{"document":{"slug":"filing-20260821-5306","title":"Comments of the Data Center Coalition in response to PJM Interconnection, L.L.C.’s 07/31/2026 proposed tariff filing to establish the Reliability Backstop Procurement","issued":"2026-08-21","accession":"20260821-5306","docket":"ER26-3380-000","group":"PJM filings","filer":"Data Center Coalition","kind":"comments","file":"sources/originals/20260821-5306_01.pdf","url":"https://elibrary.ferc.gov/eLibrary/filelist?accession_Number=20260821-5306","sha256":"e6c9f5a0c6ff9d73c3d42e633d6174aa6e438f30b6cfa067f6f18b956f53ed07","pages":10,"tokens":2385,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":274,"text":"1 \n \nUNITED STATES OF AMERICA \nBEFORE THE  \nFEDERAL ENERGY REGULATORY COMMISSION \n \n                                                                      \nPJM Interconnection, L.L.C.                            )  \n \n  Docket No. ER26-3380-000 \n \n \nCOMMENTS OF THE DATA CENTER COALITION \n \nPursuant to the Federal Energy Regulatory Commission’s (“Commission” or “FERC”) \nRules of Practice and Procedure, the Data Center Coalition (“DCC”) respectfully submits these \ncomments in response to PJM Interconnection, L.L.C.’s (“PJM”) July 31, 2026 filing proposing \nto establish the Reliability Backstop Procurement (“RBP”). \nDCC is the membership organization for the U.S. data center industry, representing \nleading data center owners and operators that maintain data center infrastructure and teams \nacross the country.1 DCC members build, own, and operate data centers that constitute \nsignificant loads within the PJM region, and DCC has been an active stakeholder in regional \nefforts to ensure reliability, enable new generation, and discipline regional load forecasts. DCC’s \nmember companies provide the essential digital infrastructure that underpins the modern \neconomy and supports critical public services, including cloud computing, artificial intelligence, \nemergency response systems, and public safety operations. \nFrom 2017 to 2023, the data center industry contributed $3.5 trillion to U.S. GDP. As the \nindustry unlocks economic opportunities across the country and the PJM region, supporting \naffordability is a foundational priority for DCC members and the communities they serve. DCC \nadvocates for grid reforms that minimize unnecessary cost burdens, align with cost causation, \n \n1 The Data Center Coalition is a membership organization of leading data center owners and operators. Public \ntestimony and written comments submitted by DCC do not necessarily reflect the views of each individual DCC \nmember. A list of current DCC members is accessible at https://www.datacentercoalition.org/members."},{"page":2,"startToken":274,"endToken":542,"text":"2 \n \nfacilitate responsible load growth, and support the development of new generation without \nimposing undue costs on existing ratepayers. While maintaining reliability is ultimately the \nresponsibility of utilities, grid operators, electric reliability organizations, and regulators, DCC \nmembers are also leaning in and leading as engaged partners supporting regional reliability \nduring periods of grid stress, including extreme weather, generation outages, and sudden load \nspikes.  \nDCC has consistently maintained that the most durable solution to PJM’s resource \nadequacy challenge is to enable customers adding significant new demand to bring new supply \nwith them. DCC members are prepared to do so. Throughout PJM’s Critical Issue Fast Path \nprocess, DCC advocated for a framework that would provide large loads a predictable pathway \nto procure new capacity bilaterally while avoiding duplicative procurement and double payment. \nDCC continues to believe bilateral procurement should be the preferred path for customers \nprepared to make those investments. \nThe RBP filed by PJM is not the framework DCC proposed. DCC, together with several \nPJM Electric Distribution Companies, supported an opt-in construct that would have provided \ncustomers greater flexibility to choose between bilateral procurement and participation in a \ncentralized backstop. Nevertheless, the filed proposal incorporates several important elements of \nthe Joint EDC/DCC proposal and, critically, recognizes qualifying bilateral contracts and self-\nsupply arrangements as offsets to the amount PJM will procure through the RBP. PJM itself \nacknowledges that significant components of the filed construct originated in the Joint \nEDC/DCC proposal. \nGiven the urgency of PJM’s resource adequacy challenge, DCC supports moving forward \nwith the RBP as a limited, one-time backstop. DCC therefore urges the Commission to accept"},{"page":3,"startToken":542,"endToken":831,"text":"3 \n \nPJM’s filing while ensuring that its implementation preserves customers’ ability and incentive to \nbring new supply to the system, appropriately assigns costs, and remains coupled with the \nbroader reforms necessary to get new infrastructure built. \nI. The Commission Should Preserve and Facilitate Bilateral Procurement of New Capacity \nDCC strongly supports PJM’s recognition of bilateral procurement and self-supply \nthrough the Qualifying RBP Offset UCAP MW framework. \nThat recognition is fundamental to the design. The RBP should be a backstop—not a \nsubstitute for bilateral investment. Where a customer has arranged for qualifying new capacity to \nserve its incremental demand, PJM should not procure duplicative capacity on that customer’s \nbehalf. Doing so would increase the size and cost of the RBP without providing a corresponding \nreliability benefit. \nPJM recognizes this principle in its filing. The Initial RBP Target will be reduced for \ndocumented bilateral contracts and qualifying self-supply arrangements for new capacity serving \nnew load. This approach appropriately creates a parallel pathway for customers to address their \nresource adequacy needs directly rather than relying exclusively on centralized procurement. \nThe Commission should preserve that pathway and ensure it is commercially workable. \nIn particular, implementation of the Qualifying RBP Offset framework should provide clear and \ntimely standards for demonstrating bilateral arrangements. PJM should require only the \ninformation reasonably necessary to establish that an arrangement satisfies the Tariff \nrequirements and should protect commercially sensitive information contained in PPAs and other \nbilateral contracts. Customers should not be required to disclose pricing or other commercially \nsensitive terms that are unrelated to PJM’s determination of whether the associated capacity \nqualifies for an offset. Additionally, PPA counterparties are often affiliates of the customer \nbringing new load online—but not necessarily the same entity, the Commission should make"},{"page":4,"startToken":831,"endToken":1145,"text":"4 \n \nclear that the party entering into the bilateral contract need not be the same legal entity as the \nlarge-load customer bringing new demand online, so long as the contracting party is acting on \nthat customer’s behalf or for that customer’s benefit, including through an affiliate arrangement. \nClarity is particularly important given the compressed implementation schedule \ncontemplated by PJM. The Commission should encourage PJM to provide customers with \nsufficient information, well in advance of the RBP information window, to understand what \ndocumentation will be required and how confidential commercial information will be protected. \nThe objective should be straightforward: every MW of qualifying new capacity that a \ncustomer brings to PJM should receive appropriate recognition before PJM determines how \nmuch additional capacity must be procured through the backstop.  \nII. RBP Costs Must Be Allocated to the Large Loads Driving the Need for New Capacity  \nDCC supports PJM taking action to address the full resource adequacy shortfall identified \nthrough the 2028/2029 Base Residual Auction. But support for addressing that reliability need \nmust be accompanied by an equally firm commitment to ensuring that the substantial costs of the \nRBP are appropriately assigned. The costs associated with serving new large loads should be \nborne by new large loads contributing to resource inadequacy and should not be shifted to \nexisting residential, commercial, or industrial customers or new large loads that have not \ncontributed to resource inadequacy. \nCost allocation was a central concern for DCC throughout the CIFP process and an \nimportant reason DCC supported the voluntary, opt-in framework reflected in the Joint \nEDC/DCC Proposal. Under an opt-in construct, there would have been a direct relationship \nbetween a large load's decision to participate in the procurement and its responsibility for the \nresulting costs. PJM instead elected to procure capacity sufficient to address the full identified \nshortfall through a mandatory backstop. DCC supports PJM taking action to address that"},{"page":5,"startToken":1145,"endToken":1433,"text":"5 \n \nshortfall, but the broader procurement makes it all the more important that the resulting costs \nultimately follow the large-load growth driving the need for new capacity. \nThe magnitude and duration of the potential costs underscore the importance of getting \nthis right. PJM proposes to procure approximately 6.8 GW of new capacity through \ncommitments that may extend for as long as fifteen years. Those commitments will result in \nsubstantial long-term payment obligations. An allocation methodology that allows even a portion \nof those costs to migrate to customers that are not responsible for the incremental load growth \nwould undermine a fundamental premise of the RBP and risk creating precisely the type of cost \nshifting that DCC and other stakeholders have sought to avoid. \nPJM appropriately recognizes that, while it can establish the allocation of RBP costs at \nwholesale, the assignment of those costs to individual retail customers remains a matter of state \njurisdiction. That distinction is important, but it means that Commission acceptance of PJM's \nfiling is only the first step in getting cost allocation right. Significant work will be required at the \nstate level to translate PJM's wholesale allocation into retail tariffs that accurately assign RBP \ncosts to the large loads responsible for the incremental demand, while protecting other customers \nfrom inappropriate cost shifts. \nThose state mechanisms must also appropriately recognize large loads that have taken \nresponsibility for their growth by bringing new capacity to the system. A customer that supports \nqualifying new generation should receive the benefit of that investment both in reducing the \namount PJM procures through the RBP and in the ultimate allocation of RBP costs. Otherwise, \ncustomers could face the very double-payment problem that the Qualifying RBP Offset \nframework is intended to prevent."},{"page":6,"startToken":1433,"endToken":1721,"text":"6 \n \nDCC has already committed to working constructively on these issues. DCC and the \nVirginia State Corporation Commission have agreed to work together to develop model retail \ntariff provisions designed to appropriately assign RBP costs while avoiding cost shifts to other \ncustomers. DCC intends to continue that work and encourages similar efforts among state \ncommissions, utilities, large-load customers, and other stakeholders throughout the PJM \nfootprint. \nThe Commission should recognize the importance of that state implementation process in \nconsidering PJM's filing. DCC supports PJM's decision to leave customer-level retail allocation \nto the states and encourages PJM to provide states and Electric Distributors with the information \nnecessary to implement those allocations accurately and transparently. Ultimately, the RBP's \ncost-allocation framework should accomplish a straightforward objective: large loads should pay \nthe costs associated with serving their incremental demand, receive appropriate credit when they \nbring new capacity to meet that demand, and existing customers should not be left with the bill. \nIII. The RBP Can Support Reliability Only If Procured Resources Reach Commercial \nOperation  \nThe RBP can improve resource adequacy only if the resources it procures actually reach \ncommercial operation in time to address the identified reliability need. \nPJM proposes to make commitments of up to fifteen years to resources capable of \nbringing new capacity to the system. But a long-term revenue commitment does not itself ensure \nthat a resource can be studied, interconnected, permitted, and constructed on the timeline \nrequired. Nor does it ensure that the interconnection facilities and transmission upgrades \nnecessary to deliver that resource can be planned, permitted, and constructed on time. \nThe Commission should therefore evaluate the RBP not simply as a procurement \nmechanism, but as one part of the broader process necessary to bring new capacity online. The"},{"page":7,"startToken":1721,"endToken":1973,"text":"7 \n \nmeasure of success should not be how many MW PJM contracts for, but how many MW actually \nreach commercial operation in time to address the identified reliability need. \nThat will require continued progress on generator interconnection. DCC supports PJM’s \nrecent efforts to accelerate viable generation through initiatives such as the Reliability Resource \nInitiative and Expedited Interconnection Track. Those measures are important, but the \nunderlying challenge remains. PJM must continue reducing study timelines, processing its \ninterconnection queue, identifying necessary interconnection facilities and transmission \nupgrades, and providing generation developers sufficient certainty to finance and construct \nprojects. \nThe same urgency must extend to the facilities necessary to interconnect and deliver \nthose resources. A generation project cannot contribute to reliability merely because the \ngenerating facility itself is ready to proceed. The necessary interconnection facilities and \ntransmission upgrades must also be studied, approved, sited, permitted, and constructed on a \ntimeline that allows the resource to reach commercial operation when PJM needs it. Delays \naffecting those facilities can become just as binding a constraint on new supply as delays \naffecting the generating resource itself. \nMany of those steps extend beyond PJM’s control. Generation projects, interconnection \nfacilities, and transmission infrastructure may require state and local permits, siting approvals, \nrights-of-way, equipment, fuel infrastructure where applicable, and other approvals before \nconstruction can be completed. States therefore have an equally important role in ensuring that \nresources capable of meeting PJM’s reliability needs—and the infrastructure necessary to \nconnect those resources to the system—can actually be constructed on the required timeline."},{"page":8,"startToken":1973,"endToken":2233,"text":"8 \n \nDCC encourages states across the PJM footprint to examine opportunities to accelerate \npermitting and siting of generation, interconnection facilities, and transmission infrastructure \nwhile maintaining appropriate environmental and community protections. PJM, for its part, \nshould continue working to ensure that its interconnection and transmission planning processes \nidentify and advance the facilities necessary for RBP resources to reach commercial operation \nwithout avoidable delay. \nThe region’s challenge is increasingly straightforward: PJM needs substantially more \ninfrastructure, and it needs that infrastructure faster. Procurement can help provide the revenue \ncertainty necessary to support investment, but procurement alone does not produce a functioning \nreliability resource. The RBP will achieve its purpose only if the resources it supports—and the \ninterconnection and transmission facilities necessary to deliver their output—can be studied, \npermitted, sited, constructed, and placed in service on the timeline required. \nIV. Conclusion \nDCC supports the Commission’s acceptance of PJM’s proposed Reliability Backstop \nProcurement as a limited, one-time measure to address the immediate resource adequacy \nshortfall. \nAt the same time, the RBP should remain what its name suggests: a backstop. Customers \nwilling to bring qualifying new capacity to the PJM system should continue to have a meaningful \nbilateral pathway to do so and should receive full recognition for those investments. RBP costs \nshould be allocated consistent with cost causation without shifting costs to customers that did not \ncause them, with retail implementation appropriately left to the states. \nMost importantly, the RBP cannot supplant the work necessary to get infrastructure built. \nDCC urges PJM, the Commission, and the states to maintain their focus on accelerating"},{"page":9,"startToken":2233,"endToken":2309,"text":"9 \n \ninterconnection, transmission development, permitting, and siting so that new generation can \nactually come online at the pace necessary to support reliability and continued economic growth. \nFor these reasons, DCC respectfully requests that the Commission accept PJM’s filing \nconsistent with the principles discussed above. \nRespectfully submitted,  \n/s/ Morgan A. Sipple                  \nMorgan A. Sipple \nDirector, Energy Policy – FERC and RTOs \nDATA CENTER COALITION \n1250 H Street, NW \nWashington, DC 20005 \nmorgan@datacentercoalition.org  \n \nDated: August 21, 2026"},{"page":10,"startToken":2309,"endToken":2385,"text":"10 \n \n CERTIFICATE OF SERVICE \nI hereby certify that I have this day served the foregoing document on each person \ndesignated on the official service list compiled by the Secretary of the Federal Energy Regulatory \nCommission in this proceeding. \nDated in Washington, D.C., on this 21st day of August, 2026. \n \n \n \n/s/ Morgan A. Sipple                  \nMorgan A. Sipple \nDirector, Energy Policy – FERC and RTOs \nDATA CENTER COALITION \n1250 H Street, NW \nWashington, DC 20005 \nmorgan@datacentercoalition.org"}],"sections":[{"p":1,"at":0,"title":"Opening text","method":"opening text","endPage":3,"endAt":255,"startToken":0,"endToken":578},{"p":3,"at":255,"title":"I. The Commission Should Preserve and Facilitate Bilateral Procurement of New Capacity","method":"printed heading","endPage":4,"endAt":890,"startToken":578,"endToken":958},{"p":4,"at":890,"title":"II. RBP Costs Must Be Allocated to the Large Loads Driving the Need for New Capacity","method":"printed heading","endPage":6,"endAt":1138,"startToken":958,"endToken":1589},{"p":6,"at":1138,"title":"III. The RBP Can Support Reliability Only If Procured Resources Reach Commercial","method":"printed heading","endPage":8,"endAt":1053,"startToken":1589,"endToken":2110},{"p":8,"at":1053,"title":"IV. Conclusion","method":"printed heading","endPage":10,"endAt":6,"startToken":2110,"endToken":2310},{"p":10,"at":6,"title":"CERTIFICATE OF SERVICE","method":"printed heading","endPage":10,"endAt":507,"startToken":2310,"endToken":2385}]}