{"document":{"slug":"filing-20260821-5217","title":"Protest of the Pennsylvania Office of Consumer Advocate to PJM Interconnection, L.L.C.’s Reliability Backstop Procurement proposal","issued":"2026-08-21","accession":"20260821-5217","docket":"ER26-3380-000","group":"PJM filings","filer":"Pennsylvania Office of Consumer Advocate","kind":"filing","file":"sources/originals/20260821-5217_01.pdf","url":"https://elibrary.ferc.gov/eLibrary/filelist?accession_Number=20260821-5217","sha256":"a8e680b578c6427d73d9da46b0dbdfd7f882d89b09f696aa689737ededceaa04","pages":31,"tokens":9866,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":43,"text":"UNITED STATES OF AMERICA \nBEFORE THE \nFEDERAL ENERGY REGULATORY COMMISSION \n \n \n \nPJM Interconnection, L.L.C. \n \n) \n) \n) \n) \n) \n \n \nDocket No. ER26-3380-000 \n \nPROTEST OF  \nTHE PENNSYLVANIA OFFICE OF CONSUMER ADVOCATE \n \nRE: RELIABILITY BACKSTOP PROCUREMENT TO ADDRESS RESOURCE \nADEQUACY CONCERNS STEMMING FROM NEW LOAD ADJUSTMENTS \n \n \n \n \nAugust 21, 2026"},{"page":2,"startToken":43,"endToken":363,"text":"i \n \nTable of Contents \n \nI. \nIntroduction ........................................................................................................................... 1 \nII. \nExecutive Summary .......................................................................................................... 1 \nIII. \nSummary of Cost Allocation Portion of PJM’s Tariff Filing ........................................ 4 \nIV. \nFERC’s Exclusive Jurisdiction to Determine PLC and NSPL Value \nMethodologies ................................................................................................................................ 8 \nA. \nNSPL Determinations for Transmission Costs Allocations to LSEs ................................ 10 \nB. \nPLC Determinations for Capacity Cost Allocations to LSEs ............................................11 \nV. \nArgument ............................................................................................................................. 14 \nA. \nPJM’s proposal to have states determine the RBO methods for addressing cost \nallocation of RBP costs is unjust and unreasonable because it presents a jurisdictional \nproblem that FERC must address. ............................................................................................ 14 \nB. \nThere is time to get cost allocation right – by the time cost allocation comes due for \nthe first Delivery Year in which RBP Resources are expected to be in service (i.e., \n2028/2029). ............................................................................................................................... 17 \nC. \nPotential Relief Options .................................................................................................... 17 \n1. \nOption 1: Recognize and exercise exclusive jurisdiction over RBO value \nmethodologies; FERC can declare its exclusive jurisdiction over determining the RBO \nmethods and require jurisdictional transmission owners to make additional tariff filings \nthat propose RBO methods for their transmission zones within PJM. ................................. 17 \n2. \nOption 2: Relinquish exclusive jurisdiction over PLC methodologies; FERC can \ndeclare that states have exclusive jurisdiction to determine PLC and NSPL methods, \nand by extension the proposed RBO method, and require Electric Distributors that are \nsignatories to the RAA to report them to PJM. ..................................................................... 19 \n3. \nOption 3: Establish a new jurisdictional category for PLC methodologies for \nRBOs; FERC can legally distinguish PJM’s proposal for state utility commissions to \ndetermine the RBO method from the PLC and NSPL methods and declare that state \nutility commissions have exclusive jurisdiction to determine and approve the methods \nfor determining RBO values for purposes of PJM cost allocation of RBP obligations to \nLSEs. ..................................................................................................................................... 22 \nD. \nFERC should adopt Option 1 by affirming its exclusive jurisdiction over RBO \nmethods and requiring each transmission owner to file Attachment M-2 amendments \ncontaining their proposed RBO method. .................................................................................. 22 \nVI. \nConclusion ....................................................................................................................... 25 \n \nAppendix A"},{"page":3,"startToken":363,"endToken":599,"text":"1 \n \nUNITED STATES OF AMERICA \nBEFORE THE \nFEDERAL ENERGY REGULATORY COMMISSION \n \n \n \nPJM Interconnection, L.L.C. \n \n) \n) \n) \n) \n) \n \n \nDocket No. ER26-3380-000 \n \nI. \nIntroduction \nBefore the Federal Energy Regulatory Commission (FERC or Commission), the \nPennsylvania Office of Consumer Advocate (PA OCA) files this Protest in response to the PJM \nInterconnection L.L.C.’s (PJM’s) July 31, 2026, Federal Power Act (FPA) Section 205 filing \ncontaining revisions to the PJM Open Access Transmission Tariff (Tariff) and the Reliability \nAssurance Agreement Among Load Serving Entities (RAA) to establish the Reliability Backstop \nProcurement (RBP)1—a one-time procurement of new capacity to address resource adequacy \nchallenges in the PJM Region arising from insufficient commitments of capacity in the 2027/2028 \nand 2028/2029 Reliability Pricing Model (RPM) Auctions, primarily driven by the unprecedented \naddition of large loads, most notably data centers. \nThe PA OCA represents the interests of Pennsylvania utility consumers or ratepayers before \nFERC.2 “Ratepayers” refers to the millions of retail end users that are served by the PJM grid. \nII. \nExecutive Summary \nUnder FERC precedent, FERC possesses—and states lack—jurisdiction to determine or \napprove the methods that are used to develop peak load contribution (PLC) and network service \n \n1 Reliability Backstop Procurement to Address Resource Adequacy and Large Loads, PJM Interconnection, L.L.C., \nDocket \nNo. \nER26-3380 \n(July \n31, \n2026) \n(PJM \nRBP \nFiling), \nhttps://elibrary.ferc.gov/eLibrary/filelist?accession_number=20260731-5214. \n2 71 P.S. § 309-4."},{"page":4,"startToken":599,"endToken":907,"text":"2 \n \npeak load (NSPL) values, which PJM uses for allocating capacity and transmission costs, \nrespectively, to load serving entities (LSEs) within the PJM Region. Despite FERC’s longstanding \nexercise of authority over PLC and NSPL value determinations, PJM proposes in its RBP filing to \naddress cost allocation of RBP obligations through “state and/or [state utility commission]-\ndetermined allocation of RBP UCAP MW to LSEs within each zone/area.” PJM defines the \nallocation of MW made through this method as a new term, an LSE’s “RBP Obligation” or “RBO.” \nPJM’s proposal is unjust and unreasonable because for states to determine the RBO values, they \nwould have to determine and approve methods for RBO PLCs—and the states lack jurisdiction to \ndo so. FERC must address this jurisdictional problem by rejecting PJM’s proposal for the \nallocation of RBO MWs and costs. And FERC must mandate an alternative that either maintains, \nor expressly—with a reasoned explanation—re-delineates the current jurisdictional boundary \nconcerning PLC determination and approval. FERC can establish legally durable jurisdictional \nclarity, as follows:  \nRecognize and exercise exclusive jurisdiction over RBO value methodologies. FERC \ncould (a) declare FERC’s exclusive jurisdiction to evaluate and approve RBO value \nmethodologies, (b) determine PJM’s cost allocation proposal for RBP obligations is unjust and \nunreasonable because it unlawfully delegates the establishment of RBO methodologies to states, \n(c) require jurisdictional transmission owners within PJM to submit additional filings based on this \ndocket to further define the methods they will use to determine individual customers’ RBO values \nwithin each transmission owner zone, (d) mandate that all PJM transmission owners–including \nthose that have not yet filed Attachment M-2s to the PJM OATT—make Section 205 tariff filings \nfor the RBO value methodologies in Attachment M-2s, and (e) set a time frame to resolve protests \nand comments to the transmission owners’ tariff filings regarding the RBO methodologies;"},{"page":5,"startToken":907,"endToken":1192,"text":"3 \n \nRelinquish exclusive jurisdiction over PLC methodologies. FERC could (a) reverse its \nprior decisions that appear to establish FERC’s exclusive jurisdiction over determining PLC \nmethods and jurisdictionally analogous NSPL methods, (b) declare that states or state utility \ncommissions have exclusive jurisdiction to determine and approve the PLC and analogous NSPL \nmethods, and by extension the RBO method, and (c) mandate Electric Distributors that are \nsignatories to the RAA to report the state or state utility commission-approved PLC/NSPL/RBO \nmethodologies to PJM as necessary inputs into PJM’s cost allocation methods used for wholesale \ncapacity costs and transmission costs; or  \nEstablish a new jurisdictional category for PLC methodologies for RBOs. FERC could \n(a) legally distinguish PJM’s proposal for state utility commissions to determine the RBO method \nfrom FERC’s jurisdiction over the PLC and analogous NSPL methods, and (b) declare that state \nutility commissions have exclusive jurisdiction to determine and approve the methods for \ndetermining RBO values for purposes of PJM cost allocation of RBP obligations to LSEs.  \nFor the reasons explained below, FERC should grant the first relief option by finding \nthat PJM’s RBO cost allocation proposal is unjust and unreasonable, exercising jurisdiction \nover how RBO costs are allocated to LSEs, and directing all transmission owners to make \nmandatory Attachment M-2 filings that define their RBO allocation methodologies. \nRegarding jurisdiction, the RBO method is indistinguishable from the PLC and analogous NSPL \nmethods that are currently under FERC jurisdiction. Importantly, if FERC decides that the RBO \nvalue methodology used by PJM for RBP cost allocation is somehow distinguishable from the \nPLC/NSPL value methodologies used for capacity/transmission cost allocation, FERC would have \nto expressly declare that states have jurisdiction over the RBO methods. Further, FERC would"},{"page":6,"startToken":1192,"endToken":1559,"text":"4 \n \nhave to offer a reasoned explanation for departing from its prior interpretations of the FPA in \nanalogous contexts.  \nIf FERC does not expressly identify a clear jurisdictional path forward, state utility \ncommissions could find that they lack authority to determine the RBO methods. This would result \nin regulatory confusion or worse—yearslong litigation over the RBO method. Without expressly \ndefined jurisdictional roles, the result will be to default to PJM’s backup plan, which is to allocate \nRBP costs to all LSEs PJM-wide on a pro rata basis using existing PLC methods. However, pro \nrata RBP cost allocation to LSEs using PLC values is unjust and unreasonable because it will likely \nresult in non-large load customers being allocated RBP costs, despite these ratepayers not having \ncaused the costs. \nIII. \nSummary of Cost Allocation Portion of PJM’s Tariff Filing \nIn its filing, PJM proposes that the states or state utility commissions (PJM refers to state \nutility commissions as the “Relevant Electric Retail Regulatory Authority” or “RERRA”)3   \ndetermine allocation of cleared RBP unforced capacity (UCAP) megawatts (MW) to LSEs, \nthrough the RBO methods, within each Electric Distributor’s zone/area, as reported by each \nElectric Distributor to PJM. If the Electric Distributors do not report the RERRA-approved RBO \nmethods to PJM, PJM proposes to allocate RBP costs to LSEs using existing FERC-approved PLC \nvalues within the relevant transmission zone. \nMore specifically, PJM proposes the following as to cost allocation: \nPJM is proposing that cost allocation to LSEs within an Electric \nDistributor’s zone/area be based on “the state and/or RERRA-determined \nallocation of cleared RBP UCAP MW to LSEs within each Electric Distributor’s \nzone/area, as reported by each Electric Distributor to [PJM].” PJM has thus created \n \n3 PJM RBP Tariff Filing at 174 (defining “Relevant Electric Retail Regulatory Authority” or “RERRA” according to \nits definition in PJM’s Operating Agreement); PJM, Intra-PJM Tariffs, OA § 1 (defining “Relevant Electric Retail \nRegulatory Authority” as “an entity that has jurisdiction over and establishes prices and policies for competition for \nproviders of retail electric service to end-customers, such as the city council for a municipal utility, the governing \nboard of a cooperative utility, the state public utility commission or any other such entity.”)."},{"page":7,"startToken":1559,"endToken":2108,"text":"5 \n \na new defined term, the “RBP Obligation” or “RBO”, to refer to this state and/or \nRERRA-determined allocation of RBP UCAP MW to LSEs within each zone/area. \nThe RBO is flexible. For example, it permits states and/or RERRAs to rely on their \nown, disparate definitions of data centers and large loads, and to determine which \nretail customers should be allocated RBP Charges, generally. PJM’s authority over \nwholesale markets does not extend to dictating the allocation of costs to retail load, \ndata centers and other large loads and, for purposes of cost allocation to such data \ncenters and other large loads, each state and/or RERRA may have its own \nmethodology, developed in accordance with its unique needs and considerations.  \nPJM’s proposal requires that Electric Distributors report, to PJM, the state \nand/or RERRA-determined allocations of RBP UCAP MW to LSEs in their \nzone(s)/area(s). To the extent that Electric Distributors report RBOs, the RBP \nCharge assessed daily to an LSE in the relevant zone/area will equal the LSE’s daily \nreported RBO MW in the zone/area divided by the total daily RBO MW in the \nzone/area, and multiplied by the total, daily RBP Charges allocated to the zone/area. \nIn the unexpected event that RBOs are ultimately not reported to PJM, PJM \nwill still need to proceed with settlement of the RBP Charges. In this case, PJM will \nrely on a back-up cost allocation methodology to determine allocation to LSEs. \nPJM’s back-up methodology applies PJM’s status quo method for allocating \ncapacity costs pursuant to RAA, Schedule 8, which incorporates Load Adjustments \nfor purposes of allocating capacity costs to LSEs. In other words, if no allocation \nis reported by the relevant Electric Distributors with allocated RBP UCAP MW, \nPJM will allocate RBP Charges based on the Peak Load Contribution submitted to \nPJM for the LSEs in the relevant zone/area. \nImportantly, PJM is not proposing a backup methodology for how RBP \nCharges should be allocated to non-jurisdictional, retail customers served by each \nof the LSEs in any Electric Distributor’s zone/area. Even if Electric Distributors do \nnot report any state and/or RERRA-determined RBOs in their zone(s)/area(s), and \neven if PJM subsequently applies the status quo allocation methodology to PJM’s \nLSE customers, PJM would not, under the proposed methodology, determine any \nfurther allocation to retail customers served by those LSEs.  \nPJM and the PJM states and/or RERRAs must cooperate to ultimately \nallocate wholesale costs to end use, retail customers. In the Commission’s 2007 \norder on rehearing affirming its finding that PJM’s RPM market design was just \nand reasonable, the Commission noted that the “question of jurisdiction over \nresource adequacy is a complex matter that stands at ‘the confluence of state-federal \njurisdiction.’” The proposed RBP methodology recognizes and respects this \ndivision of responsibility. While it is within PJM’s purview to allocate the costs of \nRBP Resources to LSEs, who are customers of PJM, the Commission has also \nrecognized that it is beyond the scope of PJM’s authority to “address how LSEs \n[will subsequently] bill retail customers for such charges” as doing so would affect \nthe “ability [of the PJM states and/or RERRAs] to allocate such charges.” Thus, \nPJM’s proposed methodology for allocating RBP Charges sets the table for states"},{"page":8,"startToken":2108,"endToken":2523,"text":"6 \n \nand/or RERRAs, by empowering them to make decisions about how to best further \nallocate RBP Charges to data centers and other retail customers.4 \nPJM explains why it believes its cost allocation proposal is just and reasonable.5 It \ncontinues by stating that its proposal recognizes that allocation to retail customers, including data \ncenters, is within the state utility commission’s purview.6 Specifically, PJM states: \nThe proposed cost allocation methodology assigns RBP costs in a manner \nthat respects the balance of authority between states, the Commission, and PJM. \nEven in its infancy, the RPM required that the Commission “recognize the \ntraditional role of state and local entities in regulating resource adequacy” while \nalso remaining “aware of [its] responsibilities under the FPA to ensure that \nadequate service is provided, and that wholesale rates are just and reasonable.” \nThus, the Commission found that the appropriate course of action was to “defer to \nstate and local entities’ decisions when possible on resource adequacy matters, but \nin doing so . . . not shirk our congressionally-mandated responsibilities.”  \nFirst, the proposed cost allocation methodology empowers states and/or \nRERRAs to submit RBP RBOs, which PJM would then apply to the allocation of \nRBP Charges to LSEs. However, under the proposed allocation framework, PJM \nwould retain a back-up methodology for allocated RBP Charges to LSEs, which \nwould apply if no RBOs are reported for a particular zone/area. PJM’s proposed \nTariff language expressly provides states and/or RERRAs with the opportunity, \nwithin PJM’s proposed cost allocation framework, to submit state-determined \nRBOs. This back up cost allocation methodology is needed, because if no RBOs \nare reported for a particular zone/area, PJM would still need to allocate the RBP \ncosts in a manner that is just and reasonable.  \nPJM’s approach finds support in the Commission’s 2025 order accepting \nMidcontinent Independent System Operator, Inc.’s (“MISO”) Revised Expedited \nResource Addition Study (“ERAS”) Proposal. In that matter, Commission found \nthat RERRA participation in the ERAS process was permissible and not an \nimproper delegation of federal authority to the states, as the participation of \nRERRA: \nwould be wholly pursuant to a Commission-jurisdictional process . \n. . proposed by MISO and approved by the Commission—not by \nstate authorities—and under which a [Generator Interconnection \nProcedure] is on file with the Commission and any future revisions \nwould be subject to Commission approval. Further, the ERAS \nprocess would remain subject to the Commission’s authority \n \n4 PJM RBP Transmittal Letter at 97-100 (citations omitted). \n5 Id. at 100-04. \n6 Id. at 104-08."},{"page":9,"startToken":2523,"endToken":3024,"text":"7 \n \npursuant to FPA sections 205 and 206. In contrast, in Talen, the \nMaryland Commission established a state program that operated \noutside a Commission-jurisdictional process and “interfered” with \nthe Commission’s authority to establish interstate wholesale rates. \nSimilarly, if accepted, PJM’s proposed cost allocation methodology would \nbe set forth expressly in its Tariff, approved by and on file with the Commission. \nThe Tariff would expressly permit states and/or RERRAs to participate in the cost \nallocation of RBP costs to LSEs by reporting RBOs, which would supplant PJM’s \nbackup allocation methodology of RBP Charges to LSEs. Like MISO’s Revised \nERAS Proposal, the proposed cost allocation methodology would nevertheless \nremain subject to the Commission’s authority pursuant to FPA sections 205 and \n206.  \nSecond, PJM’s proposed cost allocation methodology hews closely to the \nCommission’s most recent articulation of where the boundary between \nstate/RERRA and federal jurisdiction exists with respect to large loads. Namely, \nwhile noting concerns “about the impact that large load additions can have on retail \nratepayers, particularly the concern that other retail ratepayers may be forced to \nsubsidize Network Upgrades needed to add large loads to the transmission \nsystem[,]” the Commission found that, in this realm, the scope of its regulatory \nauthority is limited. “Specifically,” it is the PJM states that “have authority over \nhow the wholesale costs of providing electricity, including transmission of such \nelectricity, to those retail customers are recovered through retail rates.”  \nPJM’s cost allocation framework recognizes the need to protect retail \nratepayers from subsidizing new capacity procured to serve large loads while also \nrecognizing PJM’s own jurisdictional limitations. As the Commission has found, it \nis the PJM states and/or RERRAs that have authority over how wholesale costs of \nthese new capacity resources are recovered from retail customers through retail \nrates. In fact, PJM does not have a line of sight into the retail load and end-use \ncustomers served by each relevant LSE. PJM also recognizes that states may each \ndefine “large loads” and “data centers” differently. Thus, cost allocation \nmethodology that provides PJM states and/or RERRAs with the ability to determine \nthe specific RBOs that should be assigned to LSEs, as well as to cost allocate to \nend-use customers in their respective states in accordance with their laws and \npolicies, supports the NEDC/PJM Governors’ Principles, which include the \nprinciple that the cost of new capacity should be allocated to data centers who have \ncaused the need for additional capacity in the PJM Region.  \nThird, PJM’s proposed framework is pragmatic. In the short time remaining \nbefore the September 30, 2026 RBP, it would simply be infeasible for PJM to obtain \ndetailed information about the large loads and the various LSEs serving such large \nloads from every state and RERRA in the PJM Region. States and RERRAs are \nsimply in a better position to identify and cost allocate RBP Charges to large loads, \nincluding data centers, and the LSEs that serve them. States and RERRAs have \ngranular information about large loads within their borders. Accordingly, PJM’s"},{"page":10,"startToken":3024,"endToken":3385,"text":"8 \n \nproposed cost allocation methodology deliberately leaves states and RERRAs with \nthe flexibility to protect their own customers by allocating the costs of the \nprocurement accordingly. Furthermore, PJM’s proposal recognizes that state laws \non the allocation of capacity costs to large loads, including data centers, are \nevolving. The proposal recognizes and relies on the pledges of the 13 governors of \nthe PJM states to “[u]se all available authorities to ensure that their state public \nutility commissions design rate class structures to ensure that their states’ LSEs \nallocate their share of the cost to procure new capacity through the . . . [a]uctions \nto new data center loads that have not otherwise procured capacity or agreed to be \ncurtailable.” However, to the extent that states and/or RERRAs do not provide such \ninformation, PJM will rely on Commission-approved cost allocation methodologies \nin place today to properly allocate costs to Electric Distributor zones/areas and \nLSEs.  \nThe proposed methodology addresses the consumer protection goals that \nhave been raised by the National Energy Dominance Council, PJM’s 13 state \ngovernors, and other state and federal entities, while heeding the Commission’s \nrecent articulation of the boundary between state and federal jurisdiction.7 \nIV. \nFERC’s Exclusive Jurisdiction to Determine PLC and NSPL Value Methodologies  \nIn its filing, PJM does not recognize current FERC authority over PLC and NSPL value \nmethodologies. As is established in more detail below in this section, FERC currently asserts \njurisdiction over approving PLC and jurisdictionally analogous NSPL value methodologies, which \nare set by transmission owners through voluntary OATT Attachment M-2 filings, made pursuant \nto FPA Section 205. As a result, the PJM transmission owners, not Electric Distributors, establish \nmethods for determining PLC and NSPL values within their transmission zones, not Electric \nDistributor zones. FERC currently permits the transmission owners to voluntarily file tariff \nattachments to PJM’s OATT, Attachment M-2s, which establish and specify these methods for \ndetermining PLC and NSPL values for individual retail customers for purposes of wholesale cost \nallocation to LSEs.  \nFERC, PJM, and public utilities have placed PLC (capacity) and NSPL (transmission) \nmethodologies into the same category. For example, when a utility files an Attachment M-2 with \n \n7 Id. (citations omitted)."},{"page":11,"startToken":3385,"endToken":3698,"text":"9 \n \nFERC to amend the PJM OATT, that Attachment M-2 includes both PLC and NSPL.8  Further, \nFERC describes PLC and NSPL methodologies together, as if they were conjoined twins, as \nfollows: \nFirstEnergy’s Attachment M-2 governs the determination of Peak Load \nContribution and Network Service Peak Load for each LSE in its respective \ntransmission pricing zone for the PJM planning year. Under this attachment, certain \nFirstEnergy regulated affiliates provide PJM with the information necessary to \ndetermine the Peak Load Contribution and Network Service Peak Load each \nplanning year for each wholesale LSE operating in the affiliates’ respective zones. \nTo calculate the Peak Load Contributions, PJM first uses customer load data to \ncalculate the five highest daily peaks for the summer period and then allocates an \nappropriate share to each EDC zone. Each EDC in PJM must then allocate a share \nof its PJM-assigned peak load to each customer on its system and aggregate these \npeak loads to the LSE level. PJM in turn uses the reported Peak Load Contributions \nto determine an LSE's capacity obligation. To calculate Network Service Peak \nLoads in the FirstEnergy zone, PJM first determines the FirstEnergy zone's highest \ntransmission peak value. An LSE's Network Service Peak Load is equal to its total \nhourly load during the FirstEnergy zone’s highest peak value.9 \n \n \nPLC and NSPL methodologies thus involve an analogous and indistinguishable \ninterpretation of cooperative federalism under the FPA. Appendix A offers a graphical \ninterpretation of this cooperative federalism arrangement.10 Accordingly, FERC’s NSPL precedent \nand related public utility commission interpretations of FERC’s precedent directly bear on PLCs \nand, by natural extension, PJM’s proposed RBP methodology for capacity. Because NSPL, PLC, \nand RBP methodologies appear to be indistinguishable for jurisdictional purposes, this Protest \nanalyzes all three. \n \n8 See, e.g., PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 3 (2012). \n9 Id. \n10 Infra App’x A."},{"page":12,"startToken":3698,"endToken":4098,"text":"10 \n \nA. \nNSPL Determinations for Transmission Costs Allocations to LSEs \nIn AMTRAK v. PPL Elec. Utils. Corp.,11 FERC found that it has jurisdiction over \ndetermining NSPL methods and, ultimately, the NSPL values assigned to individual retail \ncustomers for purposes of PJM allocating transmission costs to LSEs, as follows: \nAs an initial matter, we find that the Commission has jurisdiction over the matters \nraised in the complaint.  Amtrak challenges the NITS charges assessed by PJM and \npassed through to Amtrak by its retail supplier without mark-up, as well as the \nrelated PPL methodology for determining Network Service Peak Load \nContributions, both of which fall within the Commission’s jurisdiction.12 \n \nFERC explained that transmission owners’ tariff filings containing the PLC and NSPL \nmethodologies are voluntary: \nWhile many transmission owners have filed their methodologies for determining \nboth capacity and [NSPL] contributions in Attachment M-2 to the PJM Tariff, the \nCommission has recognized that such a filing is voluntary and not required by \nPJM.13 \n \nThe Pennsylvania Public Utility Commission (PA PUC) relied heavily on FERC’s decision \nin 2020 Amtrak to find that it lacked jurisdiction to determine or approve NSPL methods submitted \nby a transmission utility and EDC to PJM.14 Based on 2020 Amtrak, the PA PUC concluded that it \ndoes not have jurisdiction over the NSPL input into the Network Integration Transmission Service \n(NITS) charge or the method used to calculate the NSPL.15 In that litigation before the PA PUC, \nindustrial consumers challenged the utility’s methodology in the creation of NITS tags and NSPL \ncontribution, stating that it deviated from PJM’s allocation approach to determining coincident \n \n11 171 FERC ¶ 61,237 (June 18, 2020) (2020 Amtrak), order on reh’g, 173 FERC ¶ 61,043 (Oct. 15, 2020). \n12 2020 Amtrak Order at P 34 (emphasis added) (citing PJM, Intra-PJM Tariffs, OATT, 34.1 Monthly Demand Charge \n(1.0.0), § 34.1(a); N.Y. v. FERC, 535 U.S. 1, 20 (2002); Commonwealth Edison Company and Commonwealth Edison \nCompany of Indiana, Inc., 133 FERC ¶ 61,118, at P 11 (2010 ComEd Order)).  \n13 Id. at P 45. \n14 Petition of PPL Electric Utilities Corporation for Approval of Its Default Service Plan for the Period June 1, 2021 \nThrough May 31, 2025, No. P-2020-3019356, 2020 PA. PUC LEXIS 646, *69-74 (Pa. Pub. Util. Comm’n 2020) (PPL \nDSP V Order), https://www.puc.pa.gov/pcdocs/1687575.docx. \n15 Id. at *74."},{"page":13,"startToken":4098,"endToken":4414,"text":"11 \n \npeak, it does not appear to be based on actual customer usage during peak events, and it is \ninconsistent with cost causation principles.16 The industrial customers further argued that the PA \nPUC has jurisdiction to regulate the methods through which Pennsylvania EDCs allocate \ntransmission costs to individual customers, contending that because the NSPLs established by the \nEDC follow the customer, regardless of whether the customer takes default service supply from \nthe EDC or competitive supply from a competitive supplier regulated by the PA PUC, the PA PUC \nshould exercise jurisdiction over the NSPL calculation.17  \nIn that proceeding, the PA PUC concluded:  \nWe agree with the observation of [the EDC] that [the industrial customers] conflate \nthe payment of NITS charges by an LSE, which are calculated using an NSPL[,] \nwith the allocation of transmission charges to retail electric service customers, the \nlatter occurring through either (a) [the EDC’s] [retail charge] for default service \ncustomers, or (b) the private electric supply service contract between [competitive \nsupplier] and a shopping customer.18   \nGiven FERC’s decision in 2020 Amtrak, and further given the PA PUC’s finding of its lack \nof state jurisdiction to regulate a PA PUC-licensed competitive supplier’s contract price with a \nretail customer, the PA PUC concluded that it only has jurisdiction over the retail allocation method \nused by the LSE/default supplier to charge retail capacity rates to default service customers.19 The \nPA PUC interpreted FERC’s “jurisdiction over NITS charges and the methodology used to \ncalculate NSPLs” to be “exclusive.”20 \nB. \nPLC Determinations for Capacity Cost Allocations to LSEs \nNot only has FERC exercised jurisdiction over transmission NSPL, but also over capacity \nPLC methods that include granular retail inputs. FERC has done so by approving Attachment M-\n \n16 Id. at *69-70. \n17 Id. at *71-73. \n18 Id. at *74. \n19 PPL DSP V Order, 2020 PA. PUC LEXIS 646, *74.. \n20 Id."},{"page":14,"startToken":4414,"endToken":4839,"text":"12 \n \n2 filings from Pennsylvania transmission owners.21 Attachment M-2 filings amend the PJM Tariff, \nand FERC approves or rejects them accordingly.22  \nIn so doing, FERC views PJM’s settlement of RPM costs with LSEs as a sale of capacity \n(a wholesale product) from wholesale entities (such as generators) to PJM LSEs (also wholesale \nentities) under wholesale rates subject exclusively to the jurisdiction of FERC. As a result, FERC \nalso asserts jurisdiction over the methods by which EDCs assign capacity obligations, and thus \ncosts, to PJM LSEs, even if that method entails a “bottom-up” determination of the allocation of \ncapacity \nobligations \nto \nLSEs/state-licensed \ncompetitive \nsuppliers. These \nbottom-up \ndeterminations can entail assigning capacity obligations to individual retail accounts first (PLC \nvalues), then PJM determining the obligation of an LSE as the sum of the capacity obligations of \nthe retails accounts which it serves. \nFERC described FirstEnergy’s Attachment M-2 as follows: \nFirstEnergy’s Attachment M-2 governs the determination of Peak Load \nContribution and Network Service Peak Load for each LSE in its respective \ntransmission pricing zone for the PJM planning year. Under this attachment, certain \nFirstEnergy regulated affiliates provide PJM with the information necessary to \ndetermine the Peak Load Contribution and Network Service Peak Load each \nplanning year for each wholesale LSE operating in the affiliates’ respective zones.  \nTo calculate the Peak Load Contributions, PJM first uses customer load data to \ncalculate the five highest daily peaks for the summer period and then allocates an \nappropriate share to each EDC zone. Each EDC in PJM must then allocate a share \nof its PJM-assigned peak load to each customer on its system and aggregate these \n \n21 See 2020 Amtrak, 171 FERC ¶ 61,237, at P 34 (2020) (noting that “many transmission owners have filed their \nmethodologies for determining both capacity and [NSPL] contributions in Attachment M-2 to the PJM Tariff,” and \nthat “the Commission has recognized that such a filing is voluntary and not required by PJM”). \n22 See, e.g., PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 1 (2012) (setting Attachment M-2 dispute for \nFPA hearing and settlement judge procedures). See also FirstEnergy Letter Order, PJM Interconnection, L.L.C., \nDocket Nos. ER24-284 & ER24-285 (Dec. 13, 2023), \nhttps://elibrary.ferc.gov/eLibrary/filelist?accession_number=20231218-3074; PECO Letter Order, PJM \nInterconnection, L.L.C., Docket No. ER14-2340 (Aug. 7, 2014), \nhttps://elibrary.ferc.gov/eLibrary/filelist?accession_number=20140807-3018; PPL Letter Order, PJM \nInterconnection, L.L.C., Docket Nos. ER22-991-000 & ER22-991-001 (May 11, 2022), \nhttps://elibrary.ferc.gov/eLibrary/filelist?accession_number=20220511-3061."},{"page":15,"startToken":4839,"endToken":5174,"text":"13 \n \npeak loads to the LSE level. PJM in turn uses the reported Peak Load Contributions \nto determine an LSE's capacity obligation.23 \n \n \nWhen parties disputed FirstEnergy’s proposed revisions to its Attachment M-2, FERC \nresponded by establishing evidentiary hearing and settlement procedures.24 In the relevant \nsettlement procedures, FERC identified that “[t]he primary issue underlying the Partial Settlement \n[was] whether Attachments M-1 and M-2 are just and reasonable, and not unduly \ndiscriminatory.”25 FERC’s Settlement Judge reviewed them under the FPA’s legal standard, \nbecause they are a filed rate within PJM’s governing documents.26  \n \nAccordingly, FERC currently regulates the process by which “certain FirstEnergy \nregulated affiliates provide PJM with the information necessary to determine the Peak Load \nContribution” that involves “[e]ach EDC in PJM . . .  then allocat[ing] an appropriate share of its \nPJM-assigned peak load to each customer on its system and aggregat[ing] these peak loads to the \nLSE level.”27 \nBased on the above, FERC currently asserts jurisdiction over approving PLC and NSPL \nvalue methodologies. \n \n23 PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 3 (2012) (emphasis added). \n24 Id. at P 1. \n25 PJM Interconnection, L.L.C., 144 FERC ¶ 63,011, at P 24 (2013). \n26 See 16 U.S.C. § 824d(d) (“[N]o change shall be made by any public utility in any such rate, charge, classification, \nor service, or in any rule, regulation, or contract relating thereto, except after sixty days’ notice to the Commission and \nto the public.”); see also Okla. Gas and Elec. Co. v. FERC, 11 F.4th 821, 829 (D.C. Cir. 2021) (identifying filed rate \ndoctrine extends to matters directly affecting rates); PJM Power Providers Group v. FERC, 96 F.4th 390, 394 (3d. Cir. \n2024) (summarizing filed rate doctrine and applying it to PJM’s Tariff); Duquesne Light Co., 189 FERC ¶ 61,181, at \nn.109 (2024) (citing 16 U.S.C. § 824d(d))). \n27 PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 3 (2012)."},{"page":16,"startToken":5174,"endToken":5710,"text":"14 \n \nV. \nArgument \nA. \nPJM’s proposal to have states determine the RBO methods for addressing cost \nallocation of RBP costs is unjust and unreasonable because it presents a jurisdictional \nproblem that FERC must address. \nFERC cannot delegate its FPA authority to the states.28 Likewise, the states cannot take the \npower that belongs to FERC under the FPA.29 PJM’s act of allocating wholesale costs to wholesale \ncustomers (LSEs)—including capacity and transmission costs—is FERC-jurisdictional under the \nFPA.30 As established above, FERC has even asserted its jurisdiction over the PLC and NSPL \ninputs that are a part of PJM’s allocation of capacity costs and transmission costs to LSEs.31 \nSpecifically, FERC has asserted its jurisdiction to approve the methods for determining PLC and \nNSPL values that are assigned to individual retail customers for purposes of PJM allocating \ncapacity and transmission costs to LSEs serving those retail customers.32  \nTo be clear, the PLC and NSPL values—which are determined by the PLC/NSPL \nmethodologies adopted by the PJM transmission owners and typically filed in Attachment M-2s to \nthe PJM OATT—are assigned to individual retail customers to create capacity and transmission \nobligations, respectively, which PJM then sums to determine an aggregate amount for purposes of \n \n28 Cf. Mistretta v. United States, 488 U.S. 361, 372-73 (1989) (quoting American Power & Light Co. v. SEC, 329 U.S. \n90, 105 (1946)) (noting that the “Court has deemed [congressional delegations of statutory authority to be] \n‘constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and \nthe boundaries of this delegated authority.’” (emphasis added)). Here, the boundary of Congress’s delegation includes \nthe FPA’s bright line between federal and state jurisdiction. Miss. Power & Light Co. v. Mississippi ex rel. Moore, 487 \nU.S. 354, 374 (1988) (“Congress has drawn a bright line between state and federal authority in the setting of wholesale \nrates and in the regulation of agreements that affect wholesale rates.”). \n29 See Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 153 (2016). \n30 See 16 U.S.C. § 824(b)(1) (explaining FPA’s jurisdictional bright line); Hughes, 578 U.S. at 153 (“The [FPA] . . . \nvests in [FERC] exclusive jurisdiction over wholesale sales of electricity in the interstate market” which is “a domain \nCongress reserved to FERC alone.”); South Carolina Pub. Serv. Auth. v. FERC, 762 F.3d 41, 84-87 (D.C. Cir. 2014) \n(in the electric transmission context, FERC “has ‘clear’ authority to reallocate capacity and production costs.”). \n31 See supra Part IV; PPL DSP V Order, 2020 PA. PUC LEXIS 646, *74 (Pa. Pub. Util. Comm’n 2020) (finding \nFERC’s “jurisdiction over NITS charges and the methodology used to calculate NSPLs” to be “exclusive” based on \nAmtrak 2020). But cf. 2020 Amtrak, 171 FERC ¶ 61,237 (June 18, 2020), order on reh’g, 173 FERC ¶ 61,043, at P 24 \n(Oct. 15, 2020) (2020 Amtrak Rehearing Order) (finding that Amtrak’s “clarification on whether or not the calculation \nand application of Network Service Peak Load falls within the Commission’s exclusive jurisdiction” was “unnecessary \nto the result reached in this case and [was] therefore denied”). \n32 2020 Amtrak Rehearing Order, 173 FERC ¶ 61,043, at P 24 (2020)."},{"page":17,"startToken":5710,"endToken":6045,"text":"15 \n \ncapacity and transmission cost allocation to LSEs serving those retail accounts. The PLC/NSPL \nvalues follow the retail customers as they shop between LSEs that are either state-licensed \ncompetitive suppliers or default suppliers within a restructured state. PJM sums or aggregates the \ncapacity obligations of all the retail accounts that the LSE serves and then allocates the \ncorresponding wholesale capacity costs or transmission costs to that LSE. This cost allocation \nmethod by PJM assigns costs to LSEs roughly commensurate with cost causers (i.e., the retail \naccounts that the LSEs serve). However, once the wholesale capacity costs are allocated to LSEs, \nFERC jurisdiction ends and state jurisdiction begins regarding how the LSE performs cost \nallocation to its retail customers. In vertically integrated states, the LSE is the transmission \nowner/Electric Distributor, and state utility commissions oversee the retail cost allocation. In \nrestructured states, like Pennsylvania, the LSE is one of two entities: a state-licensed competitive \nsupplier or the Electric Distributor; the PA PUC solely exercises jurisdiction over the retail \nallocation done by the Electric Distributor to default service customers. \nAs established above, PJM proposes in its RBP filing that state utility commissions \ndetermine the methods for assigning RBO values to individual retail customers/data centers/large \nloads for purposes of PJM allocating RBO capacity costs to LSEs serving those retail customers. \nPJM’s RBO proposal presents a jurisdictional question that FERC must address: While \nFERC’s jurisdiction clearly covers the act of PJM allocating wholesale capacity costs and \ntransmission costs to LSEs (i.e., by PJM summing the capacity/transmission obligations of all the \nretail accounts that the LSE serves based on PLC/NSPL values and assigning the aggregate costs \nto the LSEs),33 does FERC jurisdiction rightfully reach down to the methods for determining \nPLC/NSPL inputs, and by extension the RBO value inputs?  \n \n33 Cf. Tri-State Generation and Transmission Association, Inc., 196 FERC ¶ 61,127 (2026) (approving proposal to \n“allocate the cost of interconnection facilities and any additional network upgrades that a transmission provider"},{"page":18,"startToken":6045,"endToken":6313,"text":"16 \n \nTo support its proposal, PJM distinguishes between (1) the RBO methods for assigning \nRBO values to data centers and other large load retail customers for purposes of PJM’s allocation \nof RBP costs to LSEs, and (2) retail cost allocation methods used by LSEs in an Electric \nDistributor’s zone to price capacity to individual retail customers.34 While this distinction brings \nhelpful clarity between the PLC/NSPL values used by PJM for allocating wholesale capacity costs \nto LSEs and retail cost allocation methods used by LSEs to charge capacity rates/prices to \nindividual retail customers, it does not resolve the jurisdictional problem presented in PJM’s filing \nthrough PJM’s proposal for states to exercise jurisdiction to determine the RBO methods. \nMoreover, in its filing, PJM asserts that establishing RBO methods to allocate RBP costs \nto end use, retail customers requires cooperative federalism.35 It cites to a 2007 FERC Order where \nFERC distinguished between wholesale cost allocation methods and retail cost allocation \nmethods.36 Again, the cite to this FERC order does not resolve the jurisdictional problem presented \nby PJM’s proposal. Rather, the quotes that PJM relies on from this 2007 FERC Order provide \nsupport for the PA OCA’s assertion that PJM’s proposal presents a jurisdictional problem, as FERC \nclearly recognized its complete authority over wholesale cost allocation methods. Furthermore, for \ncooperative federalism to function, there must be clear divisions between federal and state \njurisdiction.  \n \ndirectly assigns to Tri-State Merchant to the Utility Member, who may elect to pass those costs directly to its HIL \nCustomer.”). \n34 PJM RBP Transmittal Letter at 99. \n35 Id. \n36 Id. at 99-100."},{"page":19,"startToken":6313,"endToken":6719,"text":"17 \n \nB. \nThere is time to get cost allocation right – by the time cost allocation comes \ndue for the first Delivery Year in which RBP Resources are expected to be in service \n(i.e., 2028/2029).  \nPJM states that its proposed RBO framework is pragmatic because in the short time \nremaining before the September 30, 2026 RBP, it would simply be infeasible for PJM to obtain \ndetailed information about the large loads and the various LSEs serving such large loads from \nevery state and RERRA in the PJM Region.37  \nHowever, the important date for purposes of determining final RBO methods for PJM’s \ncosta allocation of RBP costs to LSEs is when RBP obligations begin accruing for the first Delivery \nYear in which RBP Resources are expected to be in service.38 Hence, September 2026 is not the \ndeadline. There is time for FERC to address this cost allocation jurisdictional problem and ensure \nthat RBO methods are appropriately determined.  \nC. \nPotential Relief Options \n1. \nOption 1: Recognize and exercise exclusive jurisdiction over RBO value \nmethodologies; FERC can declare its exclusive jurisdiction over determining \nthe RBO methods and require jurisdictional transmission owners to make \nadditional tariff filings that propose RBO methods for their transmission zones \nwithin PJM. \nIf the methods for determining NSPL and PLC contributions are rightfully transmission-\nowner-determined under the FPA, for transmission zones within PJM, those methods are FERC \njurisdictional and PJM and states do not have discretion or authority to interfere with them given \nthat Attachment M-2s fall within transmission owner filing rights under FPA Section 205.39 The \n \n37 Id. at 107. \n38 Id. at 108. \n39 See supra Part IV; 16 U.S.C. § 824(b)(1) (explaining FPA’s jurisdictional bright line); cf. Tri-State Generation and \nTransmission Association, Inc., 196 FERC ¶ 61,127 (2026) (approving proposal to “allocate the cost of interconnection \nfacilities and any additional network upgrades that a transmission provider directly assigns to Tri-State Merchant to \nthe Utility Member, who may elect to pass those costs directly to its HIL Customer.”); Hughes v. Talen Energy Mktg., \nLLC, 578 U.S. 150, 153 (2016) (“The [FPA] . . . vests in [FERC] exclusive jurisdiction over wholesale sales of \nelectricity in the interstate market” which is “a domain Congress reserved to FERC alone.”); South Carolina Pub. \nServ. Auth. v. FERC, 762 F.3d 41, 84-87 (D.C. Cir. 2014) (in the electric transmission context, FERC “has ‘clear’ \nauthority to reallocate capacity and production costs.”)."},{"page":20,"startToken":6719,"endToken":7079,"text":"18 \n \nmethods for determining RBO values are analogous to the methods for determining NSPL and \nPLC contributions because they each require granularly determining retail customers’ \ncontributions to a category of wholesale costs. Because the methods for determining RBO values \nare—for jurisdictional purposes—analogous to and indistinguishable from equivalent methods for \ndetermining NSPL and PLC contributions,40 this same legal analysis and conclusion naturally \nextend to the methods for determining RBO values that will be assigned to individual retail \ncustomers/data centers for purposes of PJM allocating RBP costs to LSEs serving those retail \ncustomers. A FERC decision providing that the states can oversee the RBO value methodologies, \nwhile FERC retains exclusive jurisdiction to oversee the PLC/NSPL value methodologies, would \nresult in conflicting FPA interpretations and would therefore produce an unjust or absurd result.41 \nGiven the above, FERC can declare that it has exclusive jurisdiction to oversee RBO \nmethods and find PJM’s cost allocation proposal regarding RBO methods unjust and unreasonable \ngiven that PJM proposes that state utility commissions determine and approve the RBO methods. \nAs further relief, FERC should require jurisdictional transmission owners within PJM to submit \nadditional 205 tariff filings based on this docket to propose the RBO method for determining \nindividual retail customers’ RBO values within their respective transmission zones. As further \nrelief, FERC should mandate that the transmission owners make the 205 filings as attachments to \nthe PJM tariff and not permit such filings to be voluntary. The PA OCA further requests that FERC \nmandate that all jurisdictional transmission owners within PJM make Attachment M-2 filings for \n \n40 Cf. Scott Brewer, Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by \nAnalogy, 109 HARV. L. REV. 925, 936 (1996) (“[E]xemplary, analogical reasoning is . . . thoroughly familiar - in \nAnglo-American legal systems, anyway - in statutory and constitutional cases.” (citing California v. Carney, 471 U.S. \n386 (1984)). \n41 Ramaprakash v. FAA, 346 F.3d 1121, 1125 (2003) (“An agency’s failure to come to grips with conflicting precedent \nconstitutes ‘an inexcusable departure from the essential requirement of reasoned decision making.’” \n(quoting Columbia Broad. Sys. v. FCC, 454 F.2d 1018, 1027 (D.C. Cir. 1971)))."},{"page":21,"startToken":7079,"endToken":7401,"text":"19 \n \nPLC and NSPL methods, as this would improve transparency over cost allocation of capacity, \ntransmission, and RBP costs within PJM.   \n2. \nOption 2: Relinquish exclusive jurisdiction over PLC methodologies; \nFERC can declare that states have exclusive jurisdiction to determine PLC \nand NSPL methods, and by extension the proposed RBO method, and require \nElectric Distributors that are signatories to the RAA to report them to PJM. \nIt is undisputed that FERC’s jurisdiction covers the act of PJM allocating wholesale costs \nto LSEs (i.e., by PJM summing the capacity/transmission obligations of all the retail accounts that \nthe LSE serves based on PLC/NSPL values and assigning the aggregate costs to the LSEs). \nHowever, PJM’s filing raises the question of whether FERC’s jurisdiction rightfully reaches down \nto the methods for determining PLC/NSPL inputs, and by extension the methods for determining \nthe RBO inputs. This question raises confusion about federal and state roles withing the FPA’s \ncooperative federalism, and about where the dividing lines of jurisdiction properly rest. PJM’s \nfiling suggests that the answer is not that everything is FERC jurisdictional up to the point where \nPJM allocates to the LSEs. \nIndeed, this question recognizes that the PLC/NSPL/RBO methods are inputs to PJM’s cost \nallocation methods for capacity, transmission, and RBP costs, respectively. They are not PJM cost \nallocation methods in and of themselves. As inputs to PJM’s cost allocation methods for wholesale \ncapacity and transmission costs, they are developed using individual retail customer data. As \ninputs, they assign values to individual retail customers that follows the individual retail customers \nas the customers shop among state-licensed competitive suppliers and default suppliers within a \nstate. As inputs, they directly and substantially impact retail cost allocations of capacity and \ntransmission costs to retail customers, \nMoreover, in establishing the PLC/NSPL methods, it is curious how transmission owners, \nwhich do not legally have direct relationships with retail customers from a rates perspective, would"},{"page":22,"startToken":7401,"endToken":7674,"text":"20 \n \nbe the ones with the information to establish the methods for determining PLC/NSPL values for \nretail customers. It would seem, as PJM suggests, that individual Electric Distributors and state \nutility commissions are simply in a better position to establish methods to determine \nPLC/NSPL/RBO values that get assigned to retail customers, given that the Electric Distributors, \nnot transmission owners, serve retail customers pursuant to state utility commission-approved \ntariffs, which establish the rate classifications that retail customers belong in. Additionally, Electric \nDistributors, not transmission owners, have granular information about retail customers within \ntheir borders. Accordingly, PJM’s proposal raises the question of whether the methods for \ndetermining and assigning PLC/NSPL/RBO values to individual retail customers is exclusively a \nstate not federal power because state utility commissions have the authority to protect their retail \ncustomers by assigning these values recognizing state utility commission-approved tariffs and rate \nclassifications.  \nFurthermore, if this act of determining PLC/NSPL/RBO values and assigning them to \nindividual retail customers is exclusively a state power, cooperative federalism would necessitate \nthat state utility commission oversee the Electric Distributors’ determinations of the methods and \nthat Electric Distributors, as a condition of being a signatory to the RAA, be required to report \nthem to PJM so that PJM can perform its function to allocate wholesale capacity and transmission \ncosts. \nBased on the above, if the methods of determining NSPL and PLC contributions are not \nrightfully transmission owner-determined under the FPA, those methods are not FERC \njurisdictional and hence states can exercise jurisdiction over them. However, because the methods \nfor determining RBO values are—for jurisdictional purposes—analogous to and indistinguishable"},{"page":23,"startToken":7674,"endToken":8065,"text":"21 \n \nfrom equivalent methods for determining NSPL and PLC contributions,42 this same legal analysis \nand conclusion would naturally extend to the methods for determining RBO values that PJM \nproposes will be assigned to individual retail customers/data centers for purposes of PJM allocating \nRBP costs to LSEs serving those retail customers. By introducing a new interpretation of FERC’s \nstatutory authority under the FPA, PJM’s proposal would require complicated changes to PLC and \nNSPL methods that utilities have filed in Attachment M-2 of PJM’s Tariff.  \nTo depart from prior determinations, FERC must use reasoned decision making.43 PJM’s \nfiling and the PA OCA’s Protest offers FERC a rationale for departing from its prior decisions over \nPLC/NSPL methods and declaring state jurisdiction to oversee and determine the methods for \ndetermining PLC/NSPL methods and by extension the RBO method proposed in PJM’s filing.  \nIf FERC believes that states have exclusive authority to oversee Electric Distributors’ \ndetermination of PLC/NSPL/RBO values, it should declare that unequivocally and provide \nreasoned decision making in doing so. As further relief, FERC should direct and oversee an orderly \ntimely transition to replace the Attachment M-2 methodologies for setting PLC/NSPL values with \nElectric Distributor-reported methods. FERC and PJM should require Electric Distributors, as \nsignatories to the RAA, and as a condition of the RAA, to report their state or state utility \ncommission-approved PLC/NSPL/RBP value methodologies to PJM. PJM should only accept \nfrom Electric Distributors the state or state utility commission-approved tariffs or orders \nestablishing the PLC/NSPL value methodologies for the Electric Distributors’ borders. \n \n42 Cf. Scott Brewer, Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by \nAnalogy, 109 HARV. L. REV. 925, 936 (1996) (“[E]xemplary, analogical reasoning is . . . thoroughly familiar - in \nAnglo-American legal systems, anyway - in statutory and constitutional cases.” (citing California v. Carney, 471 U.S. \n386 (1984)).  \n43 See Leggett & Platt, Inc. v. NLRB, 988 F.3d 487, 494 (D.C. Cir. 2021) (“Courts have long recognized that ‘any \nagency’s unexplained departure from prior agency determinations is inherently arbitrary and capricious in violation \nof APA § 706(2)(A).’” (citation omitted)); see also Loper Bright Enters. v. Raimondo, 603 U.S. 369, 388 (2024) \n(quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)) (giving weight to agency statutory interpretation’s \n“consistency with earlier and later pronouncements”)."},{"page":24,"startToken":8065,"endToken":8396,"text":"22 \n \n3. \nOption 3: Establish a new jurisdictional category for PLC \nmethodologies for RBOs; FERC can legally distinguish PJM’s proposal for \nstate utility commissions to determine the RBO method from the PLC and \nNSPL methods and declare that state utility commissions have exclusive \njurisdiction to determine and approve the methods for determining RBO \nvalues for purposes of PJM cost allocation of RBP obligations to LSEs. \nThe PA OCA has not identified a way to legally distinguish the RBO method from the PLC \nand NSPL methods that are currently under FERC jurisdiction; hence, this Protest addresses the \nfirst two options. Importantly, if FERC decides that the RBO value methodology used by PJM for \nRBP cost allocation is distinguishable from the PLC/NSPL value methodologies used for \ncapacity/transmission cost allocation, FERC must expressly declare that states have jurisdiction \nover the RBO methods. Otherwise, without a clear jurisdictional path forward, when this issue \ncomes before state utility commissions, such commissions could find that they lack authority to \ndetermine the RBO methods, resulting in this important issue not advancing with greater clarity as \nto the details defining the RBO method. The result will be to default to PJM’s backup plan, which \nis allocating RBP costs to all LSEs PJM-wide on a pro rata basis using existing PLC methods. \nHowever, cost allocation to LSEs on a pro rata basis using PLC values is unjust and unreasonable \nbecause it will likely result in non-large load customers being allocated RBP costs despite these \nratepayers not having caused these costs.  \nD. \nFERC should adopt Option 1 by affirming its exclusive jurisdiction over RBO \nmethods and requiring each transmission owner to file Attachment M-2 amendments \ncontaining their proposed RBO method. \nFERC already exercises exclusive jurisdiction over PLC and NSPL methods that are \nindistinguishable from RBO methods for jurisdictional purposes, and FERC should expressly \ninclude RBO methods within this existing jurisdiction. FERC’s existing jurisdiction manifests at \nthe state level in unavoidable ways. For example, the PA PUC interpreted FERC’s “jurisdiction"},{"page":25,"startToken":8396,"endToken":8836,"text":"23 \n \nover NITS charges and the methodology used to calculate NSPLs” to be “exclusive.”44 And \nFERC’s existing jurisdiction shows up at the federal level in unavoidable ways. For example, \nFERC addressed a dispute regarding FirstEnergy’s Attachment M-2—which contains both the PLC \nand NSPL methodologies—by establishing hearing and settlement procedures under the FPA’s \nSection 205 legal standard.45 Attachment M-2 falls under Section 205 because it is a filed rate \nwithin PJM’s governing documents.46 \nThe methods for determining RBO values are analogous to the FERC-jurisdictional \nmethods for determining NSPL and PLC contributions because they each require granularly \ndetermining retail customers’ contributions to a category of wholesale costs. Because the methods \nfor determining RBO values are—for jurisdictional purposes—analogous to and indistinguishable \nfrom equivalent methods for determining NSPL and PLC contributions,47 existing FERC \njurisdiction naturally extends to the methods for determining RBO values that will be assigned to \nindividual retail customers/data centers for purposes of PJM allocating RBP costs to LSEs serving \nthose retail customers. \nIf FERC were to insist upon state jurisdiction in this context, that could create cascading \nconfusion and litigation risk. By introducing a new interpretation of FERC’s statutory authority \n \n44 PPL DSP V Order, No. P-2020-3019356, 2020 PA. PUC LEXIS 646, *69-74 (Pa. Pub. Util. Comm’n 2020), \nhttps://www.puc.pa.gov/pcdocs/1687575.docx. \n45 PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 1 (2012); PJM Interconnection, L.L.C., 144 FERC \n¶ 63,011, at P 24 (2013) (“[t]he primary issue underlying the Partial Settlement [was] whether Attachments M-1 and \nM-2 are just and reasonable, and not unduly discriminatory.”). \n46 See 16 U.S.C. § 824d(d) (“[N]o change shall be made by any public utility in any such rate, charge, classification, \nor service, or in any rule, regulation, or contract relating thereto, except after sixty days’ notice to the Commission and \nto the public.”); see also Okla. Gas and Elec. Co. v. FERC, 11 F.4th 821, 829 (D.C. Cir. 2021) (identifying filed rate \ndoctrine extends to matters directly affecting rates); PJM Power Providers Group v. FERC, 96 F.4th 390, 394 (3d. Cir. \n2024) (summarizing filed rate doctrine and applying it to PJM’s Tariff); Duquesne Light Co., 189 FERC ¶ 61,181, at \nn.109 (2024) (citing 16 U.S.C. § 824d(d))). \n47 Cf. Scott Brewer, Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by \nAnalogy, 109 HARV. L. REV. 925, 936 (1996) (“[E]xemplary, analogical reasoning is . . . thoroughly familiar - in \nAnglo-American legal systems, anyway - in statutory and constitutional cases.” (citing California v. Carney, 471 U.S. \n386 (1984))."},{"page":26,"startToken":8836,"endToken":9094,"text":"24 \n \nunder the FPA, state jurisdiction would render the RBO legally vulnerable and would likely require \ncomplicated changes to PLC and NSPL methods that utilities have filed in Attachment M-2 of \nPJM’s Tariff.48 \nA clear expression of FERC jurisdiction over transmission owners’ RBO methodologies—\nfiled within mandatory Attachment M-2s—is the most legally durable way to resolve the legal and \nregulatory confusion identified in this Protest. Accordingly, FERC should affirm its exclusive \njurisdiction over RBO methods and require each transmission owner to file Attachment M-2 \namendments containing their proposed RBO method. To the extent a transmission owner does not \ncurrently have an Attachment M-2 on file, FERC should require them to make the filing so that \nthe RBO and PLC methodologies are transparent and publicly available. \nThis is the just and reasonable result. \n \n \n \n48 Ramaprakash v. FAA, 346 F.3d 1121, 1125 (2003) (“An agency’s failure to come to grips with conflicting precedent \nconstitutes ‘an inexcusable departure from the essential requirement of reasoned decision making.’” \n(quoting Columbia Broad. Sys. v. FCC, 454 F.2d 1018, 1027 (D.C. Cir. 1971)); see also Leggett & Platt, Inc. v. NLRB, \n988 F.3d 487, 494 (D.C. Cir. 2021) (“Courts have long recognized that ‘any agency’s unexplained departure from \nprior agency determinations is inherently arbitrary and capricious in violation of APA § 706(2)(A).’” (citation \nomitted)); Loper Bright Enters. v. Raimondo, 603 U.S. 369, 388 (2024) (quoting Skidmore v. Swift & Co., 323 U.S. \n134, 140 (1944)) (giving weight to agency statutory interpretation’s “consistency with earlier and later \npronouncements”)."},{"page":27,"startToken":9094,"endToken":9309,"text":"25 \n \nVI. \nConclusion \nIn conclusion, FERC should find that PJM’s cost allocation proposal, within its RBP Tariff \nfiling, is unjust and unreasonable because it presents a jurisdictional problem and insufficiently \ndefines the Reliability Backstop Obligation method. FERC should remedy the unjust and \nunreasonable tariff by (1) declaring FERC’s exclusive jurisdiction to determine RBO value \nmethodologies; (2) determining that PJM’s cost allocation proposal for RBP obligations is unjust \nand unreasonable because it insufficiently defines the RBO method; (3) requiring jurisdictional \ntransmission owners within PJM to submit additional filings based on this docket to further define \nthe RBO method for determining individual customer’s RBO values within each transmission \nowner zone; (4) mandating that the transmission owners make conforming Attachment M-2 tariff \nfilings under FPA Section 205, containing the RBO value methodologies (and PLC/NSPL value \nmethodologies); and (5) setting a time frame to resolve protests and comments to the transmission \nowners’ tariff filings regarding the RBO methodologies. \n \n \n \n \n \n \n \n \nPennsylvania Office of Consumer \nAdvocate \n555 Walnut Street \n5th Floor, Forum Place \nHarrisburg, PA 17101-1923 \n717-783-5048 \n \nDated: August 21, 2026  \nRespectfully submitted, \n \nCounsel for: \nDarryl Lawrence \nPennsylvania Consumer Advocate \n \n/s/ Melanie Joy El Atieh   \nMelanie Joy El Atieh \nDeputy Consumer Advocate  \nPA Attorney ID # 209323 \nMElAtieh@paoca.org \n \nJosiah Harmar \nAssistant Consumer Advocate \nPA Attorney ID # 338426 \nJHarmar@paoca.org"},{"page":28,"startToken":9309,"endToken":9499,"text":"App’x A -1 \n \nAppendix A \nProtest of Pennsylvania Office of Consumer Advocate \nER26-3380 \nDifferentiating Peak Load Contribution Assignments from Cost Allocation  \nThis appendix attempts to graphically describe the existing processes for assigning capacity and \ntransmission peak load contribution megawatts (MWs) and allocating costs (Figure 1 and Figure \n2), and highlights the jurisdictional challenge raised in PJM’s backstop auction filing (Figure 3).  \nFigure 1 \n \nFigure 1 - MW Obligation Jurisdiction \nAs shown in Figure 1, the assignment of MW obligations from the RTO to the Zone/Area, and \nthen to LSE and to retail customers currently happens through PJM’s application of the Peak Load \nContribution (PLC) and Network Service Peak Load (NSPL) methods for capacity and \ntransmission service, respectively.  While PJM utilizes PLC and NSPL in settlements with LSEs, \nthe underlying PLC/ NSPL methods are established, and voluntarily filed as attachment M-2 to the \nPJM OATT, by the transmission owners.  All of these actions are under federal jurisdiction, \nincluding: 1) the assignment of MW obligations from Region to Zone/Area, 2) the assignment of \nMWs from Zone/Area to LSE, and importantly, 3) the assignment of MWs from the LSEs to the"},{"page":29,"startToken":9499,"endToken":9699,"text":"App’x A -2 \n \nretail customers, per Amtrak v PPL.  In step #3, PJM’s OATT dictates the mechanism according to \nwhich MW obligations are assigned to the retail customer through the application of the \ntransmission owner’s PLC/ NSPL method. Then the EDC sums these MWs across each LSE’s \nretail customers and reports the summation to PJM for purposes of MW obligation allocation to \nthat LSE.  \nFigure 2 \n \nFigure 2 - State Cost Allocation \nWhile federal jurisdiction oversees the process and methods for the assignment of MW obligations \nand LSE-level summation and reporting to PJM to effectuate cost assignment, the rates charged to \nretail customers for recovery of those revenues is state jurisdictional through either (1) retail utility \ntariffs, which may include state approval of direct pass through of federal rates, or (2) retail \ncontracts between state-licensed competitive suppliers and retail consumers. This is shown in \nFigure 2 in the orange box in the bottom right corner – governed by state rates and rate design. \nThis extends to the need for explicit approval from the PA PUC for Electric Distribution Company \ndefault service tariffs to pass through federal rates – such as Network Integration Transmission \nService (NITS) and Transmission Expansion Charges (TEC) – to retail customers."},{"page":30,"startToken":9699,"endToken":9828,"text":"App’x A -3 \n \nFigure 3 \n \nFigure 3 - Concern Over State Apportionment of MW Obligation \nOCA’s concern centers over the lack of state jurisdiction to establish an as-yet-to-be-developed \nmethod of assigning reliability backstop obligation (RBO) MWs to retail customers.  This is shown \nin the lower lefthand corner of Figure 3.  As compared to Figure 1 and Figure 2 – where assignment \nof MWs is subject to federal jurisdiction per Amtrak v PPL – PJM now proposes to have states \nestablish this method. If states lack the jurisdiction to establish this method, then PJM will \nimplement its backstop cost allocation method that will allocate reliability backstop costs to all \nconsumers based on the PLC method. This result – which is outside of the state’s control due to \njurisdictional boundaries – would be unjust and unreasonable."},{"page":31,"startToken":9828,"endToken":9866,"text":"1 \n \n \nCERTIFICATE OF SERVICE \nI certify that today I served this document on this proceeding’s official service list. \n \nHarrisburg, Pennsylvania; August 21, 2026. \n \n/s/ Josiah Harmar \n \nJosiah Harmar \nAssistant Consumer Advocate \nPA Attorney ID # 338426 \nJHarmar@paoca.org"}],"sections":[{"p":1,"at":0,"title":"Opening text","method":"opening text","endPage":2,"endAt":5,"startToken":0,"endToken":44},{"p":2,"at":5,"title":"Table of Contents","method":"printed heading","endPage":2,"endAt":411,"startToken":44,"endToken":65},{"p":2,"at":411,"title":"IV. FERC’s Exclusive Jurisdiction to Determine PLC and NSPL Value","method":"printed heading","endPage":2,"endAt":981,"startToken":65,"endToken":100},{"p":2,"at":981,"title":"A. PJM’s proposal to have states determine the RBO methods for addressing cost","method":"printed heading","endPage":2,"endAt":1280,"startToken":100,"endToken":132},{"p":2,"at":1280,"title":"B. There is time to get cost allocation right – by the time cost allocation comes due for","method":"printed heading","endPage":2,"endAt":3022,"startToken":132,"endToken":328},{"p":2,"at":3022,"title":"D. FERC should adopt Option 1 by affirming its exclusive jurisdiction over RBO","method":"printed heading","endPage":3,"endAt":165,"startToken":328,"endToken":382},{"p":3,"at":165,"title":"I. Introduction","method":"printed heading","endPage":3,"endAt":169,"startToken":382,"endToken":383},{"p":3,"at":169,"title":"Introduction","method":"printed heading","endPage":3,"endAt":1152,"startToken":383,"endToken":530},{"p":3,"at":1152,"title":"II. Executive Summary","method":"printed heading","endPage":3,"endAt":1157,"startToken":530,"endToken":531},{"p":3,"at":1157,"title":"Executive Summary","method":"printed heading","endPage":6,"endAt":819,"startToken":531,"endToken":1320},{"p":6,"at":819,"title":"III. Summary of Cost Allocation Portion of PJM’s Tariff Filing","method":"printed heading","endPage":10,"endAt":1313,"startToken":1320,"endToken":3220},{"p":10,"at":1313,"title":"IV. FERC’s Exclusive Jurisdiction to Determine PLC and NSPL Value Methodologies","method":"printed heading","endPage":12,"endAt":6,"startToken":3220,"endToken":3699},{"p":12,"at":6,"title":"A. NSPL Determinations for Transmission Costs Allocations to LSEs","method":"printed heading","endPage":13,"endAt":1657,"startToken":3699,"endToken":4352},{"p":13,"at":1657,"title":"B. PLC Determinations for Capacity Cost Allocations to LSEs","method":"printed heading","endPage":16,"endAt":6,"startToken":4352,"endToken":5175},{"p":16,"at":6,"title":"V. Argument","method":"printed heading","endPage":16,"endAt":20,"startToken":5175,"endToken":5177},{"p":16,"at":20,"title":"A. PJM’s proposal to have states determine the RBO methods for addressing cost","method":"printed heading","endPage":19,"endAt":6,"startToken":5177,"endToken":6314},{"p":19,"at":6,"title":"B. There is time to get cost allocation right – by the time cost allocation comes","method":"printed heading","endPage":19,"endAt":944,"startToken":6314,"endToken":6472},{"p":19,"at":944,"title":"C. Potential Relief Options","method":"printed heading","endPage":24,"endAt":1620,"startToken":6472,"endToken":8318},{"p":24,"at":1620,"title":"D. FERC should adopt Option 1 by affirming its exclusive jurisdiction over RBO","method":"printed heading","endPage":27,"endAt":6,"startToken":8318,"endToken":9095},{"p":27,"at":6,"title":"VI. Conclusion","method":"printed heading","endPage":27,"endAt":11,"startToken":9095,"endToken":9096},{"p":27,"at":11,"title":"Conclusion","method":"printed heading","endPage":31,"endAt":7,"startToken":9096,"endToken":9829},{"p":31,"at":7,"title":"CERTIFICATE OF SERVICE","method":"printed heading","endPage":31,"endAt":275,"startToken":9829,"endToken":9866}]}