones will be more likely to ensure smaller network upgrades and faster 
deliverability timelines in the immediate term and will minimize the need for future network 
upgrades in comparison to PJM’s proposal to permit RBP supply to be developed anywhere in 
the region.   
The Commission could modify PJM’s proposal to address locational deliverability in a 
few ways. PJM could require RBP resources to be located within a certain zone or require that 
RBP resources be located within a reasonable electrical radius to large loads to minimize the risk 
of lengthy network upgrades. In the alternative, PJM could add a locational component to its 
selection criteria, where proximity to the top 5 load growth zones can be weighed alongside 
commercial operation date, but before considering price. This would ensure that projects outside 
of a particular zone can participate, but those closer to the zone would be prioritized. By 
choosing resources based off of commercial operation date and location first, PJM could ensure 
that the RBP procures the resources that can come online the fastest. PJM is concerned that 
modifications to the filing could jeopardize the commencement of the RBP in September and 
encourages the Commission to ensure that proposed modifications allow for quick and efficient 
implementation.79 The modifications suggested above will not jeopardize PJM’s timeline. The 
modifications recommended in this section do not require that PJM get their locational 
 
79 Id.

26 
 
parameters perfect; they only require that PJM do its best with the information it already has. The 
various modifications proposed in this section are flexible and allow the Commission and PJM to 
consider which modifications can be done within PJM’s desired timeline. The modifications 
suggested will both ensure that PJM can begin the RBP in September and that resources can be 
delivered on time without unnecessary upgrade delays.  
B. 
PJM’s proposal will unjustly and unreasonably shift costs to other 
interconnection customers or ratepayers.  
 
Looking beyond the deliverability risks associated with omitting a locational requirement 
in the RBP, PJM’s proposal also fails to consider the cost-shifting risks that the proposal will 
create. PJM argues that inclusion of a locational parameter in the RBP would “ignore the fact 
that ‘PJM’s interconnection process ensures the initial deliverability of new capacity to the 
RTO,’”80 but PJM fails to consider that its reliance on the interconnection process to guarantee 
initial deliverability ignores the risks of shifting costs to other interconnection customers or 
ratepayers. Although PJM’s interconnection process can ensure that RBP resources will initially 
be deliverable to LSEs with RBP allocations (once network upgrades are complete), the RBP’s 
lack of a location requirement increases the likelihood that network upgrade costs and 
interconnection study costs will be higher if supply resources are located farther away from the 
zones they will serve. Other resources in interconnection clusters may share the initial costs of 
connecting RBP resources. Those costs will then be passed onto other ratepayers in higher 
energy costs. This kind of cost-shifting is inconsistent with PJM’s objective to allocate all costs 
of procuring capacity for new large loads to those large loads. Additionally, this cost-shifting is 
 
80 RBP Filing, supra note 2, at 34.

27 
 
inconsistent with the Ratepayer Protection Pledge and the Commission’s June 18 Large Load 
Order.81   
1. 
The RBP will likely shift costs of network upgrades to other 
interconnection customers and to all PJM load.  
The RBP raises cost-shifting concerns for network upgrades in the interconnection 
process. Order No. 2023 requires transmission providers to initially allocate network upgrade 
costs among interconnection customers, based on a proportional impact method.82 The Order 
also requires costs of network upgrades at substations to be allocated equally among each 
generation facility interconnection to the same substation.83 The lack of a locational element in 
the RBP raises the likelihood that RBP resources could be located farther away from LSEs with 
RBP allocations, increasing the risk of needing larger network upgrades to ensure that the RBP 
resources will be deliverable. These network upgrades are inefficient and unnecessary, as a 
locational requirement in the RBP would mitigate the need for these upgrades and likely yield 
deliverable capacity more quickly and cheaply. Interconnection customers in the same cluster as 
one of these RBP resources will need to share in those network upgrade costs if the customers 
interconnect to the same substation or in any way benefit from or contribute to the need for the 
upgrade. In this scenario, higher network upgrade costs from a network upgrade that ensures load 
deliverability from an RBP resource to a zone with an RBP allocation means higher shared costs 
for every resource in that cluster.  
 
81 See White House Ratepayer Protection Pledge; see also Order Instituting Proceeding Under 
Section 206 of the Federal Power Act, 195 FERC ¶ 61,211 (Jun. 18, 2026) (“Large Load 
Order”). 
82 Improvements to Generator Interconnection Procedures and Agreements, 184 FERC ¶ 61,054 
at P 453 (2023) (“Order No. 2023”).  
83 Id. at P 454.

28 
 
Generators will pass these higher costs onto ratepayers. PJM acknowledges this 
possibility for customers of RBP resources, stating in its proposal that “[s]ellers will have the 
opportunity to reflect on the anticipated cost of any network upgrades, estimated or final, 
associated with the RBP Resource’s provision of capacity in the RBP Sell Offer.”84 Non-RBP 
resources in the same cluster will similarly have to consider how to price their generation to 
recover costs of high shared network upgrades. Thus, inefficient planning in the RBP will result 
in unnecessarily high network upgrades and subsequently result in higher prices from generators 
and higher costs for ratepayers.  
2. 
The RBP will likely shift the costs to study RBP resources to other 
interconnection customers. 
Additionally, the RBP raises cost-shifting concerns for interconnection study costs caused 
by RBP resources. Under Order No. 2023, costs of cluster studies are shared between 
interconnection customers on a per capita and pro rata MW basis.85 Order No. 2023’s study cost 
allocation requirements acknowledge that cluster study costs are affected by the number of 
interconnection requests and the size of the proposed generators in each cluster.86 Order No. 
2023 recognizes that the megawatt size of projects in an interconnection cluster contributes 
significantly to the total cost of a cluster study.87 The Order also recognizes that complex studies 
can lead to correspondingly higher study costs.88 Without a locational component in the RBP, 
RBP resources may need more complex studies to ensure load deliverability if they are located 
 
84 RBP Filing, supra note 2, at 56.   
85 Order No. 2023, supra note 81 at P 416. 
86 Id. at P 418. 
87 Order No. 2023, supra note 81 at P 418. 
88 Id. at P 418.

29 
 
farther away from LSEs with RBP allocations. The costs of these complex studies could increase 
costs for other customers in the cluster. PJM could decrease the risk of this cost-shifting by 
considering locational deliverability in the RBP prior to the interconnection process. Instead, 
PJM chooses to unnecessarily burden other interconnection customers with an increased risk of 
complex cluster studies and higher study costs.  
3. 
PJM’s proposal will unjustly and unreasonably shift costs to all PJM 
customers through RTEP.  
PJM’s proposal also risks shifting significant transmission costs to all PJM customers 
through the RTEP process. PJM’s RBP filing reasons that a locational element in the RBP is 
unnecessary because PJM’s RTEP will study and address any transmission upgrades needed to 
ensure the deliverability of capacity resources to load.89 Unlike in the standard interconnection 
process, where generation pays for costs of upgrades, reliability-driven upgrades identified 
through RTEP are paid for by load. As a result, the costs of any reliability-driven upgrades that 
are caused by any transmission constraints associated with RBP resources and identified through 
RTEP will be unjustly and unreasonably socialized to all load in PJM, which fails to achieve 
PJM’s objective to allocate RBP costs to LSEs with large loads and is inconsistent with the 
Ratepayer Protection Pledge.  
In 2024, utilities in 7 PJM states passed $4.3 billion in data center-driven transmission 
costs onto customers in their service area.90 In early 2026, PJM’s board approved $11.8 billion in 
 
89 RBP Filing, supra note 2, at 34.  
90 Mike Jacobs, Union of Concerned Scientists, Connection Costs: Loophole Costs Customers 
Over $4 Billion to Connect Data Centers to Power Grid, Union of Concerned Scientists, 3 (Sep. 
2025), https://www.ucs.org/sites/default/files/2025-
09/PJM%20Data%20Center%20Issue%20Brief%20-%20Sep%202025.pdf.

30 
 
transmission projects identified as a part of PJM’s RTEP window 1.91 PJM’s baseline project 
spending almost doubled from its spending in 2024 and 2023, with baseline projects costing $5.9 
billion in the 2024 RTEP and $6.6 billion in 2023.92 The increase in upgrades are driven, in large 
part, by increases in data center load in Virginia and throughout the PJM region overall.93 For 
instance, $4.8 billion of the 2025 RTEP upgrades will go to the Dominion area alone.94  
As baseline project spending increases, PJM needs to be more efficient in its transmission 
planning. There is growing frustration surrounding RTEP spending on data center-driven projects 
and how those costs are being allocated to PJM customers.95 Ignoring deliverability constraints 
in the RBP will increase the likelihood that inefficient, costly upgrades will be identified in 
PJM’s RTEP and will be unjustly and unreasonably allocated to load.  
4. 
The RBP risks cost shifts that are inconsistent with the Ratepayer 
Protection Pledge and the Commission’s Large Load Orders. 
  
a. 
Cost-shifts in the RBP violate the Ratepayer Protection Pledge 
and the Commission’s June 18th Large Load Orders. 
 
The lack of a locational element in the RBP will likely cause cost-shifts that violate the 
Ratepayer Protection Pledge and the Commission’s June 18th Large Load Orders. The 
 
91 Ethan Howland, PJM Board Approves $11.8B Transmission Expansion Plan, Util. Dive (Feb. 
17, 2026), https://www.utilitydive.com/news/pjm-rtep-transmission-expansion-plan-dominion-
nextera-exelon/812311/.  
92 Id. 
93 PJM Reviews Preliminary Recommended Projects for 2025 RTEP Window 1, PJM Inside 
Lines (Dec. 10, 2025), https://insidelines.pjm.com/pjm-reviews-preliminary-recommended-
projects-for-2025-rtep-window-1/.  
94 Ethan Howland, PJM Board Approves $11.8B Transmission Expansion Plan, Util. Dive (Feb. 
17, 2026), https://www.utilitydive.com/news/pjm-rtep-transmission-expansion-plan-dominion-
nextera-exelon/812311/.  
95 Complaint Requesting Fast Track Processing of the Maryland Office of People’s Counsel, at 
17–19, Docket No. EL26-63 (May 7, 2026), Accession No. 20260507-5026.

31 
 
Commission should modify PJM’s proposal to ensure that other PJM customers do not pay for 
costly upgrades for RBP resources. The Commission can easily fix this issue by either: (1) 
requiring RBP supply to be in the same LDA as large loads; or (2) requiring RBP supply to be 
100% responsible for network upgrade costs, which will be reasonably allocated to LSEs with 
RBP allocations through RBP supply offers.  
First, the Commission should modify PJM’s proposal because it violates the Ratepayer 
Protection Pledge. The Ratepayer Protection Pledge was signed by 7 of the largest U.S 
hyperscalers, more than 250 utilities and cooperatives, and 38 data center developers. In this 
pledge, companies that signed on promised to cover all new delivery upgrades required to 
service network upgrade costs to ensure that those costs are not shifted to ordinary households.96 
In the RBP context, this pledge would cover the network upgrade costs identified in the 
interconnection process and through RTEP. The signees also promised to procure the generation 
resources needed for their energy demand and pay the full cost of procuring that energy.97 This 
promise should include covering both the costs of building network upgrades and the study costs 
of connecting needed supply.  
The RBP does not currently allow data centers to fulfill their promise to its full extent. 
Without a locational requirement for RBP resources, RBP resources may be located far from the 
load they are meant to serve—increasing the likelihood for expensive network upgrades needed 
to get the capacity to the loads it intends to serve. Data center companies that have promised to 
pay for all of the network upgrades needed to serve their load cannot do so if the costs of their 
network upgrades are shared by other new generators through the interconnection process or 
 
96 White House Ratepayer Protection Pledge.  
97 Id.

32 
 
allocated to all load through the RTEP. The Data Center Coalition acknowledged some of this 
tension in its RBP proposal, stating that an RBP with no locational commitment constraint could 
increase RTEP costs over time as PJM identifies transmission reliability constraints.98 As the 
DCC recognizes, data centers cannot fulfill their promise to pay for all network upgrades if the 
costs of network upgrades are shifted to other customers through PJM’s current planning 
processes. To prevent this adverse outcome, the Commission should modify PJM’s proposal to 
either require the RBP to procure resources in the same LDA as, or near to, large loads, in order 
to ensure that transmission constraints are mitigated. 
Similarly, the current RBP structure will increase study costs from the need for larger 
upgrades and complex modeling to determine deliverability, which, under current rules, will be 
spread between generators in the same cluster as RBP resources. Though RBP resources serving 
data centers will be allocated some of those costs, the higher cost of connecting these resources 
will be spread to generators other than RBP resources, and data centers will not pay for those 
costs. This structure does not allow for data centers to cover the full costs of their generation as 
they promised to in the Ratepayer Protection Pledge. To allow data centers to carry out this 
promise, PJM’s RBP must include a locational element to mitigate the study costs assigned to 
other generators, or PJM must assign the increased study costs caused by RBP resources to those 
resources.  
 
 
 
98 PJM, Joint EDCs and Data Center Coalition Reliability Backstop Procurement Package 
Executive Summary, 5 (June 30, 2026), https://www.pjm.com/-/media/DotCom/committees-
groups/cifp-rbp/2026/20260630/20260630-item-02f---joint-edcs-and-data-center-coalition---rbp-
--executive-summary.pdf.

33 
 
b. 
Cost-Shifts in the RBP violate the Commission’s June 18 Large 
Load Order.  
 
Second, the RBP is unjust and unreasonable because the proposal is inconsistent with the 
Commission’s Large Load Order. As described in the Commission’s June 18 Large Load Order, 
the Commission has a duty to address the risk of cost shifting among transmission customers that 
may result in unjust and unreasonable rates.99 PJM’s current RBP proposal will likely result in 
unjust and unreasonable rates by shifting RBP costs to other transmission customers through 
PJM’s interconnection process and through RTEP.  
The Commission’s June 18 Large Load Order preliminarily found PJM’s tariff to be 
unjust and unreasonable because it lacks adequate mechanisms to mitigate the risk of cost 
shifting among transmission customers.100 The Commission is concerned that PJM’s tariff does 
not ensure that large load customers would be ultimately response for costs incurred to provide 
transmission service, including the cost of network upgrades.101 Additionally, the Commission is 
concerned about inefficient and unnecessary infrastructure development that leads to unjust and 
unreasonable rates through unnecessarily high network upgrade costs.102 
The RBP proposal confirms all the Order’s worries about PJM’s inadequate cost-shifting 
protections. To the Commission’s first concern, the RBP relies on the interconnection process 
and RTEP to ensure deliverability but includes no adequate mechanism to mitigate the cost-shifts 
associated with those processes. Stakeholders alerted PJM to these cost-shifting concerns in the 
proposal in stakeholder discussions, but PJM’s proposal does not address these issues. To the 
 
99 Large Load Order, supra note 80, at P 68.  
100 Id. at P 66.  
101 Id.  
102 Id.

34 
 
second concern, the current RBP structure will not ensure that large load customers will be 
ultimately responsible for costs incurred to provide their transmission service. The RBP will 
likely spread higher costs to generators due to complex load deliverability studies and higher 
network upgrade costs for the cluster. Load will likely experience higher costs through RTEP as 
the RTEP will likely identify costly transmission upgrades to deliver capacity from RBP 
resources. In either case, end ratepayers are ultimately responsible for costs incurred to provide 
transmission service to data centers, not the data centers themselves. 
 Lastly, the lack of a locational requirement in the RBP will likely lead to inefficient and 
unnecessary infrastructure buildout. If the RBP procures RBP resources that are farther away 
from the LDA it will serve, PJM may need to build transmission infrastructure to get the capacity 
from the RBP resource to the LDA. This result is inefficient and unnecessary when there may be 
resources closer to the LDA that could serve the load. This procurement structure could lead to 
unnecessary build-out and unnecessary network upgrade costs, which as the Commission points 
out in its June 18 Order, would be unjust and unreasonable.  
III. 
The Commission should encourage PJM states to do their part in allocating costs to 
data centers.   
 
It is important to note, as PJM does in its filing, that states have a large part to play in 
ensuring that cost allocation at the retail level adequately allocates RBP costs to data centers 
receiving capacity from RBP resources. The Commission has acknowledged states’ role in cost 
allocation as well, stating in its June 18 Large Load Order that “states determine how 
Commission-approved rates are collected among the relevant retail consumers along with the 
rates for state-jurisdictional matters.”103 The PJM Governors affirmed this role in their Statement 
 
103 Id. at P 69.

35 
 
of Principles Regarding PJM, in which the 13 PJM governors agreed to use all available 
authorities to ensure that LSEs allocate the cost to procure new capacity through the RBP to new 
data center loads.104 States must take this responsibility seriously. If not, the states risk spreading 
RBP costs to all load. 
PJM’s filing states that the PJM states will have a central role in protecting their 
ratepayers from cost shifts from the RBP.105 The RBP relies on each of the states to refine cost 
allocation to determine which retail loads should be allocated the cost of the procurement.106 If 
states do not adopt adequate tariffs, costs from the RBP may be allocated to residential customers 
or small industrial or commercial customers.  
Under the current RBP proposal, LSEs that forecast data center load and procure capacity 
for that load in the RBP may be left with enormous costs if that forecasted load does not show 
up. Because PJM proposes that LSE defaults will result in the allocation of the defaulted costs to 
other LSEs hosting large loads, if one LSE cannot cover the stranded costs resulting from data 
centers failing to materialize, then the rest of the LSEs with RBP obligations may be left holding 
the bill. There is a real risk of this outcome occurring. The CEOs of Constellation Energy and 
Vistra Energy have both warned their investors about the risks of overbuilding.107 In a 2025 
earnings call, Vistra CEO James Burke stated that load “interconnect queues . . . may be 
overstated from three to five times what might actually materialize in regulated markets or 
 
104 Statement from the White House Nat’l Energy Dominance Council & PJM Governors of 
Principles Regarding PJM, 2 (Jan. 15, 2026), https://www.energy.gov/documents/statement-
principles-regarding-pjm.  
105 RBP Filing, supra note 2, at 10.  
106 Id. at 11.  
107 Cathy Kunkel & Dennis Wamsted, Risk of AI-Driven, Overbuilt Infrastructure is Real, Inst. 
for Energy Econ. and Fin. Analysis (Jun. 3, 2025), https://ieefa.org/resources/risk-ai-driven-
overbuilt-infrastructure-real.

36 
 
competitive markets.”108 Expert estimates in 2024 stated that, nationally, utilities are planning for 
50% more demand than the tech industry is projecting.109 Similarly, in November 2025, experts 
estimated that utility forecasts were overstating data center load growth by almost 25 GW.110  
If LSEs submit inflated load forecasts for the RBP, there is a risk that PJM will over-
procure capacity for load that will never show up. Nevertheless, PJM will still allocate those 
MWs, and the cost responsibility, to those LSEs. For LSEs with data centers that fail to 
materialize, this cost responsibility could be burdensome. PJM is expected to pay up to $20 
billion for the RBP.111 LSEs can be expected to pay millions of dollars each year depending on 
their respective RBP allocations. If data centers fail to show up, LSEs will be left with 
millions—or even billions—of dollars in stranded costs. If an LSE has more data centers in its 
service area, it can allocate these costs among remaining data centers. However, if all the data 
center load in an LSE fails to materialize, ratepayers will foot the bill, or the LSE will have to 
default and spread their costs to other LSEs.  
The Maryland Office of People’s Counsel (“MD OPC”) has sounded the alarm on this 
issue, warning its state Public Service Commission (“PSC”) about the risks of failing to pass 
adequate cost allocation tariffs. In comments to the PSC on August 10, 2026, the MD OPC 
explains that customers in zones with RBP obligations will be responsible for RBP costs 
regardless of whether the large loads included in the utilities’ forecast materialize or are 
 
108 Id. 
109 Id. 
110 John Wilson et. al, Power Demand Forecasts Revised Up for Third Year Running, Led by 
Data Centers, Grid Strategies at 3 (Nov. 2025), https://gridstrategiesllc.com/wp-
content/uploads/Grid-Strategies-National-Load-Growth-Report-2025.pdf.  
111 Ethan Howland, PJM Files Backstop Auction Plan at FERC to Meet Capacity Shortfall, Util. 
Dive (Aug. 3, 2026), https://www.utilitydive.com/news/pjm-backstop-capacity-auction-ferc-
data-centers/826792/.

37 
 
delayed.112 MD OPC estimates that, if the RBP costs are assigned to residential customers in 
these zones, Maryland customers may be exposed to $562.8 million in additional costs over 15 
years.113 MD OPC warns that residential customers could pay as much as $483.2 million and 
$79.6 million in the Potomac Edison and Baltimore Gas and Electric zones, respectively, if 
Maryland does not have an established allocation framework for the RBP.114 The RBP could 
have similar effects on ratepayers across PJM if states do not step up to do their part. 
To prevent this cost-shifting, the Commission should encourage states to require take-or-
pay agreements between LSEs and large load customers for any LSEs participating in the RBP 
and require PJM to provide states with enough information to properly allocate costs through 
those agreements. These recommendations are consistent with PJM’s objective to allocate RBP 
costs to data centers, the Ratepayer Protection Pledge, and with the Commission’s June 18th 
Large Load Orders because they will ensure that large loads pay the costs of the capacity 
procured to serve them, rather than shifting those costs to other customers, or residential 
ratepayers.   
Some utilities have already begun to think about how these take-or-pay arrangements 
could be implemented. In comments to the MD PSC on August 10, 2026, the Joint Maryland 
Exelon Utilities115 urged the PSC to consider requiring an agreement to hold large loads 
accountable for capacity costs, similar to a Transmission Security Agreement (TSA), to protect 
 
112 Id.  
113 Id. 
114 Maryland Office of People’s Counsel Response to the Commission’s Request for Comments, 
at 3, Docket No. PC 72 (MD Pub. Serv. Comm’n Aug. 10, 2026), 
https://opc.maryland.gov/Portals/0/Files/Publications/Others/20260810%20-
%20OPC%20Comments%20-%20PC72.pdf?ver=-ifE-FBxdPKFNQjWfyueEw%3d%3d. 
115 The Joint Maryland Exelon Utilities include Baltimore Gas and Electric Company, Delmarva 
Power & Light Company, and Potomac Electric Power Company.

38 
 
non-large load customers from RBP capacity costs if the large load fails to materialize.116 The 
Commission should uplift these recommendations and encourage other states to develop similar 
agreements for RBP costs. 
Security agreements like the ones mentioned by the Joint Maryland Exelon Utilities are 
consistent with PJM’s objective to allocate the costs of the capacity required to serve data centers 
to those data centers and the Ratepayer Protection Pledge. PJM acknowledges that the RBP is “a 
product of cooperative federalism” and that state participation will be needed to ensure the 
success of the RBP and to protect residential customers from cost-shifts.117 PJM emphasizes that 
the states have the jurisdiction to ensure that new large loads, and not residential or small 
industrial or commercial customers, are allocated the retail costs associated with the costs of 
RBP resources procured at the wholesale level. State-mandated take-or-pay contracts between 
LSEs and large load customers align exactly with this structure that PJM outlines in its filing. 
Take-or-pay contracts will ensure that costs at the wholesale level are sub-allocated directly to 
large-load customers, regardless of whether they materialize or not, thereby protecting residential 
and small industrial customers from cost-shifts.  
Additionally, take-or-pay agreements are in line with the Ratepayer Protection Pledge 
because data centers have pledged to pay the costs of their power, whether they use it or not. The 
companies that signed the Ratepayer Protection Pledge have agreed to not only “procure the 
generation needed for their energy demand . . . and pay the full cost,” but to also “voluntarily 
negotiate new, separate rate structures with their utilities and state governments” and “pay those 
 
116 Joint Comments of the Maryland Exelon Utilities on PJM Reliability Backstop Procurement 
Proposal, at 5, Docket No. PC 72 (MD Pub. Serv. Comm’n Aug. 10, 2026), 
https://webpscxb.pscmaryland.com/DMS/pc/pc72.   
117 RBP Filing, supra note 2, at 10.

39 
 
rates for the power and infrastructure brought online for them—whether or not they actually use 
the electricity.”118 Take-or-pay agreements are consistent with this pledge because they will 
ensure that large loads will pay the cost of the capacity brought online for them whether or not 
the large load actually shows up. These agreements will ensure that data centers follow through 
on their pledge, instead of leaving residential ratepayers with the bill if data centers fail to 
materialize.  
Lastly, the take-or-pay agreements are consistent with the spirit of the Commission’s June 
18th Large Load Order, which addresses the risk of cost-shifting among transmission customers 
due to speculative requests.119 The Commission’s Order was concerned that speculative 
transmission service requests on behalf of large loads could result in cost-shifting among 
transmission customers.120 The Commission was concerned that other transmission customers 
may have to pay increased rates if an Eligible Customer takes less transmission service than 
anticipated because a large load is operating at a lower demand than anticipated or fails to 
materialize.121  
The Commission’s Order found that, to prevent these cost shifts, PJM’s tariff should 
require that PJM, the relevant transmission owner, and the Eligible Customer enter into a cost 
recovery agreement that requires the Eligible Customer to make a minimum contribution towards 
the transmission owner’s revenue requirement if the Eligible Customer takes less transmission 
service than anticipated because the large load did not materialize as planned.122 The 
 
118 White House Ratepayer Protection Pledge. 
119 Large Load Order, supra note 80, at P 68.  
120 Id. at P 79.  
121 Id.  
122 Id. at P 81.

40 
 
Commission preliminarily found that these cost-recovery agreements were necessary to ensure 
that Eligible Customers were responsible for paying the costs of large-load driven transmission, 
“rather than having those costs paid by other transmission customers that neither caused the need 
for nor benefit commensurately from” those transmission upgrades.123 
Take-or-pay contracts with respect to the RBP would work similarly to the cost-recovery 
agreements outlined in the Commission’s Order and would serve a similar purpose. Like 
speculative transmission service requests, speculative data center demand that fails to materialize 
could likely result in cost-shifts among PJM’s customers. If a data center fails to materialize as 
expected or fails to show up at all, other customers in that LSE, either other large load customers 
or non-large load ratepayers, will have to make up the costs, resulting in higher prices for those 
customers. An RBP cost-recovery agreement between LSEs and large loads would, like in the 
transmission context, protect residential customers from cost-shifts by mandating that large loads 
pay a minimum contribution towards an LSE’s RBP obligation if those large loads fail to 
materialize as expected. Like the cost-recovery agreements proposed in the Commission’s Order, 
take-or-pay agreements would ensure that the costs of capacity procured to service large loads 
would be paid by the large load that caused the need for the RBP, rather than the LSE’s other 
customers.  
To mandate these take-or-pay agreements, PJM states must have the information needed 
to allocate the RBP costs to the appropriate customers. In addition to preliminarily finding that 
PJM must develop cost-recovery agreements, the Commission’s Large Load Order also found 
that PJM must provide clear, timely, and detailed information on their website regarding 
Network Upgrades for Eligible Customers and information about the costs of those upgrades. 
 
123 Id.

41 
 
The Commission was concerned that PJM lacked adequate cost transparency measures to 
provide stakeholders with the information and visibility needed to allocate costs driven by large 
loads.124 The Commission found that the cost transparency measures it proposed in its Order will 
allow state public utility commissions and other state regulators to understand which costs are 
caused by which customers, so that they can allocate those costs to the appropriate retail 
customers.125 
 
Similarly detailed information will be necessary in the RBP context. States will need to 
have enough information about which large loads are associated with certain RBP costs to sub-
allocate those costs to large loads at the retail level. Like the Commission stated in its Large 
Load Order, PJM should be required to provide clear, timely, and detailed information about 
RBP costs to states to ensure that states have enough information to mandate take-or-pay 
agreements between LSEs and large loads that adequately ensure that large loads pay for the 
costs of RBP capacity procured on their behalf, whether or not they materialize as expected.  
Conclusion 
PJM’s RBP filing generally presents a just and reasonable mechanism to procure capacity 
for large loads that are currently causing a shortfall in PJM’s capacity market and to facilitate the 
allocation of costs to large loads while respecting state jurisdiction over retail rates. However, 
PJM’s failure to include any requirement as to the location of RBP supply resources will increase 
the RBP’s reliance on large, costly network upgrades that threaten to delay when supply can 
become deliverable to the large loads that need it. The modification described above to require 
RBP supply to either be located near to demand, or to be fully responsible for the cost of network 
 
124 Id. at P 74.  
125 Id. at P 70.

42 
 
upgrades, will help the RBP better achieve its objectives of bringing needed new supply online 
promptly and to allocate costs to large loads rather than shifting costs to others. Accordingly, 
PIOs respectfully request that the Commission approve the RBP filing with the modification 
described above. 
 
DATED: August 21, 2026 
Respectfully submitted,  
SIERRA CLUB  
/s/ Aaliyah Adkins  
Aaliyah Adkins  
Earthjustice  
1400 L St NW   
Lobby 2, Unit 34117   
Washington DC 20005  
(202) 797-5253  
aadkins@earthjustice.org  
 
/s/ Nick Lawton  
Nick Lawton  
Earthjustice  
1400 L St NW   
Lobby 2, Unit 34117   
Washington DC 20005  
(202) 780-4835  
nlawton@earthjustice.org  
 
  
/s/ Justin Vickers  
Justin Vickers  
Senior Attorney  
Sierra Club  
2101 Webster St., 13th Floor   
Oakland, CA 94612  
(224) 420-0614  
justin.vickers@sierraclub.org  
Counsel for Sierra Club 
NATURAL RESOURCES DEFENSE 
COUNCIL 
/s/ Claire Lang-Ree 
Claire Lang-Ree 
Advocate, Sustainable FERC Project 
NRDC 
40 W 20th St 
New York, NY, 11238 
clangree@nrdc.org

43 
 
CERTIFICATE OF SERVICE 
I hereby certify that the foregoing has been served in accordance with 18 C.F.R. § 
385.2010 upon each party designated in the official service list compiled by the Secretary in this 
proceeding, by email.   
  
/s/ Aaliyah Adkins  
Aaliyah Adkins  
Earthjustice  
1400 L St NW   
Lobby 2, Unit 34117   
Washington DC 20005  
(202) 797-5253  
aadkins@earthjustice.org