ER26-3515-000 · 2026-08-13 · PJM Interconnection, L.L.C.
PJM proposes a large-load registry, interim service and bring-your-own capacity
Back to sections and commentaryPDF page 1
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
PJM Interconnection, L.L.C.
)
Docket No. ER26-____-000
PROPOSAL OF PJM INTERCONNECTION, L.L.C.
TO ESTABLISH INTERIM RESOURCE ADEQUACY SERVICE AND A LARGE
LOAD REGISTRY TO ADDRESS SYSTEM RELIABILITY
Craig Glazer
Vice President–Federal Government Policy
PJM Interconnection, L.L.C.
1200 G Street, NW, Suite 600
Washington, D.C. 20005
(202) 423-4743
craig.glazer@pjm.com
Ryan J. Collins
Vivian W. Chum
Wright & Talisman, P.C.
1200 G Street, NW, Suite 600
Washington, D.C. 20005
(202) 393-1200
collins@wrightlaw.com
chum@wrightlaw.com
Mark J. Stanisz
Associate General Counsel
PJM Interconnection, L.L.C.
2750 Monroe Blvd.
Audubon, PA 19403
(610) 666-8800
mark.stanisz@pjm.com
Attorneys for PJM Interconnection, L.L.C.
August 13, 2026
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TABLE OF CONTENTS
I.
BACKGROUND .................................................................................................. 13
A.
The Senior Task Force and Critical Issue Fast Path Stakeholder
Processes ................................................................................................... 15
B.
PJM Board Determination ........................................................................ 16
C.
Related PJM Large Load Filings .............................................................. 18
II.
THE PROPOSED REFORMS TO THE TARIFF AND THE RAA ARE
JUST AND REASONABLE AND NOT UNDULY DISCRIMINATORY
OR PREFERENTIAL ........................................................................................... 21
A.
Overview of Interim Resource Adequacy Service Framework and
Responsibilities of PJM and Electric Distributors to Implement
IRAS ......................................................................................................... 21
1.
The Interim Resource Adequacy Service framework ................... 21
2.
Responsibilities of PJM and Electric Distributors ........................ 25
B.
The Large Load Registry (RAA, Schedule 11, Section B) ....................... 28
1.
Overwhelming support from PJM stakeholders for a New
Large Load Registry to be established and maintained by
PJM ............................................................................................... 30
2.
The proposed definition of Large Load is just and
reasonable ..................................................................................... 31
3.
Information reported in the Large Load Registry ......................... 36
a.
Information in the Large Load Registry will help
PJM distinguish Large Loads from New Large
Loads and identify New Large Loads eligible for
IRAS ................................................................................. 38
b.
Information in the Large Load Registry will assist
in identifying Eligible New Large Loads that may
be called on to reduce their load or switch to on-site
back-up resources pursuant to IRAS ................................. 40
c.
Information in the Large Load Registry will assist
PJM operators in determining how best to support
reliability during periods of insufficient capacity ............. 41
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ii
d.
Confidentiality pursuant to Operating Agreement,
section 18.17 ..................................................................... 42
e.
Reliance on Large Load Registry must reflect
accurate and complete information on which PJM
may determine a baseline .................................................. 43
4.
PJM’s exercise of authority to require information from
LSEs and Electric Distributors, and to obtain information
from Large Loads and other entities ............................................. 45
C.
New Large Loads Can Avoid Being Subject to Interim Resource
Adequacy Service by Bringing New Capacity to Offset Their
Capacity Needs. This Is Consistent with the Ratepayer Protection
Pledge and Is a Just and Reasonable Condition to Maintaining
System Reliability ..................................................................................... 49
1.
Requirement for New Large Loads to bring capacity or be
subject to load reductions.............................................................. 49
2.
Bring Your Own New Capacity arrangements with New
Large Load .................................................................................... 50
a.
PJM proposes to define BYONC as new megawatts
of Unforced Capacity ........................................................ 50
b.
PJM is proposing reasonable gating criteria
designed to stimulate development of new capacity ......... 53
3.
To ensure the capacity benefits of BYONC are real and
lasting, PJM is proposing certain RPM participation
requirements .................................................................................. 55
4.
Reporting arrangements between BYONC and New Large
Loads, and obligations on BYONC of an arrangement ................ 59
a.
The clear two-step process for PJM to recognize
arrangements between New Large Loads and
BYONC............................................................................. 59
b.
Arrangements must be reported to PJM in a timely
manner to allow for them to be reflected in the RPM
Auctions, because an arrangement will not be
effective for Delivery Years before the BYONC
clears an RPM Auction ..................................................... 60
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iii
i.
Reporting BYONC-New Large Load
arrangements for the 2027/2028 and
2028/2029 Delivery Years ..................................... 61
ii.
Reporting BYONC-New Large Load
arrangements for the 2029/2030 Delivery
Year ....................................................................... 62
iii.
Reporting BYONC-New Large Load
arrangements for the 2030/2031 Delivery
Year and subsequent Delivery Years ..................... 63
c.
Rules for BYONC arrangements ...................................... 63
d.
The Accredited UCAP value for BYONC subject to
an arrangement is set in the first Delivery Year the
arrangement is in effect ..................................................... 65
5.
Allocated RBP UCAP MW .......................................................... 67
6.
Only Eligible New Large Loads will be considered
available to provide Interim Resource Adequacy Service,
and then only to the extent they do not have sufficient
BYONC to meet their capacity needs ........................................... 69
7.
Determination of the maximum amount of Interim
Resource Adequacy Service available for a Delivery Year
for the PJM Region and each Electric Distributor zone/area ........ 70
8.
PJM is not proposing to extend IRAS to New Large Loads
located in FRR Service Areas ....................................................... 73
D.
Load Reduction Under Interim Resource Adequacy Service ................... 74
1.
Interim Resource Adequacy Service will be needed only to
address potential capacity emergencies or IROL violations ......... 74
2.
How PJM will call an Interim Resource Adequacy Service
Action ............................................................................................ 81
3.
Electric Distributors must follow PJM directives to reduce
megawatts of load in response to an Interim Resource
Adequacy Service Action ............................................................. 83
4.
The IRAS load reduction framework is, at its core, a
product of cooperative federalism that recognizes the
significant role of the states in requiring New Large Loads
to reduce their load to support reliability pursuant to IRAS ......... 85
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iv
a.
During an Interim Resource Adequacy Event, PJM
will direct a MW quantity of load reduction to the
relevant Electric Distributor zone(s)/area(s) ..................... 86
b.
State efforts to develop load reduction programs
reflect a cooperative federalism framework that is
similar to that embedded in PJM’s proposal ..................... 87
c.
The division of authority between PJM and the
states and/or RERRAs is supported by relevant
precedent ........................................................................... 89
d.
The division of authority preserves the
Commission’s FPA sections 205 and 206 rights
over the IRAS framework ................................................. 92
5.
Reducing New Large Loads before Pre-Emergency Load
Management Reductions (EEA1) is not unduly
discriminatory or preferential ....................................................... 94
a.
New Large Loads are not similarly situated to other
loads in the PJM Region, constitute a separate, new
class of load, and are therefore appropriately subject
to different treatment......................................................... 95
b.
IRAS is only applicable in Delivery Years when
New Large Loads without arrangements with new
capacity give rise to a PJM Region Reliability
Requirement shortfall and provides opportunities
for New Large Loads to avoid being subject to load
reduction under IRAS ....................................................... 97
c.
Load reduction under Interim Resource Adequacy
Service appropriately treats New Large Loads as
NITS customers .............................................................. 100
E.
Compensation for Load Reduction Under Interim Resource
Adequacy Service ................................................................................... 101
1.
The proposed IRAS compensation approach respects and
reflects the federal and state division of authority and
responsibilities ............................................................................ 101
a.
The proposed IRAS rate is just and reasonable .............. 102
b.
Electric Distributors bear the responsibility, in
conjunction with applicable state authorities and
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v
New Large Loads, to implement the compensation
scheme............................................................................. 104
2.
The proposed billing indemnification language is just and
reasonable ................................................................................... 108
F.
Consistent with the Ratepayer Protection Pledge, PJM Is Proposing
to Exclude New Large Loads from the VRR Curve Until They
Bring New Capacity ................................................................................ 109
1.
Excluding incremental New Large Load Amounts from the
demand curve beginning with the 2029/2030 Delivery Year ..... 112
2.
New Large Loads with BYONC arrangements or Allocated
RPB UCAP MW will be reflected in the demand curve ............ 115
3.
Each of the three points on the VRR Curve would be
reduced by the Quantities of New Large Loads for the
relevant Base Residual Auction .................................................. 117
4.
The Incremental Auctions will reflect adjustments of
capacity previously committed, including any updated
adjustments to the Excluded RTO New Large Load
Amounts and/or Excluded LDA New Large Load Amounts...... 118
5.
PJM will maintain transparency by posting the Variable
Resource Requirement Curve in advance of the RPM
Auctions ...................................................................................... 119
III.
CORRESPONDENCE ........................................................................................ 121
IV.
REQUESTED EFFECTIVE DATE AND CONSENT TO
MODIFICATION OR SEVERANCE OF ISSUES ............................................ 121
V.
DOCUMENTS ENCLOSED .............................................................................. 125
VI.
SERVICE ............................................................................................................ 125
VII.
CONCLUSION ................................................................................................... 126
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1200 G Street, N.W., Suite 600
Washington, D.C. 20005-3898
Phone: 202.393.1200
Fax: 202.393.1240
wrightlaw.com
August 13, 2026
The Honorable Debbie-Anne A. Reese
Secretary
Federal Energy Regulatory Commission
888 First Street, N.E., Room 1A
Washington, D.C. 20426
Re:
PJM Interconnection, L.L.C., Docket No. ER26-___-000
Proposal to Establish Interim Resource Adequacy Service and a Large Load
Registry to Address System Reliability
Dear Ms. Reese:
PJM Interconnection, L.L.C. (“PJM”), pursuant to section 205 of the Federal Power
Act (“FPA”), 16 U.S.C. § 824d, hereby submits revisions to the Reliability Assurance
Agreement Among Load Serving Entities (“RAA”) and the PJM Open Access
Transmission Tariff (“Tariff”)1 to establish Interim Resource Adequacy Service
(“IRAS”)—a service to be implemented by PJM solely during periods when there are
insufficient resources to reliably meet demand in real time operations. When triggered by
system conditions, IRAS will enable PJM to prioritize load reduction in zones/areas where
New Large Loads2 have not brought their own new capacity or had their capacity needs
1 In the context of revisions proposed in this filing, the Tariff will be referred to as “proposed Tariff,” and the
RAA will be referred to as “proposed RAA.” Capitalized terms not otherwise defined herein shall have the
meaning as defined in the Tariff, Amended and Restated Operating Agreement of PJM (“Operating
Agreement”), RAA, and Consolidated Transmission Owners Agreement.
2 Proposed Tariff, Definitions – New Large Load (“‘New Large Load’ shall mean end-use customer load that
is either (a) a Large Load that goes into service after June 1, 2027, or (b) incremental load in-service after
June 1, 2027, that increases the existing end-use customer load at a single electrical site that, prior to such
incremental load, did not previously meet the definition of Large Load. However, to the extent three
consecutive Delivery Years meet the requirements of Tariff, Attachment DD-4, section IV(b)(iii), then New
Large Load shall mean end-use customer load that is either (a) a Large Load that goes into service after June
1 of the first Delivery Year for which the requirements of Tariff, Attachment DD-4, section IV(b)(iii) are not
met or (b) incremental load in-service after June 1 of the first Delivery Year for which the requirements of
Tariff, Attachment DD-4, section IV(b)(iii) are not met that increases the existing end-use customer load at
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Honorable Debbie-Anne A. Reese
August 13, 2026
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covered through the Reliability Backstop Procurement (“RBP”).3 New Large Loads can
avoid this condition on taking transmission service by bringing new capacity to the system,
as described below. The authority sought herein would only be invoked in those situations
where PJM determines that the available economic real-time supply may be insufficient to
maintain reserves to meet applicable Reserve Requirements and/or Interconnection
Reliability Operating Limits (“IROL”) within prescribed limits and prevent cascading
outages.4
The proposed IRAS framework and the other enclosed revisions fall squarely
within the Federal Energy Regulatory Commission’s (“Commission”) established
transmission jurisdiction and wholesale jurisdiction and has been carefully designed to
respect the cooperative federalism approach established under the FPA and animating
several other recent landmark Commission determinations, including the large load show
cause proceedings.5 As such, IRAS respects existing bright-line divisions between retail
a single electrical site that, prior to such incremental load, did not previously meet the definition of Large
Load.”).
3 Although the proposed IRAS framework and other revisions proposed herein may refer to the RBP, the two
filings are independent of each other. In short, , IRAS can and should be accepted and made effective as
requested.
4 The North American Electric Reliability Corporation (“NERC”) defines an Interconnection Reliability
Operating Limit as “[a] System Operating Limit that, if violated, could lead to instability, uncontrolled
separation, or Cascading outages that adversely impact the reliability of the Bulk Electric System.” Glossary
Terms, North American Electric Reliability Corporation, https://www.nerc.com/glossary-of-terms?alpha=I
[https://perma.cc/TZ9W-MZ4K] (last visited Aug. 11, 2026) (defining Interconnection Reliability Operating
Limit); IRO-009-2 – Reliability Coordinator Actions to Operate Within IROLs, North American Electric
Reliability Corporation, https://www.nerc.com/globalassets/standards/reliability-standards/iro/iro-009-2.pdf
[https://perma.cc/6MLX-HBHM] (last visited Aug. 11, 2026) (The appropriate NERC Standard:
IRO-009-2’s purpose is “[t]o prevent instability, uncontrolled separation, or cascading outages that adversely
impact the reliability of the interconnection by ensuring prompt action to prevent or mitigate instances of
exceeding Interconnection Reliability Operating Limits (IROLs).”).
5 See PJM Interconnection, L.L.C., 193 FERC ¶ 61,217 (2025) (“December 2025 Show Cause Order”); PJM
Interconnection, L.L.C., 195 FERC ¶ 61,211 (2026) (“June 2026 Order to Show Cause”).
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 3
and wholesale jurisdiction over transmission and distribution. It is an example of a federal
regime encouraging (but not mandating) states to re-evaluate load reduction plans, which
are traditionally in the state jurisdictional bailiwick, while providing PJM the necessary
tools to address situations where regional resource adequacy shortfalls would jeopardize
reliability.6 In this regard, it is an example of the federal regime helping to effectuate state
decisions associated with the rates, terms, and conditions of retail service. Moreover, the
IRAS framework, as proposed here, was developed following consultations and
discussions with states and stakeholders (through the Critical Issue Fast Path (“CIFP”)
process), and the proposal is intentionally designed to avoid conflicts with state authority
and regimes by leaving retail load reduction plans and retail cost allocation to state-level
entities, while offering non-mandatory options under the federal tariff to aid collection and
settlement of compensation for IRAS.
As further evidence of this federal-state division of labor, PJM anticipates
participating in efforts to develop standardized regulatory tools and model retail tariff
structures that individual state commissions may consider as they address the integration
of new large loads and otherwise decide whether and how to act in response to the evolving
federal wholesale landscape, inclusive of the IRAS filing.
To support the IRAS framework, PJM is also proposing three foundational
revisions in this filing. First, PJM is proposing revisions to the RAA7 to clarify a Load
Serving Entity’s (“LSE”) obligation to bring new capacity in an amount that equals or
6 Under PJM’s existing authority, it may receive load reduction plans from Electric Distributors and other
Members. See, e.g., Operating Agreement, sections 10.4, 11.3.1(e).
7 Proposed RAA, section 7.8.
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Honorable Debbie-Anne A. Reese
August 13, 2026
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exceeds its New Large Loads’ peak load or be subject to load reduction requests during
Emergencies prior to Pre-Emergency Load Management Response. This principle lays the
foundation for the IRAS paradigm in PJM that facilitates large load interconnections in a
manner similar to the Southwest Power Pool’s (“SPP”) Conditional High Impact Large
Load Service (“CHILLS”) construct, which “allows transmission customers serving [a
certain category of load called High Impact Large Loads] to reliably receive transfers of
energy [subject to curtailment and interruption] until sufficient designated resources and/or
network upgrades are in place to support long-term, firm transmission service[,]” where
terms and conditions of service are “intended to incentivize transmission customers . . . to
obtain the designated resources and/or complete the network upgrades needed to procure
long-term firm transmission service through existing tariff processes.”8 In addition, this
principle is consistent with the Ratepayer Protection Pledge introduced in March 20269 and
recently expanded in July 2026,10 which assures that New Large Loads will, at a minimum,
8 June 2026 Order to Show Cause, 195 FERC ¶ 61,211.
9
Ratepayer
Protection
Pledge,
The
White
House
(Mar.
4,
2026),
https://www.whitehouse.gov/releases/2026/03/ ratepayer-protection-pledge/ [https://perma.cc/N8PH-K82T]
(“Ratepayer Protection Pledge”).
10 President Trump’s Ratepayer Protection Pledge Secures American AI Dominance, Protects Consumers,
The White House (July 23, 2026), https://www.whitehouse.gov/releases/2026/07/president-trumps-
ratepayer-protection-pledge-secures-american-ai-dominance-protects-consumers/ [https://perma.cc/9VDB-
B4EH] (“Ratepayer Protection Pledge Announcement”); Data centers pay their way. Ratepayers pay theirs.,
The White House, https://www.whitehouse.gov/ratepayer-protection-pledge/ [https://perma.cc/3WBQ-
RXW4] (last visited on Aug. 12, 2026) (“July 2026 Ratepayer Protection Pledge Update”) (identifying 282
utilities, cooperatives, data centers, and 23 governors that joined the Ratepayer Protection Pledge, including
38 data centers: Aligned Data Centers, LLC; Amazon.com, Inc.; Beale Infrastructure Group, LLC;
CleanSpark LLC; Cloud HQ LLC; Cologix, Inc.; Compass Datacenters, LLC; Core Scientific, Inc.;
CoreWeave, Inc.; Corscale, LLC; Crusoe Technologies LLC; CyrusOne, Inc.; DataBank Holdings, Ltd.;
Digital Realty Trust, Inc.; EdgeConnex Inc.; EdgeCore Digital Infrastructure (d/b/a EdgeCore Internet Real
Estate, LLC); Equinix, Inc.; Google (d/b/a Alphabet Inc.); Iron Mountain Incorporated; Meta Platforms, Inc.;
Microsoft Corporation; Nebius Group N.V.; NTT Global Data Centers (d/b/a NTT DATA, Inc.); OpenAI,
L.L.C.; Oracle Corporation; Oppidan Connect Data Centers (d/b/a Oppidan Investment Company); Prologis,
Inc.; Quality Technology Services, LLC; Rowan Digital Infrastructure Pty. Ltd.; Skybox Datacenters, LLC;
STACK Infrastructure, Inc.; Starwood Digital Ventures (d/b/a Starwood Capital Operations, LLC); Stream
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Honorable Debbie-Anne A. Reese
August 13, 2026
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“build, bring, or buy the new generation resources and electricity needed to satisfy their
new energy demands, paying the full cost of those resources whether by building, or buying
from, new or otherwise additive power plants” because it “advances self-sufficiency and
protects Americans from higher prices.”11
Second, PJM is proposing revisions to the RAA to establish a Large Load
Registry—a database of information pertaining to Large Loads that will be established and
maintained by PJM. The Large Load Registry, while reliant on information provided by
others, will aid PJM in administering recent resource adequacy initiatives, including IRAS,
as well as likely useful in the implementation of other Large Load-related initiatives.12
Third, PJM is proposing to revise its Tariff and the RAA to include definitions of Large
Load and New Large Load.13
In addition to those revisions, PJM is proposing, beginning with the 2029/2030
Delivery Year, to exclude certain New Large Loads from the Variable Resource
Requirement (“VRR”) Curve to protect residential customers from capacity price
Data Centers, L.P.; Switch, Inc.; T5Data Centers, LLC; TA Realty LLC; Vantage Data Centers Management
Company, LLC; and x.AI LLC).
11 Ratepayer Protection Pledge.
12 In response to the Commission’s show cause directives related to Large Loads, PJM is evaluating how to
efficiently and cost effectively integrate Large Loads, including Large Load-specific procedures for
interconnection studies, processing transmission service requests, and providing transmission service without
cost shifting. PJM Interconnection, L.L.C., Motion of PJM Interconnection, L.L.C. to Hold Proceeding in
Abeyance and Request For Shortened Answer Period and Expedited Treatment, Docket No. EL26-67-000,
at 5-7 (July 28, 2026). As part of that evaluation, PJM is assessing the usefulness of a Large Load Registry
to support such efforts.
13 Proposed RAA, Definitions – Large Load (“‘Large Load’ shall mean end-use customer(s) load that has a
cumulative peak load of 50 megawatts [(“MW”)] or greater at a single electrical site behind one or more
points of interconnection, where for configurations involving multiple affiliated load facilities or multiple
points of interconnection with affiliated load facilities behind them, all affiliated load facilities within a one-
mile radius will be considered a single electrical site as further described in the PJM Manuals.”).
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Honorable Debbie-Anne A. Reese
August 13, 2026
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increases, consistent with the Statement of Principles Regarding PJM issued on January 16,
2026, by the National Energy Dominance Council (“NEDC”) and the 13 governors of the
PJM states, and the Ratepayer Protection Pledge introduced in March 2026,14 and as
recently expanded in July 2026.15
The IRAS and the related revisions proposed herein support system reliability in
the PJM Region. Insufficient commitments of capacity in the 2027/2028 and 2028/2029
Reliability Pricing Model (“RPM”) Auctions, primarily driven by the unprecedented
addition of large loads, most notably data centers, have given rise to resource adequacy
shortfalls—and associated real-time operational issues that IRAS is intended to address.
More specifically, in Delivery Years when RPM Auctions have failed to secure sufficient
capacity, under the proposed IRAS framework, PJM will have the ability to manage
real-time operational issues resulting from such shortages through Interim Resource
Adequacy Service Action.
Pursuant to IRAS, each Electric Distributor zone/area may be directed by PJM
dispatchers to reduce load up to the MW quantity of capacity attributable to Eligible New
Large Loads in that zone/area. Each Electric Distributor zone/area, in turn—based upon
appropriate, documented state-sanctioned load reduction plans that are either already in
place or will be developed and refined in conjunction—will determine which load to reduce
in response to a PJM IRAS directive.
14 See generally Ratepayer Protection Pledge.
15 See generally Ratepayer Protection Pledge Announcement.
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Honorable Debbie-Anne A. Reese
August 13, 2026
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Such actions by PJM at the regional level and Electrical Distributors at the local
level will be informed and supported by the Large Load Registry established through this
proposal. Indeed, the proposed registry will give Electric Distributors and state entities
access to critical information they may elect to rely upon when fashioning such load
reduction protocols (including through recently-announced VA SCC and DCC state-led
workshops). By way of example, IRAS would facilitate a decision by an Electric
Distributor in conjunction with relevant state entities, as applicable, to decide that specific
Eligible New Large Loads may be reduced during a Delivery Year when IRAS applies,
because such loads are not arranged with sufficient new capacity. Such new capacity
would have either been brought by the New Large Load themselves (“Bring Your Own
New Capacity” or “BYONC”) or Allocated RBP Unforced Capacity (“UCAP”) MW. This
aspect of the IRAS framework is consistent with the Ratepayer Protection Pledge
introduced in March 202616 and recently expanded in July 2026,17 which recognizes that
New Large Loads “will voluntarily negotiate new, separate rate structures with their
utilities and relevant State governments wherever they build data centers.”18 The
availability to PJM of IRAS provides PJM with a new critical operational tool in those
hours when PJM is projecting its inability to maintain reliability for the region based on
system conditions.
While the enclosed Tariff revisions make clear that IRAS will be available starting
with the 2027/2028 Delivery Year, i.e., June 1, 2027, PJM requests that the Commission
16 See generally Ratepayer Protection Pledge.
17 See generally Ratepayer Protection Pledge Announcement.
18 Ratepayer Protection Pledge.
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Honorable Debbie-Anne A. Reese
August 13, 2026
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accept the enclosed proposed Tariff and RAA revisions effective October 12, 2026, which
is 60 days from the date of filing. First, the requested effective date will allow PJM to start
building the Large Load Registry and begin accepting information about New Large Loads
and arrangements with BYONC in time to expeditiously develop and post a new VRR
Curve with the New Load Loads removed to the extent they do not have arrangements with
BYONC (which is another aspect of this submission).
Second, Commission action by such date, with the requested effective date, will
provide regulatory certainty to parties seeking to enter into bilateral agreements for new
capacity and will support the ongoing efforts of the states to establish state-level tariffs to
address reduction priorities, as needed. PJM heard from data center representatives and
others on this need for clarity of the IRAS rules as a condition precedent to their finalizing
contracts for BYONC generation to offset their New Large Load additions. Approval of
the proposed IRAS framework will provide regulatory certainty to parties seeking to enter
into bilateral arrangements for new capacity, including through the ongoing, PJM-
administered bilateral matching process aimed at bringing new capacity to PJM.
Third, in its recent RBP Proposal Filing,19 PJM committed, subject to Commission
approval, to conduct the RBP as soon as practicable, with a target start of September 30,
2026, in accordance with the Statement of Principles Regarding PJM by the NEDC and the
13 governors of the PJM states.20 A zone/area in which New Large Loads have brought
19 PJM Interconnection, L.L.C., Reliability Backstop Procurement to Address Resource Adequacy Concerns
Stemming from Large Loads of PJM Interconnection, L.L.C., Docket No. ER26-3380-000 (July 31, 2026)
(“RBP Proposal Filing”).
20 Statement of Principles Regarding PJM, National Energy Dominance Council, 1 (Jan. 16, 2026),
https://www.energy.gov/documents/statement-principles-regarding-pjm
[https://perma.cc/35HJ-W56E]
(“NEDC/PJM Governors’ Principles”). The 13 state signatories are the governors of Delaware, Illinois,
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Honorable Debbie-Anne A. Reese
August 13, 2026
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their own new capacity or have had capacity allocated to it through the RBP will be at
lower risk of load reduction through the IRAS structure.
Fourth, approval of IRAS will support ongoing state efforts to establish retail-level,
operational procedures through which New Large Loads that have not brought their own
new capacity may be reduced ahead of residential and traditional industrial customers.
Each element of this proposal is just and reasonable. Nevertheless, in the event the
Commission deems it necessary, and to help facilitate the Commission’s acceptance of this
filing without delay, PJM provides notice that it consents to the Commission’s exercise of
authority to modify and/or sever any element of the proposed Tariff and RAA language to
the extent necessary and permitted under FPA section 205 and NRG Power Marketing,
LLC v. FERC,21 where such modification and/or severance is consistent with PJM’s
overarching objectives in this filing. While the each of the reforms proposed in this filing
is just and reasonable and act together to advance important resource adequacy objectives,
they may also be considered discretely.
While consenting to each issue being severable, PJM notes that some elements
build on each other, and therefore, Commission modification/severance of an issue may
require a corresponding/conforming modification to another element in order for the
Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee,
Virginia, and West Virginia. Except for in reference to the “NEDC/PJM Governors’ Principles,” reference
herein to the PJM states shall include the 13 state signatories and the District of Columbia.
21 NRG Power Mktg., LLC v. FERC, 862 F.3d 108 (D.C. Cir. 2017). As the Commission has repeatedly
stated, “[t]he United States Court of Appeals for the District of Columbia Circuit has held that, in certain
circumstances, the Commission has ‘authority to propose modifications to a utility’s [FPA section 205]
proposal if the utility consents to the modifications.’” N.Y. Indep. Sys. Operator, Inc., 188 FERC ¶ 61,051,
at P 22 n.36 (2024) (second alteration in original) (citing NRG Power Mktg., 862 F.3d at 114-15); see
Midcontinent Indep. Sys. Operator, Inc., 180 FERC ¶ 61,141, at P 26 n.29 (2022) (same), order on reh’g,
182 FERC ¶ 61,096 (2023); ISO New Eng. Inc., 175 FERC ¶ 61,172, at P 16 n.20 (2021) (same).
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Honorable Debbie-Anne A. Reese
August 13, 2026
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overall framework to function. For example, PJM’s proposal to shift the VRR Curve based
on the amount of New Large Load with capacity coverage is dependent on the BYONC
rules being in place. However, the Large Load Registry, the general obligation that Load
Serving Entities bring new capacity in an amount that equals or exceeds its New Large
Loads’ peak load, and other elements are discrete and may be severed and addressed
through separate procedures without interlocking concerns.22 For example, the proposed
requirement that LSEs designate new capacity in a cumulative amount that equals or
exceeds its New Large Loads’ peak load or be subject to interim and conditional
transmission service in emergency conditions has already been accepted in other regions
and should be accepted here.23
Further, PJM has been and continues to be in an ongoing dialogue with states and
other stakeholders regarding the important issues addressed by this filing, including the
interaction of federal/state responsibilities. PJM may, at the behest of the states, host
workshops and other fora to advance these discussions. PJM may, pursuant to FPA
section 205, amend aspects of the proposals submitted herein based on the product of those
discussions, and request that the Commission afford additional time for comments and
consideration as may be necessary or appropriate.
As further discussed below in Part IV, to the extent the Commission exercises such
authority to modify the proposed Tariff or RAA language herein pursuant to the FPA and
22 For example, given that IRAS will not be available until June 1, 2027, the compensation program, among
other proposed rules, may be resolved later without affecting the overall efficacy of this filing.
23 See, e.g., Sw. Power Pool, Inc., 195 FERC ¶ 61,213 (2026); Sw. Power Pool, Inc., 195 FERC ¶ 61,196
(2026); Sw. Power Pool, Inc., 194 FERC ¶ 61,031 (2026).
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 11
NRG Power Marketing, PJM respectfully requests that the Commission expressly prescribe
specific revised language to provide the “necessary predictability” for PJM to implement
such change(s) even before issuance of an order on compliance.24 PJM’s submittal of any
compliance filing implementing such modifications would further constitute PJM’s
consent and acceptance of the Commission’s modifications. PJM has the authority to
consent to modifications to PJM’s proposal by the Commission, pursuant to the FPA and
NRG Power Marketing. In contrast to the underlying facts in NRG Power Marketing, the
proposal submitted in this filing was authorized by the PJM Board of Managers (“PJM
Board”) and was not the result of a stakeholder-endorsed proposal.25
At bottom, IRAS is a just and reasonable means of addressing the influx of New
Large Loads into the PJM Region while maintaining resource adequacy, reliability, and
affordability in a manner that respects the divide between state and federal authorities and
avoids disrupting existing commercial arrangements. As the PJM Board recognized in a
24 PJM Interconnection, L.L.C., 175 FERC ¶ 61,137, at P 110 (2021) (first quoting Aera Energy LLC v.
FERC, 789 F.3d 184, 190-92 (D.C. Cir. 2015) (“[A]ffirming the Commission, finding ‘FERC’s conditional
acceptance . . . simply required Kern River to substitute one number for another when allocating costs to the
rolled-in shippers. . . . Because this mechanical change gave Kern River no discretion to adjust its rate models,
FERC provided sufficient notice to ratepayers.’”); and then quoting Elec. Dist. No. 1 v. FERC, 774 F.2d 490,
493 (D.C. Cir. 1985) (“[V]acating when the ‘effective date of an order set[] forth no more than the basic
principles pursuant to which the new rates are to be calculated.’” (second alteration in original))). As the
Commission elaborated further in PJM Interconnection, mere “direction” without “sufficient detail on each
element [of the replacement rate] that [customers/market participants] could determine when their
transactions would be subject to [the new rule],” would mean that implementation of the compliance directive
prior Commission approval would violate the filed rate doctrine. Id. (quoting Elec. Dist. No. 1, 774 F.2d at
493 (“[P]urchasers of electricity cannot plan their activities unless they know the cost of what they are
receiving, ‘providing the necessary predictability is the whole purpose of the well-established filed rate
doctrine.’” (citing Ark. La. Gas Co. v. Hall, 453 U.S. 571, 577 (1981)))).
25 NRG Power Mktg., 862 F.3d at 112 (noting that PJM developed proposed revisions filed with the
Commission through its stakeholder process and that the proposed revisions “received overwhelming support
from PJM’s stakeholders”).
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 12
January 16, 2026 letter,26 IRAS—which, in its earlier iteration, was referred to as “Connect
& Manage”—is just one part of a multi-pronged, ongoing effort by PJM to respond to the
challenges stemming from the influx of Large Loads into the PJM Region.27 Indeed, PJM
continues to make progress on a broader, holistic review of its capacity market, the RPM,
to identify durable, more holistic solutions to concerns stemming from large load
additions.28 More specifically, on May 6, 2026, PJM issued a white paper, Powering
Reliability Through Market Design: Addressing Rising Demand and Constrained Supply,
and Stimulating Investment to Support Durable Reliability, which inter alia, posed
foundational questions facing PJM’s capacity market today and proffered three distinct,
albeit not mutually exclusive, paths forward.29 These foundational questions and proposed
paths forward are a starting point towards more holistic solutions to PJM’s resource
adequacy concerns.30 This ongoing review is in line with the NEDC/PJM Governors’
Principles, which urged PJM to “embark on a stakeholder process to reform the capacity
26 Letter of David E. Mills, PJM Board Chair, Board Decisional Letter on Critical Issue Fast Path - Large
Load Additions, PJM Board (Jan. 16, 2026), https://www.pjm.com/-/media/DotCom/about-pjm/who-we-
are/public-disclosures/2026/20260116-pjm-board-letter-re-results-of-the-cifp-process-large-load-
additions.pdf [https://perma.cc/P57T-ZXYJ] (“January 2026 Board Letter”).
27 PJM is proposing Interim Resource Adequacy Service, as opposed to Connect & Manage,” to reflect that
the proposal is for a new load reduction service provided by New Large Load that does not bring sufficient
new capacity to meet the loads’ resource adequacy needs, and to avoid confusion and conflation between
“Connect & Manage” and the ongoing efforts to interconnect Large Loads in the Commission’s show cause
proceeding in Docket No. EL26-67 and PJM’s development (and future filing of) of an FPA section 205
proposal to address the Commission-identified issues.
28 See Powering Reliability Through Market Design: Addressing Rising Demand and Constrained Supply,
and Stimulating Investment to Support Durable Reliability (May 6, 2026), https://www.pjm.com/-
/media/DotCom/library/reports-notices/special-reports/2026/20260506-powering-reliability-through-
market-design.pdf [https://perma.cc/3W8Z-M4TQ].
29 Id.
30 PJM Interconnection, L.L.C., PJM to Lead Market Reform Effort to Support Generation Investment and
Reliability, PJM Inside Lines (May 6, 2026), https://insidelines.pjm.com/pjm-to-lead-market-reform-effort-
to-support-generation-investment-and-reliability/ [https://perma.cc/J2KW-LRW2].
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 13
market to ensure long-term viability and prevent consumers from bearing excessive
ongoing costs,” with an ultimate goal of returning PJM to market fundamentals.31
I.
BACKGROUND
PJM hosts the largest concentration of data center load in the world.32 “PJM’s load
forecast predicts peak load growth of 32 gigawatts [(“GW”)] from 2024 to 2030, 30 GW
of which is projected to be from data centers.”33 Year-over-year, the shortfall of capacity
supply needed to meet demand (plus a reasonable reserve margin) has grown despite a net
increase of 1,294.4 MW Installed Capacity (“ICAP”) of supply between the 2027/2028 and
2028/2029 Base Residual Auction (“BRA”).34 In other words, the addition of new supply
has not kept pace with rapid large load demand growth, thus giving rise to the significant
tightening of the capacity market in recent years and subsequent resource adequacy
shortfalls. To mitigate the potential reliability risks associated with resource adequacy
31 NEDC/PJM Governors’ Principles at 1; see also PJM Interconnection, L.L.C., CIFP Reliability Backstop
Procurement – PJM Proposal, 1 (June 11, 2026), https://www.pjm.com/-/media/DotCom/committees-
groups/cifp-rbp/2026/20260611/20260611-item-04a---pjm-reliability-backstop-proposal---post-meeting-
materials.pdf [https://perma.cc/X7T7-5RPB] (providing background on stakeholder engagement).
32 See, e.g., Laila Kearney, Biggest US power grid operator moving forward with plan to manage data
centers, Reuters (Nov. 20, 2025), https://www.reuters.com/business/energy/biggest-us-power-grid-operator-
moving-forward-with-plan-manage-data-centers-2025-11-19/ [https://perma.cc/7M34-52V4].
33 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 8 & n.24 (citing Letter of David E. Mills, PJM
Board Chair, PJM Board Letter Implementing CIFP for Large Load Additions, (Aug. 8, 2025),
https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-disclosures/2025/20250808-pjm-
board-letter-re-implementation-of-critical-issue-fast-path-process-for-large-load-additions.pdf
[https://perma.cc/F9KV-B7HK] (“August 2025 Board Letter”)). Since the issuance of the August 2025
Board Letter, PJM has published its 2026 Long-Term Load Forecast Report, which anticipates lower peak
demand in the near term due to forecasting improvements, revising the peak load forecast for 2030 downward
by 875 MW, but confirms significant growth in the next 20 years. PJM Interconnection, L.L.C., PJM’s
Updated 20-Year Forecast Continues to See Significant Long-Term Load Growth, PJM Inside Lines (Jan. 14,
2026),
https://insidelines.pjm.com/pjms-updated-20-year-forecast-continues-to-see-significant-long-term-
load-growth/ [https://perma.cc/W3UY-F9HE].
34 2028/2029 Base Residual Auction Report, PJM Interconnection, L.L.C., 8 (July 14, 2026),
https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2028-2029/2028-2029-bra-
results-report.pdf [https://perma.cc/A53K-TXXY] (“2028/2029 BRA Report”).
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 14
shortfalls, PJM is proposing the IRAS as a mechanism to support reliability while allowing
New Large Loads to connect even when new capacity supply lags behind load growth.
The 2028/2029 BRA Report, dated July 14, 2026, indicates PJM’s BRA cleared
short of the PJM Region Reliability Requirement35 for a second consecutive year.36
Specifically, PJM’s BRA for the 2028/2029 Delivery Year, which ran from June 30, 2026,
to July 7, 2026, cleared 6,831.3 MW (in UCAP) short of PJM’s Regional Transmission
Organization (“RTO”)-wide reliability requirement at the market price cap of
$325/MW-day.37
Last year, PJM’s BRA for the 2027/2028 Delivery Year, which ran from
December 4, 2025, through December, 10, 2025, likewise cleared 6,623 MW short of the
PJM Region Reliability Requirement, at the market price cap of $333.44/MW-day
(UCAP).38 As both the Commission and the Department of Energy (“DOE”) have recently
highlighted, the pace of “growth [in electricity demand] is now higher than at any point in
the past two decades, driven in part by increasing quantities of large commercial and
industrial load, most notably data centers, connecting rapidly to the transmission system.”39
35 Tariff, Part I, section 1, Definitions – O – P - Q – PJM Region Reliability Requirement (“‘PJM Region
Reliability Requirement’ shall mean, for purposes of the Base Residual Auction, the Forecast Pool
Requirement multiplied by the Preliminary PJM Region Peak Load Forecast, less the sum of all Preliminary
Unforced Capacity Obligations of [Fixed Resource Requirement (“FRR”)] Entities in the PJM Region; and,
for purposes of the Incremental Auctions, the Forecast Pool Requirement multiplied by the updated PJM
Region Peak Load Forecast, less the sum of all updated Unforced Capacity Obligations of FRR Entities in
the PJM Region.”).
36 2028/2029 BRA Report at 3.
37 2028/2029 BRA Report at 3.
38 PJM Auction Procures 134,479 MW of Generation Resources, PJM Interconnection, L.L.C., 1 (Dec. 17,
2025), https://www.pjm.com/-/media/DotCom/about-pjm/newsroom/2025-releases/20251217-pjm-auction-
procures-134479-mw-of-generation-resources.pdf [https://perma.cc/A89W-W99B].
39 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 6 & n.18 (citing Interconnection of Large Loads
to the Interstate Transmission System, Advance Notice of Proposed Rulemaking, Docket No. RM26-4-000,
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 15
A.
The Senior Task Force and Critical Issue Fast Path Stakeholder
Processes
On January 16, 2026, the PJM Board issued a letter announcing its decision on the
CIFP process addressing large load issues in PJM, which set forth the roadmap for a multi-
pronged approach to addressing resource adequacy challenges, including “accelerat[ing]
and execute[ing]” a backstop capacity procurement and “address[ing] cost allocation for
any such procurement, including consideration of mechanisms that assign costs to those
LSEs that are short as a result of incremental load growth within their service areas.”40 The
NEDC/PJM Governors’ Principles were issued on the same day.
On March 25, 2026, the PJM Board issued a Problem/Opportunity Statement
directing that PJM implement a “framework that allows qualifying large loads to connect
to the PJM system subject to defined operational controls, including curtailment during
specified system conditions to protect residential customers from potential power
outages.”41 Subsequently, the Connect and Manage Senior Task Force (“Senior Task
Force”) was established to address such a framework. The Senior Task Force met five
times between March and May 2026.
at 2 (Oct. 23, 2025) (“DOE ANOPR”) (citing 2024 Long- Term Reliability Assessment, North American
Electric
Reliability
Corporation,
8
(Dec.
2024,
corrected
July
11,
2025),
https://www.nerc.com/globalassets/our-work/assessments/2024-ltra_corrected_july_2025.pdf
[https://perma.cc/Z4D4-AMQT])).
40 January 2026 Board Letter at 6.
41 Problem/Opportunity Statement: Board Directed ‘Connect and Manage’, PJM Interconnection, L.L.C.
(Mar.
25,
2026),
https://www.pjm.com/-/media/DotCom/committees-
groups/committees/mrc/2026/20260325/20260325-item-01---2-connect-and-manage---problem-
statement.pdf [https://perma.cc/45CR-8Z4S].
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 16
During that period, on April 8, 2026, the PJM Board issued a letter initiating the
CIFP to engage stakeholders in the development of an RBP proposal (“RBP CIFP”).42
Subsequently, on May 19, 2026, the PJM Board issued a second related letter, directing
that the scope of the RBP CIFP be expanded to incorporate a separate stakeholder process
to identify and reduce large load in the PJM Region, when necessary, to maintain sufficient
reserves to meet applicable Reserve Requirements and IROLs within limits, and avoid
cascading outages, if available economic generation is not sufficient. The PJM Board
determined that it would be appropriate to address both the RBP and IRAS in a single CIFP
process in light of the substantive link between these two proposals.
The expanded scope RBP and IRAS CIFP concluded on June 30, 2026, following
eight days of stakeholder meetings over the course of three months. On June 30, 2026,
stakeholders submitted advisory votes on 11 different proposals. All 11 proposals
regarding the concepts addressed by IRAS failed to achieve two-thirds stakeholder
support.43
B.
PJM Board Determination
The PJM Board reviewed the results of the June 30, 2026 stakeholder advisory
votes.44 Ultimately, the PJM Board concluded that “[i]n light of the deteriorating resource
42 Letter of David E. Mills, Interim President and CEO, PJM Interconnection, L.L.C. (Apr. 8, 2026),
https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-disclosures/2026/20260408-cifp-
rbp-initiation-letter.pdf [https://perma.cc/8LM5-9VX3] (stating the intent of the letter was to addresses the
initiation of the CIFP – RBP accelerated stakeholder process by the PJM Board).
43 PJM Members Committee, MC Voting Results for RBP Proposals Agenda Items 3L through 3X, PJM
Interconnection,
L.L.C.,
https://www.pjm.com/committees-and-groups/committees/mc
[https://perma.cc/5CSQ-DP4K] (last visited Aug. 12, 2026) (Scroll to “Meeting Materials” and search for
2026, click on link for “6.30.2026 Special MC,” scroll to MC Voting Results – Agenda Items 3L to 3X and
click on each to view the PDF).
44 As PJM reported in a recent July 20, 2026 informational filing to the Commission, PJM sought additional
feedback on the RBP proposal from stakeholders on specific topics through further polling, which concluded
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 17
adequacy outlook, and consistent with [the PJM Board] letter issued to the stakeholders on
May 19, 2026, . . . PJM must take timely action within its control to begin restoring resource
adequacy.”45 Thus, the PJM Board directed PJM to file a proposal that includes the
following elements:
• IRAS, which will be applicable to “[N]ew Large Loads that, as of
June 1, 2027, do not bring sufficient capacity to serve their resource
adequacy needs and cannot otherwise be served at the 1-in-10 reliability
standard[,]” with load reductions under the service occurring before
deployment of Pre-Emergency Load Management;46
• A Large Load Registry, which will require Electric Distributors “to
provide the information necessary for PJM to improve the accuracy and
transparency of load forecasts and to administer the [RBP] and
[IRAS];”47
• Compensation for reduced load under IRAS “for Large Load customers
that are directed to reduce their consumption” with “[d]eterminations as
to which retail customers may fund such a program or whether specific
Large Loads would be entitled to such compensation (or may waive
such compensation consistent with the Ratepayer Protection Pledge)
will be determined by state authorities under state law or [Relevant
Electric Retail Regulatory Authorities (“RERRA”)] as may be
applicable[,]” and administered by the relevant “Electric Distributor in
coordination with the relevant state authorities or RERRA[.]”48 and
on July 10, 2026. PJM Interconnection, L.L.C., PJM Informational Report on Stakeholder Processes
Addressing Resource Adequacy for Large Loads, Docket No. EL26-67-000, at 4 (July 20, 2026) (citing PJM
Interconnection, L.L.C., CIFP – Reliability Backstop Procurement / Connect & Manage, Summarized Poll
Results
(2026),
https://www.pjm.com/-/media/DotCom/committees-groups/cifp-rbp/postings/cifp-poll-
results-with-comments.pdf [https://perma.cc/T2X8-NKGD] (“CIFP - RBP/Connect & Manage Poll
Results”)).
45 Letter from Paula Conboy, Chair, PJM Board of Managers, Board Decisional Letter on Critical Issue Fast
Path – Reliability Backstop Procurement and Connect and Manage, 1 (July 27, 2026),
https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-disclosures/2026/20260727-board-
decisional-letter-on-cifp-reliability-backstop-procurement-and-connect-and-manage.pdf
[https://perma.cc/V9Z7-83AH] (“PJM Board July 2026 Decisional Letter”).
46 PJM Board July 2026 Decisional Letter at 2 (emphasis omitted).
47 PJM Board July 2026 Decisional Letter at 1.
48 PJM Board July 2026 Decisional Letter at 2.
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 18
• Exclusion of “[i]ncremental [N]ew Large Loads relative to the forecast
utilized for the 2028/2029 BRA . . . from the forecast used in future
RPM auctions for the 2029/2030 Delivery Year and beyond unless and
until there are new supply resources offered into an RPM auction in
sufficient quantity to cover the [individual] [N]ew Large Load.”49
On July 27, 2026, following a period of intense deliberation, during which the PJM
Board considered the merits of the 11 proposals, as well as various letters to the PJM Board,
the PJM Board issued a decisional letter directing PJM to submit the IRAS and the other
enclosed revisions, and to also submit the RBP proposal set forth in this filing.50 In a
separate FPA section 205 filing on July 31, 2026, PJM submitted the RBP Proposal
Filing.51 The proposal in this FPA section 205 filing reflects the IRAS framework,
including the Large Load Registry and compensation for reduced load under IRAS, which
was ultimately approved by the PJM Board on July 27, 2026.
C.
Related PJM Large Load Filings
The Interim Resource Adequacy Service proposal is just one of numerous filings
that PJM has submitted or will shortly be submitting to the Commission, pursuant to FPA
section 205, to address the region’s resource adequacy issues.
As of today’s filing, the following matters have already been filed with the
Commission:
• An RBP proposal to establish a one-time procurement of new capacity
to procure for an RBP target based on the observed capacity shortfall in
the 2028/2029 Delivery Year BRA, as adjusted to reflect qualifying new
49 CIFP Framework for Service During Periods of Insufficient Resource Adequacy – PJM Proposal, PJM
Interconnection, L.L.C., 5 (July 27, 2026), https://www.pjm.com/-/media/DotCom/about-pjm/who-we-
are/public-disclosures/2026/20260727-cifp-framework-for-service-during-periods-of-insufficient-resource-
adequacy-executive-summary.pdf [https://perma.cc/GX7A-W3Q6] (“CIFP Framework for Service”).
50 See generally PJM Board July 2026 Decisional Letter.
51 See generally RBP Proposal Filing.
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 19
capacity serving new load and certain qualifying Electric Distributors
that elect and meet requirements to opt-out of the RBP;52
• An Expedited Interconnection Track temporary pathway for advanced
projects of significant size interconnected more quickly to address
PJM’s urgent need for additional Capacity Resources by facilitating the
interconnection of those new generation resources—outside of PJM’s
Cycle Process—that commit to firm commercial-in-service dates and
have a commitment from the Primary Siting Authority (or a state
executive officer in certain circumstances) to expedite consideration of
applicable siting, which was accepted by the Commission on June 9,
2026;53
• An extension of a price collar on RPM Auction outcomes through the
2029/2030 Delivery Year, which was accepted by the Commission on
April 8, 2026;54
• A one-time, reliability-based expansion, known as the Reliability
Resource Initiative, of the eligibility criteria for PJM’s Transition Cycle
#2 of PJM’s existing interconnection queue, which the Commission
accepted55 and resulted in PJM selecting 51 projects that can come
online quickly and provide more than 9,300 MW of reliable capacity;56
• An extension of the capacity must-offer requirement to all available
Existing Capacity Resources so as to allow RPM Auction outcomes to
more accurately reflect the actual quantity of Existing Generation
Capacity Resources, while continuing to safeguard against the potential
exercise of market power that may be exerted by the withholding of such
resources, which was accepted by the Commission;57 and
• A compliance filing and illustrative Tariff revisions to provide that the
Eligible Customer taking transmission service on behalf of a co-located
load may take a transmission service that reflects the co-located load’s
52 Since this spring, PJM has been concurrently facilitating a bilateral matching process to encourage
voluntary, bilateral agreements between supply and demand for new capacity.
53 See PJM Interconnection, L.L.C., 195 FERC ¶ 61,197, at PP 1, 7, 44-45 (2026).
54 See PJM Interconnection, L.L.C., 195 FERC ¶ 61,076, at P 51 (2026).
55 See PJM Interconnection, L.L.C., 190 FERC ¶ 61,084, reh’g denied, 192 FERC ¶ 61,085 (2025).
56 See PJM Interconnection, L.L.C., PJM Chooses 51 Generation Resource Projects To Address Near-Term
Electricity Demand Growth, PJM Inside Lines (May 2, 2025), https://insidelines.pjm.com/pjm-chooses-51-
generation-resource-projects-to-address-near-term-electricity-demand-growth/
[https://perma.cc/4BBH-
YR3F].
57 PJM Interconnection, L.L.C., 190 FERC ¶ 61,117, order on reh’g, 191 FERC ¶ 61,221 (2025).
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 20
ability and willingness to limit its use of the transmission system, which,
if utilized, would reduce the amount of capacity required to meet the
region’s resource adequacy needs. The Commission ruled on PJM’s
Tariff revisions and directed a future compliance filing to implement
these new transmission services that PJM will soon submit.58
The following filings aimed at addressing the impacts of new large loads on the
PJM Region are forthcoming:
• A fulsome FPA section 205 filing addressing the issues the Commission
raised in its June 2026 Order to Show Cause that will set forth the non-
rate terms and conditions for Eligible Customers to take transmission
service on behalf of large loads that are willing and able to limit their
energy withdrawals from the transmission system, which, if utilized,
will reduce the amount of capacity required to meet the region’s
resource adequacy needs; and
• Future enhancements to reserve products and updated reserve demand
curves to better account for ramping and uncertainty and better align
reserve pricing with operational practice.59
• In addition, PJM has undertaken the following initiatives:
o Improved load forecasts that include state review of large load
additions, addressing duplicative requests, the use of additional
third-party review and increased transparency;60 and
o Facilitating bilateral contracting by providing a voluntary matching
service that helps connect potential buyers with sellers of capacity,
as described at length in the RBP proposal filed July 31, 2026.
58 See PJM Interconnection, L.L.C., 195 FERC ¶ 61,209 (2026). On July 28, 2026, PJM submitted a motion
to extend its compliance filing with respect to, among other things, the Tariff revisions implementing these
new transmission services to allow for the concurrent development of the compliance language with the
development of a new FPA section 205 filing to propose new transmission services for Eligible Customers
taking transmission services on behalf of large loads that are not part of a co-location arrangement. PJM
Interconnection, L.L.C., Motion for Extension of Time for Specified Compliance Requirements and Request
for Expedited Treatment of PJM Interconnection, L.L.C., Docket Nos. EL25-49-000, et al. (July 28, 2026).
59 See PJM Interconnection, L.L.C., Informational Report on Stakeholder Process Addressing Resource
Adequacy for New Large Loads of PJM Interconnection, L.L.C., Docket No. EL26-67-000, at 8 (July 20,
2026).
60 See January 2026 Board Letter at 2.
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Honorable Debbie-Anne A. Reese
August 13, 2026
Page 21
II.
THE PROPOSED REFORMS TO THE TARIFF AND THE RAA ARE JUST
AND REASONABLE AND NOT UNDULY DISCRIMINATORY OR
PREFERENTIAL
A.
Overview of Interim Resource Adequacy Service Framework and
Responsibilities of PJM and Electric Distributors to Implement IRAS
1.
The Interim Resource Adequacy Service framework
As of right now, PJM will enter the 2027/2028 Delivery Year short of sufficient
capacity to meet the PJM Region Reliability Requirement. As PJM has explained, this
shortfall is due to a confluence of various factors, particularly the “unprecedented surge in
data center load” at a faster pace than new supply can come online,61 and the “speed of
connecting these large loads creates a fundamental misalignment between demand and
supply cycles,”62 resulting in “resource adequacy in the PJM service area [being] under
significant stress.”63 Through this FPA section 205 filing, PJM seeks to build on its prior
efforts to ameliorate the resource adequacy stress. PJM’s proposal in this filing can be
broadly thought of as consisting of five parts.
One, PJM proposes to clarify an LSE’s obligation to bring new capacity in an
amount that equals or exceeds its New Large Loads’ peak load or be subject to load
reduction requests during Emergencies prior to Pre-Emergency Load Management
Response. In codifying this principle, which is similar to one already inherent in SPP’s
61 See 2027/2028 Base Residual Auction Reserve Target Shortfall Report, PJM Interconnection, L.L.C., 1
(Feb. 9, 2026), https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2027-2028/2027-
2028-bra-reserve-target-shortfall-report.pdf [https://perma.cc/TA3Y-95AX] (“2027/2028 BRA Report”).
62 2027/2028 BRA Report at 4.
63 2027/2028 BRA Report at 2.
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large load integration construct,64 PJM is incentivizing resource adequacy and investing in
generation and related infrastructure to meet the projected demand growth.
Two, PJM proposes to administer and maintain a new Large Load Registry.
Through this centralized registry, PJM will be able to gain a better understanding of all the
Large Loads currently on its system and the New Large Loads that will interconnect in the
future. The registry will enable PJM to better forecast load growth, plan and manage the
transmission system, and study and provide the anticipated new transmission services for
co-located loads and Large Loads. PJM will not be the only beneficiary of the registry, as
the proposed RAA language explicitly contemplates that the registry will be available to
states, Transmission Owners, Electric Distributors, LSEs, the Independent Market Monitor
for PJM, and the Commission, subject to appropriate confidentiality and data protection
safeguards.
Three, PJM is proposing Interim Resource Adequacy Service, a new supplemental
capacity product through which New Large Loads provide a load reduction service that is
a tool available to PJM to manage resource adequacy shortfalls that would otherwise drive
shedding of native loads. Interim Resource Adequacy Service Action will be issued prior
to calling on Pre-Emergency Load Management, placing IRAS appropriately at the
beginning of PJM’s actions in the event of NERC Energy Emergency Alert Level 1
(“EEA1”), and PJM will update the Emergency Procedures in its PJM Manuals to detail
how and when it may call on IRAS.
64 See, e.g., Sw. Power Pool, 195 FERC ¶ 61,213, concur op. (Commissioner Rosner) at P 13; Sw. Power
Pool, 195 FERC ¶ 61,196 at P 15; Sw. Power Pool, 194 FERC ¶ 61,031, concur op. (Commissioner Rosner)
at P 1.
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Four, PJM is proposing Bring Your Own New Capacity or “BYONC” as the
category of new capacity eligible to address New Large Load capacity needs and through
which a New Large Load can reduce the amount of Interim Resource Adequacy Service it
may be asked to provide, consistent with the Electric Distributor’s approved load reduction
rules. The amount of IRAS a New Large Load will be eligible to make available is
inversely proportional to the amount of new capacity the New Large Load has brought to
the PJM system. New Large Loads have a number of “self-sufficiency” avenues (in the
language of the Ratepayer Protection Pledge) to avoid facing potential load reduction under
state curtailment priorities implementing IRAS at the retail level. Specifically, to the extent
a New Large Load does not want to provide IRAS, it needs to contract with new capacity
that meets the BYONC gating criteria, which are designed to ensure the capacity is actually
new and not repackaged and will provide capacity over at least 10 years. Many New Large
Loads have already committed through their recently executed Ratepayer Protection
Pledge to fund the electricity generation and infrastructure their projects require. IRAS
provides a tool available to PJM to manage resource adequacy issues through calling for
load reductions from those New Large Loads that do not adhere to the Ratepayer Protection
Pledge or have otherwise not brought new eligible capacity to offset their load additions.
Five, in future RPM Auctions, PJM is proposing to exclude from the VRR Curve
New Large Loads, to the extent they do not have arrangements with sufficient BYONC,
beginning with the 2029/2030 Delivery Year. To the extent New Large Loads do not
procure BYONC to meet their capacity needs, the rest of PJM’s load should not be exposed
to the price impacts caused by those New Large Loads’ procurement of their capacity needs
through the RPM Auctions. PJM’s proposal is designed to protect residential customers
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Honorable Debbie-Anne A. Reese
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from capacity price increases resulting from the effects of New Large Loads and is
therefore consistent with the Statement of Principles Regarding PJM issued on January 16,
2026, by the NEDC and the 13 governors of the PJM states and the Ratepayer Protection
Pledge.65
As discussed below, to implement these concepts, PJM proposes to establish a new
Attachment DD-4 to its Tariff to house the rules for Interim Resource Adequacy Service;66
revisions to the RAA to establish the Large Load Registry and the resource adequacy
obligations associated with interconnecting New Large Loads; and revisions to Tariff,
Attachment DD to adjust the VRR Curve. While each of these provisions is detailed later
in this transmittal letter, PJM takes this opportunity to describe the introductory section of
proposed Tariff, Attachment DD-4. Specifically, section I provides that the rules in
Attachment DD-4 are supplemented by the PJM Manuals and should be read “in
conjunction with the Reliability Assurance Agreement.”67 From there, the basic concepts
are introduced:
(1) “Interim Resource Adequacy Service is a load reduction service, effective
starting with the 2027/2028 Delivery Year . . . for the purpose of supporting the
65 PJM’s proposal in this respect is based on the forecasted resource adequacy shortfalls and uncertainty today
as to how much capacity will be procured through either the RBP or future BRAs. Nothing in this proposal
is intended to bind PJM or the Commission in the future if and when the supply/demand balance becomes
better aligned.
66 At proposed Tariff, Attachment DD-4, the IRAS rules fit well alongside the other resource
adequacy-related rules in the Tariff: Tariff, Attachment DD provides the Reliability Pricing Model rules,
Tariff, Attachment DD-1 provides a copy of the RAA rules on Demand Resource participation in RPM,
Tariff, Attachment DD-2 provides the rules for Peak Shaving Adjustments, and Tariff, Attachment DD-3 is
the list of state policies or programs accepted as Conditioned State Support and subject to the Minimum Offer
Price Rule.
67 Proposed Tariff, Attachment DD-4, section I.
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integration of New Large Loads to the PJM Region that are not in arrangements
with new capacity additions to the PJM Region;”68
(2) PJM can call on IRAS load reductions prior to calling on Pre-Emergency Load
Management Reductions Actions when needed to avoid a capacity shortage on
a regional or sub-regional basis;69
(3) PJM will maintain the Large Load Registry “pursuant to the Reliability
Assurance Agreement . . . [to] inform which New Large Loads are eligible to
be called on to provide Interim Resource Adequacy Service;”70 and
(4) PJM will “coordinate with Electric Distributors, and other Members as
appropriate, on the provision of Interim Resource Adequacy Service” and any
resulting compensation.”71
Each of these concepts is borne out in the proposed IRAS rules described in this transmittal
letter.
2.
Responsibilities of PJM and Electric Distributors
Because successful implementation of Interim Resource Adequacy Service will
require actions from PJM and Electric Distributors, PJM’s proposal delineates broadly the
responsibilities of PJM and Electric Distributors at the outset of proposed Tariff,
Attachment DD-4. Section II of proposed Tariff, Attachment DD-4 provides that PJM
shall be responsible for: maintaining the Large Load Registry; identifying Eligible New
Large Loads and the MW quantity of IRAS needed for each Electric Distributor zone/area
for a given Delivery Year, starting with the 2027/2028 Delivery Year; and issuing an
Interim Resource Adequacy Service Action based on system conditions and Eligible New
68 Proposed Tariff, Attachment DD-4, section I(a).
69 Proposed Tariff, Attachment DD-4, section I(b).
70 Proposed Tariff, Attachment DD-4, section I(c).
71 Proposed Tariff, Attachment DD-4, section I(d).
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Large Load Amounts directing Electric Distributors to reduce load in accordance with such
Interim Resource Adequacy Service Action.72
With regard to Electric Distributors, PJM proposes that they “shall” fulfill four
tasks. One, Electric Distributors must execute PJM’s load reduction directives when PJM
issues an Interim Resource Adequacy Alert.73 As discussed below in Part II.D.4.c, this
does not mean that PJM will identify specific New Large Loads for the Electric Distributor
to reduce; PJM will identify only aggregate MW values that need to be reduced, but such
values will be based on the maximum IRAS value PJM determined for the Electric
Distributor’s zone/area prior to the Delivery Year. The Electric Distributors, in
coordination with the appropriate states and/or RERRAs, LSEs, and LSE customers will
determine which loads should ultimately reduce subject to IRAS. PJM here is simply
memorializing current practice under which Electric Distributors, consistent with their
state programs, determine how to implement load reduction directives.
Two, Electric Distributors must coordinate with PJM on the development and
maintenance of the Large Load Registry. Specifically, PJM proposes that the Electric
Distributors must provide PJM with “any information or data the Electric Distributor
believes appropriate to facilitate an accurate Large Load Registry, including applicable
state or RERRA retail tariff or contractual obligations.”74 This coordination is just and
72 Proposed Tariff, Attachment DD-4, sections II(a)-(e).
73 Proposed Tariff, Attachment DD-4, section III(a). In full, this provision states: The Electric Distributor
shall “execute the Office of the Interconnection’s directives to implement Interim Resource Adequacy
Service Actions among the Eligible New Large Loads in the Electric Distributor’s zone/area, which is an
area within a Zone for which the relevant Electric Distributor specifies a separate Obligation Peak Load MW
value and is a service area of an Electric Distributor that is a separately identifiable, geographic area bounded
by wholesale metering.” Id.
74 Proposed Tariff, Attachment DD-4, section III(b).
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reasonable, as the Electric Distributor is privy to much of the information the proposed
Large Load Registry seeks to maintain. As discussed below in Part II.B, the initial
obligation to submit data to PJM is on the LSE serving the Large Load, but in order to
increase the accuracy of the registry, PJM finds valuable—and needed—the information
available to the Electric Distributors.
Three, Electric Distributors must “coordinate, as appropriate, with the relevant
state(s) or RERRA(s), individual Load Serving Entities, and customers served by the Load
Serving Entities in its zone/area to support transparent, effective, and orderly deployment
of Interim Resource Adequacy Service.”75 Through this coordination requirement, PJM is
not dictating how or on which terms the Electric Distributor must effectuate such
coordination. Rather, as with the first responsibility discussed above, PJM is
memorializing existing practices. And, here, PJM is merely articulating the expectation
that the Electric Distributor will be the entity to identify, consistent with applicable state
programs, the load to be reduced in response to an Interim Resource Adequacy Service
Action.
Finally, the Electric Distributor shall “implement compensation program consistent
with Tariff, Attachment DD-4, section X.”76 As discussed below in Part II.E, PJM is not
mandating how IRAS-directed load reductions are to be compensated. PJM is proposing
a just and reasonable maximum rate for such service. However, given that the Electric
Distributors, in accordance with state programs, will have identified the loads to be
75 Proposed Tariff, Attachment DD-4, section III(c).
76 Proposed Tariff, Attachment DD-4, section III(d).
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Honorable Debbie-Anne A. Reese
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reduced, it is the responsibility of the Electric Distributor and its applicable state regulator
to determine the appropriate compensation scheme. PJM’s proposal offers the Electric
Distributor and their state regulator much flexibility in this regard.
B.
The Large Load Registry (RAA, Schedule 11, Section B)
PJM is proposing to establish a registry of Large Loads in the PJM Region to be
maintained by PJM and updated periodically, and which may be “available to Authorized
Commissions, Transmission Owners, Electric Distributors, [LSEs], the Market Monitoring
Unit, and [the Commission]” and other entities pursuant to the Operating Agreement,
section 18.17, “subject to appropriate data protection safeguards required by Operating
Agreement, section 18.17.”77 To the extent consistent with existing confidentiality
protections in PJM’s Governing Agreements, PJM is also proposing that aggregated data
from the Large Load Registry be posted on the PJM website.78
The Large Load Registry will contain information about Large Loads in the PJM
Region that will, inter alia, facilitate the transparent implementation of IRAS and assist
the Commission and states in monitoring whether loads are, in fact adhering to the
Ratepayer Protection Pledge commitment to “build, bring, or buy the new generation
resources and electricity needed to satisfy their new energy demands” and “add[ing] more
capacity that serves the broader public by increasing supply” in order to protect “Americans
from higher prices.”79 PJM will use the registry to determine the quantity of New Large
77 Proposed RAA, Schedule 11, section B.1(d).
78 Proposed RAA, Schedule 11, section B.1(e).
79 Ratepayer Protection Pledge; Ratepayer Protection Pledge Announcement; see also Fact Sheet: President
Donald J. Trump Advances Energy Affordability with the Ratepayer Protection Pledge, The White House
(Mar. 4, 2026), https://www.whitehouse.gov/fact-sheets/2026/03/fact-sheet-president-donald-j-trump-
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Honorable Debbie-Anne A. Reese
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Loads by zone/area and allocate IRAS responsibility to each zone/area accordingly,
starting with the 2027/2028 Delivery Year. States may leverage the Large Load Registry
to inform the implementation of retail constructs including load reduction priorities and
cost allocation at the retail level to appropriate end-use customers. The Large Load
Registry will assist states in administering their respective programs at the retail level while
allowing each state to retain the flexibility to administer those programs, including the
flexibility to determine when and whether Large Loads and Existing Large Loads have
demonstrated that their loads are matched with new capacity that they have procured to
serve their needs. PJM also anticipates that the proposed Large Load Registry may also
support recent efforts by NERC to “aggressively work[] toward revised registry criteria
and standards”80 in accordance with the Commission’s recent order, pursuant to section
215(d)(5) of the FPA,81 directing NERC to “develop changes to NERC’s Rules of
Procedure, including registry criteria, necessary for the registration of computational load
entities.”82
advances-energy-affordability-with-the-ratepayer-protection-pledge/ [https://perma.cc/N366-NGF4] (listing
the companies who joined the Ratepayer Protection Pledge).
80 Large Loads Action Plan: Understanding and addressing the reliability risks of emerging large loads,
North American Electric Reliability Corporation, https://www.nerc.com/initiatives/large-loads-action-plan
[https://perma.cc/87WF-F4LV] (last visited Aug. 13, 2026);
81 16 U.S.C. § 824o(d)(5).
82Reliability Standard(s) Pertaining to Computational Load Integration, 196 FERC ¶ 61,031, at P 10 (2026).
NERC has announced that it will be issuing its second draft of the registry criteria for public review on
August 19, 2026. NERC, (@NERC_Official), X (Aug. 5, 2026, at 4:34 PM), https://x.com/NERC_Official
/status/2085102044054953996 [https://perma.cc/4EWU-2E83].
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Honorable Debbie-Anne A. Reese
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1.
Overwhelming support from PJM stakeholders for a New Large
Load Registry to be established and maintained by PJM
PJM’s proposal to establish a Large Load Registry received overwhelming support
from PJM stakeholders. Indeed, in response to a poll of stakeholders posted on July 16,
2026, 82% of the 66 stakeholder respondents agreed that a Large Load registration
requirement is necessary to “ensur[e] that costs of new capacity required to serve new large
load should be allocated to data centers.”83 Furthermore, seven of the 10 proposals put
forward by PJM’s stakeholders similarly include a Large Load Registry.84 In addition, in
response to the July 16, 2026 poll of stakeholders, at least seven stakeholder respondents
noted that the Large Load Registry is likely to provide the necessary transparency to
identify Large Loads while supporting the overall success of the IRAS framework.85 One
stakeholder respondent noted that “[a] registry provides the transparency needed to identify
new large loads, their locations, and whether they have secured qualifying BYONC or other
83 CIFP - RBP/Connect & Manage Poll Results at 4.
84 See Connection and Manage Senior Task Force, Implementation of Connect and Manage Framework for
Large Load Interconnections Package/Proposal Matrix, PJM Interconnection, L.L.C., Sheet 6 (3. Package
Matrix)
(June
30,
2026),
https://www.pjm.com/-/media/DotCom/committees-groups/cifp-
rbp/2026/20260630/20260630-cifp---connect-and-manage---options-and-packages-matrix.xls
[https://perma.cc/59X5-P7WG] (The following stakeholder proposals also included the concept of a Large
Load Registry: (1) Joint Electric Distribution Companies (Joint EDCs); (2) Glatz-Silverman; (3) Calibrant;
(4) Joint Consumer Advocates; (5) Natural Resources Defense Council (NRDC); (6) E-Cubed Policy
Associates; and (7) Voltus.).
85 CIFP - RBP/Connect & Manage Poll Results at 33 (Stakeholder respondents noted that “[a] registry is
necessary for both the Reliability Backstop Procurement and for the Connect & Manage framework to ensure
costs and curtailments are assigned appropriately. Consistent with the Statement of Principles, a registry will
ensure that new Large Load customers (cost causers), through the LSEs that serve them, are appropriately
assigned the cost of capacity procured through the Reliability Backstop Procurement (RBP) mechanism.
Absent a registry, it is unclear how other end-use consumers could be insulated from these costs. . . .
Additionally, it is unclear how, absent a registry, a Connect & Manage framework could be implemented in
a way that protects other end-use consumers from being curtailed in response to a PJM Connect & Manage
event.”).
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Honorable Debbie-Anne A. Reese
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reliability arrangements.”86 Another noted that “[a] registry is one means of satisfy[ing]
the principle of ensuring that costs of new capacity required to serve new large load (i.e.,
data centers) should be allocated to data centers.”87 Overall, there was broad support across
the stakeholder sectors for a registry registration requirement.88
2.
The proposed definition of Large Load is just and reasonable
PJM’s proposed Large Load Registry, which will provide the critical data
transparency needed to establish load reduction priorities for retail customers through
IRAS, begins with a definition of Large Load. PJM proposes to define Large Load as
“end-use customer(s) load that has a cumulative peak load of 50 megawatts or greater at a
single electrical site behind one or more points of interconnection, where for configurations
involving multiple affiliated load facilities or multiple points of interconnection with
affiliated load facilities behind them, all affiliated load facilities within a one-mile radius
will be considered a single electrical site as further described in the PJM Manuals.”89
PJM’s proposed definition of Large Load is in line with the Commission’s June
2026 Order to Show Cause regarding Large Loads, wherein the Commission expressly
found that “PJM’s Tariff appears to be unjust and unreasonable because it lacks a definition
of large load, as a new category of load.”90 More specifically, the Commission held that
86 CIFP - RBP/Connect & Manage Poll Results at 32.
87 CIFP - RBP/Connect & Manage Poll Results at 32.
88 CIFP - RBP/Connect & Manage Poll Results at 5-6 (Of the 82% of stakeholder respondents that agreed
that a large load registration requirement is necessary to ensure that costs of new capacity required to serve
new load should be allocated to data centers, 18 were Electric Distributors, 16 were End-Use Customers,
6 were Generation Owners, 7 were Other Suppliers, and 7 were Transmission Owners).
89 Proposed RAA, Definitions – Large Load.
90 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 58.
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“an appropriate definition, including a load size and interconnection voltage threshold,
should be based on the characteristics of PJM’s transmission system.”91 The Commission
thus requested that PJM “explain whether the Tariff remains just and reasonable without
such a definition, or propose Tariff revisions establishing its own definition of large
load.”92
The Commission, in its June 2026 Order to Show Cause, preliminarily found that,
based on the record in the DOE ANOPR proceeding, “it appears that it would be reasonable
to define a large load as a new, commercial or industrial customer, located at a single site
behind one or more points of interconnection, and that has a peak load of 50 MW or greater,
interconnects to the transmission system at a voltage level of greater than 69 [kilovolts
(“kV”)], and is not part of a co-location arrangement.”93 However, while the Commission
stated that its proposed definition “appears . . . [to] be reasonable,” the Commission
furthermore acknowledged that PJM may establish “its own definition of large load.”94
PJM proposes to define Large Load in terms that are substantially similar to the
Commission’s preliminary proposal. Specifically, like the Commission’s preliminary
definition, PJM is proposing that Large Load, as defined in the Tariff: (1) has a peak load
of 50 MW or greater; (2) be located at a single site; and (3) be behind one or more points
of interconnection. Nevertheless, PJM’s proposed definition of Large Load differs from
91 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 58.
92 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 58.
93 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 58.
94 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 58.
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the Commission’s in several ways to reflect the characteristics and realities of Large Loads
in the PJM Region.
First, the 50 MW or greater threshold, as proposed by PJM, is a cumulative peak
load of 50 MW. During the stakeholder process, PJM was informed that a single entity
that is an end-use customer in PJM may actually consist of a number of smaller loads with
a cumulative have a peak load of 50 MW or greater. Thus, to capture the smaller loads of
a single entity—e.g., disparate, closely located data centers owned by a single company—
and to avoid any gamesmanship from splitting up a Large Load into smaller loads, but all
within the same area, PJM is proposing that the cumulative peak load be equal to or greater
than a 50 MW threshold.
Second, Large Load is located at a single electrical site behind one or more points
of interconnection within a one-mile radius. The one-mile radius requirement is intended
to avoid a scenario where, for example, a data center owner is not categorized as Large
Load simply because the owner has elected to site a number of smaller data centers, each
with peak loads below 50 MW, close together.95 The Commission has explicitly adopted
a one-mile test in other situations to determine whether facilities are “at the same site” to
be a Qualifying Facility There, the Commission has set and applied an irrebuttable
presumption that they are a single facility at a single site when the distance between
95 Qualifying Facility Rates and Requirements Implementation Issues Under the Public Utility Regulatory
Policies Act of 1978, Order No. 872, 172 FERC ¶ 61,041 (revising one-mile rule for small power production
facilities seeking Qualifying Facility status as an analog), order on reh’g & clarifying in part, Order No.
872-A, 173 FERC ¶ 61,158 (2020).
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equipment at two facilities is one mile or less.96 Adoption of a similar criterion for
determining Large Loads is also just and reasonable.
Similarly, the reference to a single “electrical” site is similarly intended to avoid a
scenario where data centers and other Large Loads avoid the 50 MW threshold by
configuring themselves into smaller loads. Data centers and other Large Loads that are
physically located together or act as a single facility are a single “electrical” site. In the
same vein, companies may site many affiliated facilities in the same general areas but could
site them in a manner that could allow the facilities to individually avoid falling within a
definition of Large Load. Therefore, PJM is proposing to extrapolate in the definition that
there are many different configurations that may constitute a single electrical site,
particularly where there are multiple facilities that are affiliated in the same general area.
These criteria are logical and helpful for purposes of defining Large Load and minimizing
risks of gamesmanship.
Given the multitude of possible configurations and the other possible variations,
PJM intends to detail in the PJM Manuals the method of calculating the one-mile distance
and for examining different configurations to determine whether they may constitute a
single electrical site. Such implementation details are needed, and explicitly called for in
the proposed definition of Large Load.
Third, Large Load, as proposed by PJM, is defined as “end-use customer(s) load”
rather than the Commission’s proposed “new, commercial or industrial customer.” PJM
proposes to define Large Load to refer specifically to the MW quantity of the demand
96 Order No. 872, 172 FERC ¶ 61,041 at PP 17, 62, 466; see 18 C.F.R. § 292.204(a)(2).
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created by the customer rather than the customer itself. In other words, as reflected below,
during emergency conditions IRAS will not be used in real-time operations to require the
reduction of specific end-use customers but, rather, will be focused on directing that a
certain MW quantity be reduced by the Electric Distributor in order to maintain system
reliability in the face of resource adequacy challenges. PJM is also proposing that Large
Load encompass all end-use customer(s) load that meet the other requirements, thus
avoiding singling out commercial or industrial customers specifically. That said, PJM does
not contemplate that residential customers or smaller industrial customers would have peak
loads anywhere near 50 MW, which represents, roughly, the electricity consumption of
between 25,000 and 50,000 homes.97
Fourth, PJM’s proposed definition of Large Load also excludes several provisions
reflected in the Commission’s definition. Namely, PJM is not proposing that Large Load
be limited to connecting to the system at a voltage of 69 kV or greater, is not excluding
co-location arrangements from the definition, and is not limiting the definition to new load.
PJM understands that other regions have identified a need for specifying a voltage criterion
in a Large Load definition because “different-size loads may have different impacts on the
transmission system depending on the voltage level at which they interconnect,” the
prevalence of 69 kV transmission lines on their system, and the existence of transmission
that is less than 69 kV.98 While PJM’s transmission system has some transmission that is
97 PJM is not using the Tariff defined term, “End-Use Customer,” as not all relevant customers may
necessarily fit under that term. End-Use Customer, as defined in the RAA, “shall mean a Member that is a
retail end-user of electricity within the PJM Region.” RAA, Article 1, Definitions (defining End-Use
Customer). For purposes of this proposal, not all relevant customers of LSEs may be Members of PJM.
98 See Sw. Power Pool, 194 FERC ¶ 61,031 at P 61.
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less than 69 kV in certain zones, to date, PJM’s processes and stakeholder engagement
have not identified any need to draw a distinction between Large Loads connecting at
different voltage levels given the specific purpose of IRAS as outlined herein. As such,
PJM’s proposed definition does not include the Large Load connecting to the system “at a
voltage level of greater than 69 kV” criterion. PJM is also not proposing that the definition
of Large Load exclude load that is “part of a co-location arrangement.” Rather, PJM’s
proposed definition of Large Load is focused on the MW quantity threshold of load located
close in distance at a single electrical site. Rather than entirely excluding such load from
the definition of Large Load by virtue of its co-location with generation, PJM has proposed
rules that specifically address situations in which Large Load is co-located with their own
generation. Also, Large Load, as defined, is not limited to “new” load. Instead, PJM is
proposing a separate definition, “New Large Load,” to capture the temporal aspect of such
load with greater specificity. In addition, PJM is proposing to define those New Large
Loads that are eligible to provide IRAS as Eligible New Large Load. The definitions of
New Large Load and Eligible New Large Load are described below in Parts II.B.3.a and
II.C.6, respectively.99
3.
Information reported in the Large Load Registry
PJM is proposing that LSEs submit information to PJM about the Large Loads they
serve,100 and also that PJM may obtain information, as needed, from the Electric
99 While PJM is proposing a just and reasonable definition of Large Load, as part of the ongoing NERC and
large load show cause response efforts, PJM will continue to engage with the industry and stakeholders to
consider operational impacts and requirements necessary to address situations where multiple unaffiliated
loads aggregate up to or in excess of 50 MW in relatively close proximity to each other.
100 Proposed RAA, Schedule 11, section B.1(a).
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Distributors whose zone(s)/area(s) the LSEs are located and the Transmission Owner.101
Furthermore, PJM may also consult with the Large Load.102
The Large Load Registry will contain the following information about each Large
Load in the PJM Region:
• Eligible Customer/Network Customer for Large Load;
• Description of Large Load;
• Location(s) (Control Zone, Electric Distributor zone/area, where a
zone/area is an area within a Zone for which the relevant Electric
Distributor specifies a separate Obligation Peak Load MW value. A
zone/area is a service area of an Electric Distributor that is a separately
identifiable, geographic area bounded by wholesale metering);
• In-service date for each increment of load;
• Peak shaving adjustment value pursuant to a state program codified in
state law and whether and how it meets the requirements of Tariff,
Attachment DD-2;
• Delivery point / Point(s) of interconnection (include all if more than
one);
• Peak load quantity (MW) and ramp schedule, if applicable;
• Telemetry specifications;
• BYONC quantity (MW) and ramp schedule, if applicable;
• Allocated RBP UCAP MW quantity (MW), if applicable;
• Backup generation (MW), including fuel type and relevant permitting
limitations;
• Contracts or service agreements between the Large Load and the LSE;
• Points of contact at the applicable Transmission Owner, Electric
Distributor, and Load Serving Entity;
• EMS B1/B2/B3 name (for the applicable Transmission Owner, Electric
Distributor); and
• Additional details and contents as necessary, in accordance with the
PJM Manuals.103
Each piece of information is a necessary component to the Large Load Registry and
provides key information to PJM, as well as Authorized Commissions, Transmission
101 Proposed RAA, Schedule 11, section B.1(b).
102 Proposed RAA, Schedule 11, section B.1(c).
103 Proposed RAA, Schedule 11, section B.1(a).
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Owners, Electric Distributors, LSEs, the Market Monitoring Unit, and the Commission,
subject to data protection safeguards pursuant to the Operating Agreement, section 18.17,
as discussed below in Part II.B.3.d. The information in the Large Load Registry will be
used, as needed, for purposes that include implementation of IRAS, effective starting with
the 2027/2028 Delivery Year.104 Below, PJM describes how the information required to
be reported in the Large Load Registry will support IRAS and allow PJM to determine the
MW value of load that is required to be made available for IRAS in each Electric
Distributor zone/area.
a.
Information in the Large Load Registry will help PJM
distinguish Large Loads from New Large Loads and identify
New Large Loads eligible for IRAS.
The information submitted to or obtained by PJM for inclusion in the registry will
allow PJM to distinguish Large Loads from New Large Loads. As noted above, PJM’s
proposed definition of Large Loads, unlike the Commission’s, does not require that the
Large Load is new. Rather, PJM is proposing a separate definition of New Large Load,
which will mean “an end-use customer load that is either (a) a Large Load that goes into
service after June 1, 2027, or (b) incremental load in-service after June 1, 2027, that
increases the existing end-use customer load at a single electrical site that, prior to such
incremental load, did not previously meet the definition of Large Load.”105
The in-service date for the Large Load, including each increment of Large Load
coming online, is a critical piece of information, because only New Large Load may be
104 Proposed RAA, Schedule 11, section B.3.
105 Proposed Tariff, Definitions – New Large Load.
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designated “Eligible New Large Load”—i.e., New Large Load that is eligible to provide
IRAS. The reason for this is straightforward. Namely, IRAS applies in Delivery Years
when the amount of Capacity Resources committed falls short of the PJM Region
Reliability Requirement.106 As described below in Part II.C.7, such a shortfall arises when
new load comes onto the PJM system without bringing their own capacity. IRAS, as
proposed, is a service that specifically allows for Large Loads to interconnect without
bringing their own capacity, on the condition that “they must reduce their load or switch to
on-site backup resources under specific, limited” emergency conditions.107 Furthermore,
in recent years, the majority of the new load that has come onto the PJM system has been
Large Load.108 PJM is therefore limiting the MW quantity of Large Load that may be
subject to reduction pursuant to IRAS to the MW value of New Large Load that has not
brought their own capacity.
At the beginning of IRAS, New Large Load will be Large Load that is in-service
after June 1, 2027.109 In subsequent years, the relevant in-service date for a Large Load to
qualify as New Large Load will fluctuate based on whether or not IRAS is needed in the
manner set forth below. Thus, the in-service date will continue to be relevant to IRAS in
future years. More specifically, pursuant to PJM’s proposed definition of New Large Load,
106 Proposed Tariff, Attachment DD-4, sections IV(b)(i)-(ii).
107 CIFP Framework for Service at 1.
108 August 2025 Board Letter at 1 (“Recent increases in large load additions, mainly from data centers, present
both opportunities and challenges for the regional grid. PJM's location, size, market opportunities and system
reliability make it an attractive area for large load customers to locate, and we continue to see significant load
interconnection activity at several of our utilities. Indeed, PJM’s 2025 long-term load forecast shows a peak
load growth of 32 GW from 2024 to 2030. Of this, approximately 30 GW is projected to be from data
centers.”).
109 Proposed Tariff, Definitions – New Large Load.
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“to the extent three consecutive Delivery Years meet the requirements of Tariff,
Attachment DD-4, section IV(b)(iii), then New Large Load shall mean end-use customer
load that is either (a) a Large Load that goes into service after June 1 of the first Delivery
Year for which the requirements of Tariff, Attachment DD-4, section IV(b)(iii) are not met
or (b) incremental load in-service after June 1 of the first Delivery Year for which the
requirements of Tariff, Attachment DD-4, section IV(b)(iii) are not met that increases the
existing end-use customer load at a single electrical site that, prior to such incremental load,
did not previously meet the definition of Large Load.”110
b.
Information in the Large Load Registry will assist in
identifying Eligible New Large Loads that may be called on
to reduce their load or switch to on-site back-up resources
pursuant to IRAS.
In a Delivery Year where IRAS applies, the MW subject to IRAS that PJM will
allocate to an Electric Distributor zone/area will be limited to the MW quantity of New
Large Loads in that zone/area without arrangements for BYONC or RBP UCAP MW
allocated to them. PJM is therefore proposing that the Large Load Registry include
information needed to distinguish between New Large Load with and without
arrangements for capacity including, for example, the BYONC quantity and schedule for
incremental build out of the New Large Load’s energy demands (i.e., ramp schedule), and
the quantity of Allocated RBP UCAP MW associated with each Large Load. Information
in the registry will assist PJM in determining the quantity of New Large Loads by zone/area
that did not BYONC (or have RBP UCAP MW) and allocate an appropriate MW value of
110 Proposed Tariff, Definitions – New Large Load.
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IRAS responsibility to each zone/area starting with the 2027/2028 Delivery Year. Using
the registry information, and subject to real-time needs of the system, New Large Loads
that have not arranged for BYONC or been assigned Allocated RBP UCAP MW may, in
accordance with arrangements involving the Electric Distributor and relevant state
authorities, be subject to load reduction prior to the MW quantity associated with other,
in-service New Large Loads that have arrangements with BYONC and/or Allocated RBP
UCAP MW in the registry.
c.
Information in the Large Load Registry will assist PJM
operators in determining how best to support reliability
during periods of insufficient capacity.
Much of the information that PJM is proposing to require in the Large Load
Registry is needed by the Electric Distributor and state authorities to make decisions that
will, in turn, also inform determinations by PJM operators about how best to manage the
system and avoid a Manual Load Dump Action.111 For example, the peak load MW value
associated with a Large Load in a particular Electric Distributor zone/area will help inform
PJM operators of the potential capacity needs in that particular zone/area. The peak
shaving adjustment value pursuant to a state program codified in state law and meeting the
requirements of Tariff, Attachment DD-2 will inform PJM operators of Large Loads that
are managing their resource needs through peak shaving adjustments under a state program.
111 Systems Operations Division, PJM Manual 13: Emergency Operations, PJM Interconnection, L.L.C.,
section 2.3.2 (rev. 98, June 24, 2026), https://www.pjm.com/-/media/DotCom/documents/manuals/m13.pdf
[https://perma.cc/HE9Y-BNQK] (“PJM Manual 13”) (defining a Manual Load Dump Action as “an
Operating Instruction from PJM to shed firm load when the PJM RTO cannot provide adequate capacity to
meet the PJM RTO’s load and tie schedules, or critically overloaded transmission lines or equipment cannot
be relieved in any other way”).
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The locations, including the service zone/area of an Electric Distributor, of each Large
Load will assist PJM operators in managing capacity needs across the PJM Region.
Furthermore, as noted above, PJM is not excluding co-located load or load with
backup generation from the definitions of Large Load and New Large Load. To the extent
that Large Load is co-located or has backup generation, PJM is proposing that this be
identified in the Large Load Registry.
d.
Confidentiality
pursuant
to
Operating
Agreement,
section 18.17
PJM is proposing to maintain the confidentiality of the information in the Large
Load Registry “[t]o the extent such documents, data, or other information provided to the
Office of the Interconnection has been designated as confidential by a Party, Electric
Distributor, or other entity supplying the information,” pursuant PJM’s existing
confidentiality obligations under Operating Agreement, section 18.17.112 Furthermore,
subject to the appropriate data protection safeguards required by Operating Agreement,
section 18.17, information maintained in the Large Load Registry may be available to
Authorized Commissions, Transmission Owners, Electric Distributors, LSEs, the Market
Monitoring Unit, the Commission.113
In addition, to aid transparency to the public, PJM will post aggregated data from
the Large Load Registry, which will be aggregated by Electric Distributor zone/area, where
possible and in a manner consistent with existing confidentiality protections. Aggregating
the data by zone/area supports transparency by putting stakeholders on notice of the
112 Proposed RAA, Schedule 11, section B.1(d).
113 Proposed RAA, Schedule 11, section B.1(d).
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zones/areas that have been assigned IRAS in a given Delivery Year, that may be potentially
required to reduce load under certain emergency conditions pursuant to IRAS, while
maintaining the confidentiality of the data.
Furthermore, PJM intends to develop provisions in its Manuals to implement the
Large Load Registry, as needed, including details about who may access the information
and specific safeguards in place to maintain the confidentiality of certain data. PJM
intends, for example, to propose revisions to its Manuals that would permit Electric
Distributors to access their specific information in the registry. PJM anticipates that each
Large Load will have a specific randomized identifier in the registry, and that Electric
Distributors will inform customers who have been included in the Large Load Registry and
each customer’s Large Load identifier. To link Large Load to a BYONC resource, a
Capacity Market Seller may input the relevant BYONC resource into their account and
associate it with the Large Load identifier. By relying on randomized identifiers, PJM
effectively allows for some transparency while also maintaining confidentiality of Large
Loads with BYONC.
e.
Reliance on Large Load Registry must reflect accurate and
complete information on which PJM may determine a
baseline.
PJM will review the information provided and coordinate with the applicable
Transmission Owner and Electric Distributor to check the validity of the information
provided, request additional information if needed, and consult with the Large Load.114
The information provided in the Large Load Registry will form the foundation for an
114 Proposed RAA, Schedule 11, section B.1(c).
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accurate, complete, and reliable database that will inform, inter alia, decisions about the
MW quantity of New Large Loads that is available to provide IRAS in a Delivery Year.
PJM is aware that false or misleading statements about, for example, Peak Load
Contributions could give rise to inaccurate baselines on which PJM would rely in the
course of determining Eligible New Large Load Amounts, i.e., the MW value of load that
an Eligible New Large Load in a given zone/area may be required to be made available for
IRAS.115
The longstanding provisions against intentionally false statements or omissions of
material fact extend to the reporting of information to the Large Load Registry.
Specifically, pursuant to FPA section 222116 and 18 C.F.R. § 1c.2, “it shall be unlawful for
any entity, directly or indirectly, in connection with the purchase or sale of electric energy
or the purchase or sale of transmission services subject to the jurisdiction of the
Commission, . . . [t]o make any untrue statement of a material fact or to omit to state a
material fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading.”117 Furthermore, to the extent
that Electric Distributors, LSEs, and Large Loads are “Sellers,”118 they are required,
pursuant to the Commission’s Rules and Regulations, to “provide accurate and factual
115 Indeed, falsifying or artificially lowering Peak Load Contributions for purposes of increasing profits for
the provision of demand response has given rise to significant scrutiny by the Commission’s enforcement
office. See Lincoln Paper & Tissue, LLC, 140 FERC ¶ 61,031 (2012); Competitive Energy Servs. LLC, 144
FERC ¶ 61,163 (2013).
116 16 U.S.C. § 824v.
117 18 C.F.R. §§ 1c.1(a), 1c.2(a); 16 U.S.C. § 824v.
118 A “Seller” is “any person that has authorization to or seeks authorization to engage in sales for resale of
electric energy, capacity or ancillary services at market-based rates under section 205 of the Federal Power
Act.” 18 C.F.R. § 35.36(a)(1).
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information and not submit false or misleading information, or omit material information,
in any communication with the Commission,” as well as with PJM, “unless Seller exercises
due diligence to prevent such occurrences.”119
False or misleading statements or material omissions may give rise to a referral to
the Commission’s Office of Enforcement and Regulatory Accounting. Violators, including
individuals, of the duty of candor and the prohibition against false or misleading statements
may be subject to significant penalties, including civil penalties of over $1.5 million per
violation per day.120 The authority of PJM to validate the information submitted into the
database and consult with the Large Load supports PJM’s efforts to make the Large Load
Registry an accurate and reliable dataset. Furthermore, the underlying prohibition against
false or misleading statements or material omissions provides PJM with reasonable
confidence that the information provided will be a reliable basis for establishing a baseline
for purposes of IRAS.
4.
PJM’s exercise of authority to require information from LSEs and
Electric Distributors, and to obtain information from Large Loads
and other entities
PJM is proposing to require that the information used to develop and maintain a
Large Load Registry be “submit[ted] or cause to be submitted” to PJM by LSEs, pursuant
to proposed RAA, Schedule 11, section B.1(a).121 In addition, PJM proposes to obtain
information from Electric Distributors,122 to coordinate with applicable Transmission
119 18 C.F.R. § 35.41(b).
120 Civil Monetary Penalty Inflation Adjustments, Order No. 906, 190 FERC ¶ 61,006 (2025).
121 Proposed RAA, Schedule 11, section B.1(a).
122 Proposed RAA, Schedule 11, section B.1(b).
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Owners and Electric Distributors, as needed, to validate the information provided in the
Large Load Registry, and/or to consult with relevant Large Loads.123
The data PJM is requesting for the Large Load Registry in this proposal builds upon
PJM’s existing authority and Commission precedent. Authority exists today in the
Operating Agreement to require Electric Distributors to provide to PJM “all System,
accounting, customer tracking, load forecasting (including all load to be served from its
System) and other data necessary or appropriate to implement or administer [the Operating
Agreement], and the Reliability Assurance Agreement[.]”124 The Commission has also
previously accepted proposals by PJM to require and obtain information from jurisdictional
entities such as Electric Distributors and LSEs. For example, in 2024, the Commission
accepted PJM’s proposed revisions to the RAA to incorporate, into its forecast, Load
Adjustments, which would be reported by Electric Distributors and/or their LSEs.125
Furthermore, PJM’s information-gathering authority is wide, and the Commission
has permitted PJM to seek information from non-jurisdictional entities such as retail
customers to the extent that the information is relevant to Commission-jurisdictional
services and rates.126 Indeed, an analogous practice can be found in longstanding
123 Proposed RAA, Schedule 11, section B.1(c).
124 Operating Agreement, section 11.3.3(h).
125 PJM Interconnection, L.L.C., 188 FERC ¶ 61,200, at P 40 & n.65 (2024) (finding that an “Electric
Distributor is the party with the distribution and metering facilities defining a zone/area and responsible for
reporting load information to PJM[,]” and also noting that, “‘under the current framework, each LSE already
reports their peak load contribution to the Electric Distributor, which is the entity ultimately responsible for
reporting that information to PJM.’” (quoting PJM Interconnection, L.L.C., Response to Deficiency Letter,
Request for Commission Action by September 23, 2024, Request for Waiver of the 60-Day Notice
Requirement, and Request for a Shortened Seven Business Day Comment Period, Docket No.
ER24-2447-001, at 9-10 (Aug. 9, 2024))).
126 FERC v. Elec. Power Supply Ass’n, 577 U.S. 260, 278-79 (2016) (“EPSA”); FPA section 201(b), 16 U.S.C.
§ 824(b).
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requirements applicable to Demand Resources, as set forth in Order No. 719-A.127 In that
order, the Commission prohibited PJM and other RTOs/Independent System Operators
(“ISO”) from accepting bids from Curtailment Service Providers that aggregated demand
response of customers of utilities distributing below a MW per hour threshold unless
otherwise permitted by an appropriate retail authority.128 To comply with Order No.
719-A, the Commission required that PJM and other RTOs/ISOs review evidence and
information concerning end-use customer participation in load response programs. In
PJM’s case, PJM explained that, “when an LSE or Electric Distribution Company does not
present evidence that the Retail Authority permits or conditionally permits demand
response activity, the registration will not be processed until evidence of Retail Authority
authorization for the resource’s participation in PJM’s load response programs is provided
to PJM within the established deadlines.”129
Furthermore, PJM’s authority to obtain “data and details concerning large load
additions” finds support in the Commission’s June 2026 Order to Show Cause, which
expressly required PJM and the PJM Transmission Owners to post and regularly update
data and details concerning large load additions.130
127 Wholesale Competition in Regions with Organized Electric Markets, Order No. 719-A, 128 FERC
¶ 61,059, order on clarification, Order No. 719-B, 129 FERC ¶ 61,252 (2009).
128 Order No. 719-A, 128 FERC ¶ 61,059 at P 60; PJM Interconnection, L.L.C., 135 FERC ¶ 61,211, at P 3
(2011).
129 PJM Interconnection, 135 FERC ¶ 61,211 at P 3 (citing PJM Interconnection, L.L.C., Request for Limited
Tariff Waiver, and Request for Fast Track Processing of PJM Interconnection, L.L.C., Docket No.
ER11-3386-000, at 4-5 (Apr. 19, 2011)).
130 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 74.
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In fact, the Commission found, therein, that PJM’s Tariff appeared to be unjust and
unreasonable because it lacked, inter alia, “provisions that would require PJM and the
Transmission Owners to publicly post and regularly update data that details: (1) the
aggregate amounts of proposed large load additions in PJM’s footprint, including the
aggregate amounts in each transmission pricing zone.”131 In particular, the Commission
expressed concern that “without sufficient transparency . . . stakeholders may lack
information and visibility regarding the costs driven by large load additions.”132 Likewise,
the Large Load Registry provides transparency to PJM, states, the Independent Market
Monitor for PJM, and other entities with the ability to obtain such information and—
through aggregated data posted on PJM’s website—transparency to stakeholders,
regarding the zones/areas with the greatest concentrations of Large Loads that may be
eligible to provide IRAS during a particular Delivery Year. As such, PJM’s proposal to
gather the data, materials, and other inputs into the Large Load Registry is in line with the
Commission’s overall interest in supporting transparency with respect to information about
Large Loads.
131 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 76.
132 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 74.
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C.
New Large Loads Can Avoid Being Subject to Interim Resource
Adequacy Service by Bringing New Capacity to Offset Their Capacity
Needs. This Is Consistent with the Ratepayer Protection Pledge and Is a
Just and Reasonable Condition to Maintaining System Reliability.
1.
Requirement for New Large Loads to bring capacity or be subject
to load reductions
To make clear an LSE’s obligations associated with bringing a New Large Load to
the transmission system, PJM is proposing a new section 7.8 to the RAA. Article 7 of the
RAA is for detailing LSEs Reserve Requirements and Obligations, and PJM proposes to
expand those obligations, effective June 1, 2027, to include a requirement that the LSE
serving each New Large Load “designate one or more Generation Capacity Resources or
Capacity Storage Resources that had not cleared an RPM Auction as Network Resource(s)
in a cumulative amount that equals or exceeds the LSE’s New Large Load’s peak load (in
MW) as reported in the Large Load Registry pursuant to RAA, Schedule 11.”133 To the
extent, the LSE does not designate a sufficient amount of Network Resources, then “such
New Large Load may be subject to load reduction requests during Emergencies prior to
Pre-Emergency Load Management Response.”134 This provision of the proposed section,
while it includes the concepts that underlie the IRAS framework, is not dependent on
Commission acceptance of the IRAS rules in proposed Tariff, Attachment DD-4 to be
effective.
To tie this concept with the IRAS program, PJM further proposes a second sentence
that joins this provision with the IRAS program. Specifically, it provides that to the extent
133 Proposed RAA, section 7.8.
134 Proposed RAA, section 7.8.
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an LSE service a New Large Load has not “designated such Network Resource(s) as
BYONC with which it has entered into an arrangement in accordance with this requirement
and Tariff, Attachment DD-4,” the New Large Load will need to provide IRAS “subject to
the rates, terms, and conditions of Interim Resource Adequacy Service, as set forth in
Tariff, Attachment DD-4.”135 These IRAS rates, terms, and conditions are discussed in the
following sections of this transmittal letter.
2.
Bring Your Own New Capacity arrangements with New Large Load
To incentivize Large Loads to address the capacity shortfall caused by their rapid
growth, in both speed to interconnection and volume of capacity needed, PJM is proposing
to allow New Large Loads to remove themselves—in whole or in part—from the MW
eligible for IRAS where such loads bring new capacity to the PJM Region. As discussed
below, to ensure such capacity is in fact “new” and not simply existing generation capacity
that is repackaged, and to ensure the benefits of the new capacity are not ephemeral and
will not dissipate quickly, PJM is proposing for such new capacity certain gating criteria
and imposing capacity market participation requirements.
a.
PJM proposes to define BYONC as new megawatts of
Unforced Capacity.
Before turning to the gating criteria and market participation requirements, it is
important to understand what this new capacity is definitionally. First, PJM is calling this
new capacity “Bring Your Own New Capacity,” or “BYONC” for short, to convey that the
New Large Load should bear some responsibility for bringing this new capacity to
correspond with the addition of the New Large Load.
135 Proposed RAA, section 7.8.
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Second, at a basic level, BYONC is “megawatts of Unforced Capacity.”136 This is
consistent with how Capacity Resources under PJM’s capacity market design are also MW
and not the underlying physical resource that supports a Capacity Resource.137 RPM
Auctions clear MW of UCAP; that is the traded product. Thus, in the same vein, BYONC
is designed to offset the capacity need presented by the New Large Load. Further, as
discussed below, BYONC will also be Capacity Resources, but will be a subset of Capacity
Resources that have arrangements with New Large Loads, must meet the BYONC RPM
participation requirements discussed below, and also must meet all applicable requirements
for Capacity Resources.138
In addition, defining BYONC as simply MW provides significant flexibility in how
New Large Loads meet their capacity requirements and how resources can provide
BYONC to New Large Loads, and provide a more liquid marketplace for matching New
Large Loads with BYONC. For example, a New Large Load can enter into BYONC
arrangements with multiple qualifying resources to cover its peak load, and likewise, a
resource can provide MW for purposes of entering into BYONC arrangements with
multiple New Large Loads so long as these arrangements are clearly identified and
consistent with the Large Load Registry. Through this approach of commoditizing the
capacity attributes of a physical resource, the lumpiness inherent in matching New Large
136 See proposed Tariff, Definitions – Bring Your Own New Capacity.
137 See RAA, Article 1, Definitions (“‘Capacity Resources’ shall mean megawatts . . . .”); see also Energy
Harbor, LLC v. FERC, 143 F.4th 388, 394 (D.C. Cir. 2025) (“The [PJM] Tariff defines a Capacity Resource
as the amount of net megawatts committed from one or many generating units, not a physical facility.”
(citation omitted)).
138 See proposed Tariff, Attachment DD-4, section VI.
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Loads with physical resources is smoothed, allowing for a more efficient and timely means
of addressing the capacity shortfall otherwise caused by the addition of New Large Loads.
Third, the capacity must be “new.” Given that PJM is currently short of capacity
and looking to reestablish a healthy capacity reserve margin, PJM is proposing that any
capacity added to the system starting with the 2027/2028 BRA will qualify as new—subject
to the gating criteria discussed below, while capacity already on the system would not fall
within the definition of BYONC.
For the same reason, PJM is proposing that “[m]egawatts of Unforced Capacity that
have been previously included in an FRR Capacity Plan prior to the 2027/2028 Delivery
Year do not qualify as BYONC.”139 The capacity must be new to the PJM system, not just
new to the capacity market.140 As such, New Large Loads should only be exempted from
IRAS if it has arrangements with capacity not already on the system as of May 31, 2027,
the day before IRAS becomes available as a tool for PJM operators.
However, in the event the PJM Region has sufficient capacity to meet the PJM
Region Reliability Requirement for three consecutive Delivery Years, the IRAS rules will
not apply—no IRAS will be required, and BYONC will not be needed to address New
Large Loads’ capacity needs. In such circumstance, all existing BYONC would be relieved
of their BYONC market participation requirements and can be just regular Capacity
Resources.141 But, to the extent the PJM Region again falls short of securing sufficient
139 See proposed Tariff, Definitions – Bring Your Own New Capacity.
140 See proposed RAA, Schedule 8.1, section D 1.1 (“An FRR Entity may not include in its FRR Capacity
Plan any MW quantity of Existing Generation Capacity Resource in excess of what such FRR Entity owned
or contracted by such FRR Entity prior to June 1, 2027, to serve New Large Load.”).
141 See proposed Tariff, Attachment DD-4, section IV(b)(iii).
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capacity to meet the PJM Regional Reliability Requirement and the need for IRAS arises,
then the “new” capacity needed will no longer be measured against the capacity in the
system prior to the 2027/2028 Delivery Year. Rather, it will be measured against the
capacity supply existing at that time, such that BYONC would be any new capacity that
has “not cleared in an RPM Auction conducted for a Delivery Year prior to the first
Delivery Year” in which the PJM Region is short of capacity, while still meeting the gating
criteria.142
b.
PJM is proposing reasonable gating criteria designed to
stimulate development of new capacity.
Such new capacity may be supported by generation, storage, or demand-side
resources that meet certain gating criteria. The gating criteria are designed to ensure that
the capacity is “new” and not a repackaging of existing capacity or capability.
Thus, for generation and storage resources, PJM proposes that the BYONC must
be supported by: “(1) a new-build generation resource including new resources that obtain
Capacity Interconnection Rights [(“CIR”)] transferred from deactivated resources or
resources that have announced deactivation as of April 10, 2026; (2) the incremental
capacity created by an uprate of Existing Generation Capacity Resources, but only to the
extent such incremental capacity is created through an increase in such Generation
Capacity Resource’s installed capacity and increase in [CIRs] associated with that
Generation Capacity Resource; (3) the incremental capacity created by the utilization of
Surplus Interconnection Service; (4) repowering of a deactivated generation resource that
142 See proposed Tariff, Attachment DD-4, section VI(a)(ii).
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deactivated prior to April 10, 2026; or (5) incremental capacity, whether due to greater
Unforced Capacity or a higher level of [CIRs], created by an Existing Generation Capacity
Resource’s changing fuel type to a more efficient fuel type.”143 Each of these gating criteria
ensures that the BYONC will be capacity that was not on the transmission system or
otherwise available to meet the PJM Region’s needs as of June 1, 2027.
Because capacity may also be supplied by demand-side resources, PJM proposes
that BYONC may be supported by Planned Demand Resource or Planned Distributed
Energy Resources (“DER”) Capacity Aggregation Resources, as described in RAA,
Schedule 6 and Schedule 6.2. Such resources would need to be composed of registered
locations that did not previously support a capacity commitment or reduce the amount of
capacity needed to meet the PJM Region Reliability Requirement through a Peak Shaving
Adjustment or Price Responsive Demand for or prior to the 2026/2027 Delivery Year.144
Thus, just as for BYONC supported by generation and storage resources, demand-side
BYONC would need to be “new” starting June 1, 2027. However, this date would need to
be reset in the event the PJM Region has sufficient capacity to meet the PJM Region
Reliability Requirement for three consecutive Delivery Years—meaning the IRAS rules
would not apply and BYONC will not be needed—and then the PJM Region again falls
short of securing sufficient capacity to meet the PJM Regional Reliability Requirement.
As discussed, such capacity shortage would trigger the need for IRAS again. In such
circumstance, because the “new” capacity would need to be measured against the capacity
143 See proposed Tariff, Attachment DD-4, sections VI(b)(i)(1)-(5).
144 See proposed Tariff, Attachment DD-4, sections VI(b)(ii)(1)-(2).
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supply existing at that time, any demand-supported capacity would need to be “composed
of, or reliant on, any location registered in the Delivery Year prior to the first Delivery
Year” the PJM Region experienced the capacity shortage.145
3.
To ensure the capacity benefits of BYONC are real and lasting, PJM
is proposing certain RPM participation requirements.
For BYONC to address the capacity needs of New Large Loads, BYONC must be
Capacity Resources, with all attendant rights and obligations, and obtain capacity
commitments. PJM is proposing a number of RPM participation requirements designed to
obtain the maximum capacity benefit from the BYONC.
First, all BYONC must be Capacity Resources,146 and when committed through an
RPM Auction to provide capacity, the BYONC “will be subject to all capacity market rules,
as set forth in Tariff, Attachments DD and DD-1.”147 While these requirements may seem
obvious, they make clear to all entities the rules and obligations that accompany
arrangements between the UCAP of their resource and New Large Loads. Thus, if the
resource supporting BYONC fails to appear or is otherwise unavailable for a Delivery Year,
the seller will be subject to “all relevant deficiency charges under Tariff,
Attachment DD.”148
Second, to ensure that BYONC clear the auction and obtain a capacity commitment,
PJM proposes a general requirement that each BYONC must participate, as a price taker
(i.e., $0/MW offer) in RPM Auctions for 10 consecutive Delivery Years, starting with the
145 Proposed Tariff, Attachment DD-4, section VI(b)(ii)(1).
146 See proposed Tariff, Attachment DD-4, section VIII(a).
147 Proposed Tariff, Attachment DD-4, section VIII(c).
148 Proposed Tariff, Attachment DD-4, section VIII(d).
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first Delivery Year of the arrangement with New Large Load.149 As part of this 10-year
participation requirement, PJM is proposing that the BYONC would be subject to the
“capacity must-offer requirements and exceptions set forth in Tariff, Attachment DD,
sections 6.6 and 6.6A,” and that the BYONC would be prohibited from “seek[ing] an
exception to the capacity must-offer requirement to provide an external sale” during this
10-year period.150
The 10-year participation requirement for generation and storage resources,
including the no-external-sale rule, is just and reasonable. It is designed to ensure that this
BYONC is real and lasting. New capacity brought to address a New Large Load’s
significant capacity demands should not be allowed to sell its capacity attributes outside of
PJM. Such would undermine the purpose of BYONC, particularly given that New Large
Loads with BYONC arrangements are included in the demand curve. If the new capacity
was able to withdraw from serving as a PJM Capacity Resource, but the load continued to
be considered in the VRR Curve, then the New Large Load would no longer be the entity
responsible for procuring its capacity. Rather, that obligation would have been transferred
to PJM and shared with other PJM loads, contrary to the purpose of the IRAS scheme.
BYONC supported by a Demand Resource or DER Capacity Aggregation Resource
likewise has a 10-year commitment.151 However, the seller of the BYONC may replace its
149 See proposed Tariff, Attachment DD-4, section VIII(e).
150 Proposed Tariff, Attachment DD-4, section VIII(b).
151 See proposed Tariff, Attachment DD-4, section VIII(e) (“To the extent the resource is a Demand Resource
or DER Capacity Aggregation Resource, the BYONC shall participate in RPM Auctions for ten (10)
consecutive Delivery Years as an Annual Demand Resource or DER Capacity Aggregation Resource, as
applicable.”).
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BYONC obligation with a different BYONC subject to certain conditions. First, the initial
BYONC seller (i.e., the releasing BYONC) must report—or cause to be reported—the new
arrangement with the replacement BYONC in accordance with the reporting rules, and the
replacement BYONC seller will need to provide the certification attesting to the
arrangement. Second, the replacement BYONC must be for the remainder of the releasing
BYONC’s 10-year commitment. And, third, the releasing BYONC (and its supporting
registrations) may no longer provide BYONC going forward.152
This exception to the 10-year commitment for demand-supported BYONC is just
and reasonable, as it increases commercial opportunities for BYONC without adversely
affecting the region’s ability to address its capacity needs. PJM understands that this
exception provides New Large Loads a “bridge to power” of near-term demand-supported
capacity that is eventually replaced with new generation as that supply comes online. As
such, it increases opportunities for New Large Loads to spur the development of additional
capacity in a few years, while relying on existing (or their own) demand-side capacity
capability.
The requirement to offer BYONC MW as price takers ($0/MW) is both just and
reasonable. To realize the capacity benefits of a BYONC arrangement, the resource must
successfully clear an RPM Auction and secure a capacity commitment. The BYONC
arrangement itself serves as the commitment to provide this capacity. Because the resource
is already obligated to provide the capacity, its incremental, going-forward avoidable costs
152 See proposed Tariff, Attachment DD-4, section VIII(e).
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to secure the RPM commitment are zero. Offering as a price taker directly reflects this
zero-cost profile and guarantees the resource clears the auction.
This treatment also preserves market balance. Matching the inclusion of New
Large Loads in the VRR Curve (demand side) with the corresponding BYONC MW in the
supply stack at $0/MW creates a symmetrical, one-for-one addition. This structure
prevents artificial price shifts, resulting in an effectively price-neutral outcome for the rest
of the market. This mechanism is consistent with existing Commission-approved rules for
other resources retained for reliability purposes, which are also treated as price takers.153
Finally, however, BYONC RPM participation requirements are extinguished if
IRAS is not needed for three consecutive Delivery Years.154 This means that the BYONC
would no longer be required to offer as price takers for the remainder of their 10-year term.
Because they are Capacity Resources BYONC would still be subject to the capacity
must-offer requirement (to the extent they are not supported by Demand Resources or DER
Capacity Aggregation Resources). But, they would be free to meet the requirements for an
exception based on an external sale.
153 See, e.g., PJM Interconnection, L.L.C., 190 FERC ¶ 61,088, at P 50, reh’g denied, 192 FERC ¶ 61,135,
at PP 31-34 (2025); Indep. Power Producers of N.Y. v. N.Y. Indep. Sys. Operator, Inc., 150 FERC ¶ 61,214
(2015), order granting in part & denying in part clarification & reh’g, 170 FERC ¶ 61,118 (2020); N.Y.
Indep. Sys. Operator, Inc., 150 FERC ¶ 61,116 (2015), order on reh'g & compliance, 155 FERC ¶ 61,076
(2016), order on reh'g & compliance, 161 FERC ¶ 61,189 (2017), order on clarification & reh’g, 163 FERC
¶ 61,047 (2018); see also ISO New Eng. Inc., 165 FERC ¶ 61,202, at PP 82-88 (2018) (approving price taker
treatment for resource retained for fuel security purposes), order addressing arguments raised on reh’g, 173
FERC ¶ 61,204 (2020).
154 See proposed Tariff, Attachment DD-4, section VIII(f).
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4.
Reporting arrangements between BYONC and New Large Loads,
and obligatons on BYONC of an arrangement
The purpose of the BYONC construct is to incent New Large Loads to facilitate the
development of new capacity so that the PJM Region has sufficient capacity to maintain
reliability without entering into a capacity shortage and/or having to shed existing native
load customers. To do so, the New Large Loads need to be able to get credit for any
BYONC they facilitate.155 PJM proposes to give them credit by allowing New Large Loads
to report to PJM an arrangement the New Large Load enters into with BYONC, and such
arrangement will result in a reduction in the New Large Loads MW available to provide
Interim Resource Adequacy Service.
a.
The clear two-step process for PJM to recognize
arrangements between New Large Loads and BYONC
Obtaining recognition for arrangements between BYONC with a New Large Load
is a relatively basic process, with only two steps. One, an entity needs to report the
arrangement to PJM by identifying both the New Large Load and the BYONC. While PJM
expects the LSE serving the New Large Load or the applicable Electric Distributor to make
such report, the proposed rules contemplate that PJM “may also accept information to the
extent interconnection customers, Large Loads, Transmission Owners, or other entities
voluntarily report any BYONC that may be in an arrangement with a New Large Load.”156
Two, “the resource owner or entity with contractual authority to enter into a
BYONC arrangement must certify” to PJM that the BYONC has an arrangement with that
155 See proposed Tariff, Attachment DD-4, section V(c) (“For purposes of removing its eligibility to provide
Interim Resource Adequacy Service, a New Large Load may enter into arrangements with BYONC supported
by one or more resources.”).
156 Proposed Tariff, Attachment DD-4, section VII(a)(i).
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New Large Load and that the BYONC will follow the RPM participation requirements in
proposed Tariff, Attachment DD-4, section VIII.157 Both elements of this certification are
crucial. The BYONC representative attesting to the arrangement confirms the reported
arrangement in the other step, providing certainty that the New Large Load’s capacity needs
will be addressed (at least in part) through this BYONC. Certification that the BYONC is
aware of and intends to abide by the RPM participation requirements, which as discussed
above, include a 10-year must-offer at $0/MW, provides a level of certainty that the
BYONC will be real and lasting. Together, these certifications provide confidence that the
capacity needs of the New Large Load will be addressed (at least in part as discussed below
in Part II.C.6) by this BYONC, allowing PJM to include such loads in the demand curve
used to clear RPM Auctions.
b.
Arrangements must be reported to PJM in a timely manner
to allow for them to be reflected in the RPM Auctions,
because an arrangement will not be effective for Delivery
Years before the BYONC clears an RPM Auction.
Because New Large Loads in arrangements with BYONC will be included in the
VRR Curve used to clear RPM Auctions—and the BYONC in the arrangement will be
required to participate in RPM Auctions as price takers, it is important that any BYONC
arrangements expected to start in a future Delivery Year are timely reported to PJM to
allow such load to be reflected in the VRR Curve. Without timely reporting, the BYONC
could clear the auction without associated load being included in the demand curve, which
157 Proposed Tariff, Attachment DD-4, section VII(a)(ii).
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would artificially show more capacity available to serve the PJM Region generally than
would be appropriate.
To be clear, arrangements between New Large Loads and new resources need to be
reported prior to the first Delivery Year they will be in place. PJM will validate the
arrangement as discussed, and update the Large Load Registry to reflect any PJM-validated
arrangements between New Large Loads and BYONC. That is, PJM will validate the
BYONC to make sure it meets the BYONC rules and is capable of providing the level of
capacity, and to avoid duplicate arrangements between BYONC and New Large Loads,
and PJM will, as necessary, validate the data regarding the New Large Load with the
Electric Distributor that interconnected the Large Load for retail service.158
The above timing concerns are most present where the arrangement is known or
has otherwise been consummated. Thus, PJM proposes rules requiring timely reporting of
BYONC-New Large Load arrangements prior to the next RPM Auction for the first
Delivery Year of each arrangement.
i.
Reporting BYONC-New Large Load arrangements
for the 2027/2028 and 2028/2029 Delivery Years
For the 2027/2028 and 2028/2029 Delivery Years, because (1) the BRAs have
already run; (2) IRAS is not intended to commence until June 1, 2027; and (3) parties need
time to develop appropriate contractual arrangements, PJM proposes that, for an
arrangement to be considered in determining a New Large Load’s availability to provide
IRAS, as measured by its Eligible New Large Load Amount, any arrangement for these
158 Once an arrangement is reported to PJM, there are no ongoing reporting requirements for subsequent
Delivery Years.
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Delivery Years must be reported to PJM by April 1 before the first applicable Delivery
Year.159 Reporting arrangements between BYONC and New Large Loads by such date
will afford PJM sufficient time to review and validate, and then update the Large Load
Registry by April 15 before the Delivery Year.160 PJM will use such data to determine the
amount of IRAS available to PJM for the upcoming Delivery Year, and assign each Electric
Distributor the amount of IRAS available in their zone/area for the Delivery Year.
ii.
Reporting BYONC-New Large Load arrangements
for the 2029/2030 Delivery Year
The timing considerations for Delivery Year 2029/2030 are idiosyncratic given that
the BRA is scheduled to commence on December 9, 2026, i.e., within 60 days from the
requested effective date of this filing. Accordingly, PJM is proposing that any known
arrangements be reported to PJM “no later than by 50 days prior to the commencement of
the 2029/2030 Base Residual Auction,”161 so that PJM may adjust the VRR Curve for that
auction, as discussed below in Part II.F. In the event, an arrangement is entered into after
that deadline, in order for the “BYONC arrangement to be considered” for the 2029/2030
Delivery Year, and the New Large Load’s Interim Resource Adequacy Service availability
to be reduced, the arrangement must be reported “by 30 days prior to the posting of the
planning parameters for the Incremental Auctions arrangement with the 2029/2030
Delivery Year.”162
159 See proposed Tariff, Attachment DD-4, section VII(b).
160 See proposed Tariff, Attachment DD-4, section VII(b).
161 Proposed Tariff, Attachment DD-4, section VII(c).
162 Proposed Tariff, Attachment DD-4, section VII(c).
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iii.
Reporting BYONC-New Large Load arrangements
for the 2030/2031 Delivery Year and subsequent
Delivery Years
Starting with the 2030/2031 Delivery Year and for all future Delivery Years, for any
BYONC arrangement to be considered for a given Delivery Year, the arrangement must be
reported to PJM “no later than by 30 days prior to the posting of the planning parameters
for the relevant RPM Auction for the initial Delivery Year the BYONC enters into an
arrangement with the New Large Load.”163 Reporting associations 30 days before PJM
must post the planning parameters for an RPM Auction provides sufficient time for PJM
to validate the information provided and reflect such arrangement in the VRR Curve for
that auction. It also reasonably balances providing entities the maximum time possible to
agree on the arrangements.
c.
Rules for BYONC arrangements
PJM is also proposing certain rules around BYONC-New Large Load arrangements
to ensure no capacity is double counted and to facilitate efficient matchmaking between
New Large Loads and new capacity. As discussed above, BYONC is composed of MW,
not a physical resource. This allows for efficient sizing of BYONC to meet the exact
capacity needs of New Large Loads, and allows for liquidity in the market for matching
the two.
In this regard, PJM proposes that “[a] physical resource may support multiple
BYONC, each of which may be in an arrangement with different New Large Loads, as long
163 Proposed Tariff, Attachment DD-4, section VII(d).
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as no BYONC is in an arrangement with more than one New Large Load,”164 and that “[a]
New Large Load may enter into an arrangement with discrete BYONC supported by
different physical resources.”165 In other words, New Large Load may reduce or eliminate
its IRAS availability by mixing and matching BYONC supported by many different
physical resource, with the caveat that no MW of BYONC may sold twice. This approach
best allows resources to price each MW of BYONC capability and derive an alternative
revenue stream that will facilitate the development of new capacity in PJM.
To provide further flexibility, PJM is proposing that “[a] New Large Load may enter
into an arrangement with BYONC in excess of its current Eligible Large Load Amount,
e.g., to allow for expected growth in the New Large Load.”166 Thus, a New Large Load
that has plans for expanding in the future may go ahead and lock in BYONC for such
planned growth before the growth occurs. This type of arrangement would occur where
the new capacity enters commercial operation at its maximum facility output level while
the New Large Load has not achieved its maximum expected demand level. Offering this
flexibility to the New Large Load and BYONC arrangements is reasonable, as it allows the
parties to fashion their arrangements however they see fit.
While PJM is proposing significant flexibility in reaching BYONC-New Large
Load arrangements, PJM is proposing that once the subject of an arrangement BYONC
cannot change to a different New Large Load—i.e., BYONC is non-transferable.
Specifically, PJM is proposing that “BYONC that is in an arrangement with a New Large
164 Proposed Tariff, Attachment DD-4, section VII(f).
165 Proposed Tariff, Attachment DD-4, section VII(g).
166 Proposed Tariff, Attachment DD-4, section VII(h).
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Load must remain in such arrangement with that New Large Load unless and until the New
Large Load is permanently out-of-service.”167 This limitation is necessary and consistent
with PJM’s overall scheme. Specifically, PJM is proposing that once BYONC is in an
arrangement with a New Large Load, such arrangement is permanent,168 and the New Large
Load gets the benefit of “bringing” this new capacity to the system and permanently
reduces its availability to provide Interim Resource Adequacy Service by the ICAP
equivalent of the BYONC.169 Allowing BYONC to leave or be traded after entering into
an arrangement with a New Large Load would dramatically increase the complexity of the
program without commensurate benefit. New Large Loads would be susceptible to
fluctuations in their Interim Resource Adequacy Service availability, and could be left
scrambling for additional BYONC. PJM would need to expend extra resources ensuring
no BYONC enters into an arrangement with New Large Load more than once.
d.
The Accredited UCAP value for BYONC subject to an
arrangement is set in the first Delivery Year the arrangement
is in effect.
The timing of the arrangement is central to the determination of the BYONC’s
Accredited UCAP value—the ICAP equivalent of this Accredited UCAP value is used to
167 Proposed Tariff, Attachment DD-4, section VII(e).
168 As discussed, PJM is proposing that BYONC based on Demand Resources or DER Capacity Aggregation
Resources may be replaced within the 10-year RPM Auction commitment. This does not affect the
requirement the BYONC is permanent, as the Demand Resources or DER Capacity Aggregation Resources
being replaced must be retired and their registered locations can never support future BYONC. See proposed
Tariff, Attachment DD-4, section VIII(e) (“[T]he replaced BYONC (and its supporting registrations) may no
longer provide BYONC.”).
169 See proposed Tariff, Attachment DD-4, section V(b) (determination of a New Large Load’s Eligible New
Large Load Amount).
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reduce a New Large Load’s potential IRAS availability as discussed below in Part II.C.7.170
For BYONC supported by any resource type (generation, storage, and demand-side), the
Accredited UCAP of the BYONC “shall be the Accredited UCAP for the RPM Auction in
which the BYONC cleared for the initial Delivery Year the BYONC is in an arrangement
with the New Large Load.”171 For BYONC supported by Demand Resources or DER
Capacity Aggregation Resources, such Accredited UCAP value “must be demonstrated
each year for a 10-year period using the Demand Response or DER Capacity Aggregation
Resources installed capacity for the first Delivery Year after the BYONC is in an
arrangement with the New Large Load.”172 This requirement is derived from PJM’s
existing Demand Resource rules, which require sellers to the “demonstrate, to PJM’s
satisfaction, that such resource shall have the capability to provide a reduction in demand,
or otherwise control load, on or before the start of the Delivery Year for which such
resource is committed.”173 However, given the 10-year commitment for BYONC, the usual
one-year demonstration must extend to cover all 10 years. This is reasonable, as it provides
a level of assurance that the capacity to be provided by such demand-side resource is
commensurate with that offered by a generation or storage resource.
170 See proposed Tariff, Attachment DD-4, section V(b) (“A New Large Load’s Eligible New Large Load
Amount shall be determined as follows: (New Large Load’s registered peak load (in MW), as provided in the
Large Load Registry) minus (the sum of all BYONC arrangements with the New Large Load in accordance
with Tariff, Attachment DD-4, section VII divided by the Forecast Pool Requirement for the first Delivery
Year in which the BYONC cleared an RPM Auction, plus Allocated RBP UCAP MW assigned to the New
Large Load, in accordance with Tariff, Attachment DD-4, section IX divided by the Forecast Pool
Requirement for the first Delivery Year in which the Allocated RBP UCAP MW cleared an RPM Auction).”).
171 Proposed Tariff, Attachment DD-4, sections VII(i)(i)-(ii).
172 Proposed Tariff, Attachment DD-4, section VII(i)(ii).
173 RAA, Schedule 6, section A.5.
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5.
Allocated RBP UCAP MW
In addition to BYONC, a New Large Load may have its IRAS availability reduced
by being allocated a share of the RBP UCAP MW174 obtained through the Reliability
Backstop Procurement that PJM has proposed in Docket No. ER26-3380.175
Under the proposed RBP rules, the costs for committed RBP UCAP MW are, as a
general matter, allocated to each Electric Distributor’s zones/areas based on its pro-rata
share of forecasted load growth in the PJM Region from the 2026/2027 Delivery Year to
the 2028/2029 Delivery Year.176 To do so, PJM used the total load growth, in part to
determine the target quantity to be committed through the Reliability Backstop
Procurement, called the “Final RBP Target,” and provided that costs for such resources will
be allocated “an Electric Distributor’s zone/area on a pro-rata basis using the zone/area’s
assigned share of the total Final RBP Target MW across all zone/areas.”177 In other words,
those areas that have forecasted load growth—which is generally due to Large Loads,
including New Large Loads—will be allocated the costs for the RBP UCAP MW.
For purposes of IRAS availability, PJM proposes that the allocation of RBP UCAP
MW following the RBP cost allocation at the Electric Distributor zone/area level, such that
each Electric Distributor zone/area “shall be allocated RBP UCAP MW on a pro-rata basis
174 RBP UCAP MW is the unforced capacity product committed through the RBP.
175 RBP Proposal Filing, Transmittal Letter at 46.
176 See RBP Proposal Filing, proposed Tariff (Attachments A & B), Attachment DD, section 18.3(a) (“The
Office of the Interconnection shall allocate the Initial RBP Target MW to each Electric Distributor’s
zone/area using that zone/area’s pro-rata share of the difference between the forecasted Load Adjustments
for the 2026/2027 Delivery Year and the 2028/2029 Delivery Year. . . . The resulting reduced MW, floored
at zero, is used to calculate the zone/area’s assigned pro-rata share of the Final RBP Target MW. The
zone/area’s assigned share of the Final RBP Target MW shall remain constant throughout the fixed, 15-year
term.”).
177 RBP Proposal Filing, proposed Tariff (Attachments A & B), Attachment DD, section 18.3(a).
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using the Electric Distributor zone/area’s assigned share of the total Final RBP Target MW
across all zone/areas.”178 From there, to allocate that quantity among New Large Load’s
in the Electric Distributor’s zone/area, PJM proposes that the Electric Distributor “shall
inform [PJM] how such RBP UCAP MW should be further allocated among the New Large
Loads located in the Electric Distributor’s zone/area.”179 But, in the event the Electric
Distributor has not informed PJM how to allocated its share of RBP UCAP MW among its
New Large Loads by April 1 before a given Delivery Year, PJM will allocate that quantity
pro rata among the New Large Loads in the zone/area.180 Since RBP commitments can
vary each Delivery Year as RBP Resources enter commercial operation, the allocation of
RBP UCAP MW will be done for each Delivery Year throughout the 15-year RBP
commitment term, i.e., from 2028/2029 through 2042/2043.
PJM’s proposed approach is just and reasonable. The “benefit” of RBP UCAP MW
in the context of IRAS should flow to the entities with cost responsibility for the RBP
UCAP MW. Thus, New Large Loads should get an offset credit to their capacity needs for
RBP UCAP MW.
178 Proposed Tariff, Attachment DD-4, section IX(a).
179 Proposed Tariff, Attachment DD-4, section IX(b)(i). Each New Large Load’s allocated share of its
zone/area’s RBP UCAP MW is called “Allocated RBP UCAP MW.” See proposed Tariff, Definitions –
Allocated RBP UCAP MW.
180 Proposed Tariff, Attachment DD-4, section IX(b)(ii).
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6.
Only Eligible New Large Loads will be considered available to
provide Interim Resource Adequacy Service, and then only to the
extent they do not have sufficient BYONC to meet their capacity
needs.
All New Large Loads shall be eligible to provide IRAS and considered Eligible
New Large Loads181 to the extent the combination of their BYONC arrangements and
Allocated RBP UCAP MW does not meet their capacity needs.182 To determine whether a
New Large Load is an Eligible New Large Load, PJM will determine its Eligible New
Large Load Amount—a measurement of the difference between the New Large Load’s
peak load (in MW) as reported in the New Large Load Registry and the ICAP equivalent
of its (1) BYONC arrangements and (2) Allocated RBP UCAP MW.183 If the Eligible New
Large Load Amount is greater than zero MW, the New Large Load is an Eligible New
Large Load.184
181 See proposed Tariff, Definitions – Eligible New Large Load (‘“Eligible New Large Loads’ shall mean a
New Large Load eligible to provide Interim Resource Adequacy Service in accordance with Tariff,
Attachment DD-4, section V.”).
182 See proposed Tariff, Attachment DD-4, section V(a); see also proposed Tariff, Attachment DD-4, section
IV(a) (“All Eligible New Large Loads shall be available to be requested to provide Interim Resource
Adequacy Service by [PJM].”).
183 See proposed Tariff, Attachment DD-4, section V(b) (“A New Large Load’s Eligible New Large Load
Amount shall be determined as follows: (New Large Load’s registered peak load (in MW), as provided in the
Large Load Registry) minus (the sum of all BYONC arrangements with the New Large Load in accordance
with Tariff, Attachment DD-4, section VII divided by the Forecast Pool Requirement for the first Delivery
Year in which the BYONC cleared an RPM Auction, plus Allocated RBP UCAP MW assigned to the New
Large Load, in accordance with Tariff, Attachment DD-4, section IX divided by the Forecast Pool
Requirement for the first Delivery Year in which the Allocated RBP UCAP MW cleared an RPM Auction).”).
184 See proposed Tariff, Attachment DD-4, section V(a) (“New Large Loads with a cumulative installed
capacity equivalent of their BYONC arrangements and assigned Allocated RBP UCAP MW that equals or
exceeds the New Large Load’s registered peak load, as provided in the Large Load Registry, shall not be
Eligible New Large Loads. New Large Loads that are located within an FRR Service Area cannot be Eligible
New Large Loads.”).
184 See proposed Tariff, Attachment DD-4, section V(a). This is reasonable given that FRR Entities are
individually responsible for securing sufficient capacity for all loads within their FRR Service Area, and are
therefore not reliant on RPM to secure capacity commitments.
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7.
Determination of the maximum amount of Interim Resource
Adequacy Service available for a Delivery Year for the PJM Region
and each Electric Distributor zone/area.
The amount of Interim Resource Adequacy Service PJM may need to be available
will be determined each Delivery Year for the PJM Region and each Electric Distributor
zone/area. The amount of Interim Resource Adequacy Service needed to be available
depends on the level of capacity shortfall for the PJM Region and the Eligible New Large
Load Amounts.
There are three possible scenarios. One, the capacity shortfall185 exceeds the
cumulative sum of all Eligible New Large Load Amounts across the PJM Region. In this
event, then PJM will need all Eligible New Large Load Amounts to be available to provide
Interim Resource Adequacy Service for that Delivery Year.186
Two, the capacity shortfall is less than the cumulative sum of all Eligible New
Large Load Amounts across the PJM Region. In this event, then PJM only needs Eligible
New Large Loads to make available Interim Resource Adequacy Service in a cumulative
amount equal to the capacity shortfall.187
185 To use the most precise figure, the capacity shortfall shall be determined after the Third Incremental
Auction and equal: “([amount of Capacity Resources committed for a given Delivery Year (as determined
after the Third Incremental Auction) is less than the PJM Region Reliability Requirement determined prior
to the Third Incremental Auction] divided by the Pool-wide Accredited UCAP Factor).” Proposed Tariff,
Attachment DD-4, section IV(b)(i).
186 See proposed Tariff, Attachment DD-4, section IV(b)(i).
187 See proposed Tariff, Attachment DD-4, section IV(b)(ii) (“In the event ([the amount of Capacity
Resources committed for a given Delivery Year (as determined after the Third Incremental Auction) is less
than the PJM Region Reliability Requirement determined prior to the Third Incremental Auction] divided by
the Pool-wide Accredited UCAP Factor) by an amount less than the sum (in MW) of all Eligible New Large
Load Amounts, then the difference (in MW) shall be the cumulative amount (in MW) of Eligible New Large
Load Amounts that the Office of the Interconnection needs to be available to provide Interim Resource
Adequacy Service for that Delivery Year.”).
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Third, there is no capacity shortfall, i.e., “([the amount of Capacity Resources
committed for a given Delivery Year (as determined after the Third Incremental Auction)
equals or exceeds the PJM Region Reliability Requirement determined prior to the Third
Incremental Auction] divided by the Pool-wide Accredited UCAP Factor)” and PJM “does
not need any Eligible New Large Loads to be available to provide Interim Resource
Adequacy Service for that Delivery Year.”188
If the first or second scenarios occur, PJM will need to determine for the Delivery
Year the total amount of IRAS needed to be available on a daily basis across the PJM
Region and for each Electric Distributor zone/area.189 The regional amount will be the
lesser of: the cumulative sum of all Eligible New Large Load Amounts across the PJM
Region or the capacity shortfall.190 In either instance, the maximum amount of IRAS PJM
needs from an Electric Distributor zone/area will be determined in accordance with the
following formula:
the product of the sum of all Eligible New Large Load Amounts
needed in the PJM Region pursuant to Attachment DD-4,
section IV(b) multiplied by the quotient of [(the sum of all Eligible
New Large Load Amounts in the Electric Distributor’s zone/area)
divided by (the sum of all Eligible New Large Load Amounts in the
PJM Region)].191
In other words, each Electric Distributor zone/area will be required to provide a
proportional share of the IRAS needed based on the sum of the Eligible New Large Load
Amounts in its zone/area. Thought of conversely, each Electric Distributor zone/area will
188 Proposed Tariff, Attachment DD-4, section IV(b)(iii).
189 See proposed Tariff, Attachment DD-4, section IV(c).
190 See proposed Tariff, Attachment DD-4, section IV(c)(i).
191 See proposed Tariff, Attachment DD-4, section IV(c)(ii).
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need to be available to provide IRAS consistent with the amount of capacity the Eligible
New Large Loads in the zone/area need to meet the zone/area’s capacity needs.
As discussed above in Parts II.C.2.a and II.C.3, to the extent the third scenario (i.e.,
PJM does not have a capacity shortfall) occurs for three consecutive Delivery Years, then
the IRAS program effectively goes to sleep, with any existing BYONC relieved of their
RPM participation obligations192 and all New Large Loads effectively becoming Large
Loads. The New Large Loads become Large Loads because the definition of New Large
Load is initially tied to an in-service date of June 1, 2027, or later.193
PJM is not proposing an end date to the IRAS program. Regardless of whether the
PJM Region has maintained capacity sufficient to meet the PJM Region Reliability
Requirement for three or more years, PJM will continue to maintain the Large Load
Registry. However, if the region re-enters capacity shortfall conditions, then the need for
New Large Loads to provide IRAS will re-emerge. The definition of New Large Load
allows for this and explicitly provides that New Large Loads will then be defined as
entering service “after June 1 of the first Delivery Year” the PJM Region is short of
capacity.194
192 Proposed Tariff, Attachment DD-4, section VIII(f).
193 Proposed Tariff, Definitions – New Large Load.
194 Proposed Tariff, Definitions – New Large Load. For example, to the extent PJM meets the regional
capacity requirement for Delivery Years 2033/2034, 2034/2035, and 2035/2036, but then enters shortage
conditions for the 2036/2037 Delivery Year, then New Large Loads must have an in-service date after June 1,
2036.
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8.
PJM is not proposing to extend IRAS to New Large Loads located
in FRR Service Areas.
A general purpose of IRAS is for New Large Loads to bring new capacity to address
their capacity needs instead of relying on PJM’s capacity market. Given that FRR Entities
have elected to be responsible for providing capacity for all loads in their FRR Service
Areas, there is no reason to extend IRAS to New Large Loads in FRR Service Areas. For
this reason, as noted above, PJM is proposing that “New Large Loads that are located
within an FRR Service Area cannot be Eligible New Large Loads.”195 While New Large
Loads in FRR Service Areas may not be eligible for IRAS, they will still fall within the
definition of Large Load and, as such, the LSEs serving such load—or another entity—
will need to register such loads in the Large Load Registry.
However, FRR Entities must procure sufficient capacity for all their New Large
Loads and include such in their FRR Capacity Plans. And, the PJM Region, as a whole,
does not have excess capacity right now, so the FRR Entity must add new capacity for any
New Large Load in its territory. Given the current levels of existing capacity, PJM is
proposing a similar “bring your own new capacity” requirement for FRR Service Areas.
While PJM will not set gating criteria for an FRR Entity’s new capacity to serve New Large
Loads, PJM is proposing a requirement that “[a]n FRR Entity may not include in its FRR
Capacity Plan any MW quantity of Existing Generation Capacity Resource in excess of
what such FRR Entity owned or contracted by such FRR Entity prior to June 1, 2027, to
serve New Large Load” to meet its capacity requirements.196 This rule ensures that FRR
195 Proposed Tariff, Attachment DD-4, section V(a).
196 See proposed RAA, Schedule 8.1, section D.1.1.
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Entities (or their New Large Loads) bring new capacity to the system to meet the New
Large Loads’ resource adequacy needs, and precludes FRR Entities from satisfying load
growth from New Large Loads with existing Capacity Resources that could potentially be
lured from the RPM Auctions (and further exacerbating the shortage conditions in the
capacity market). The growth of Large Loads is an issue facing the entire PJM Region,
and new capacity should arrive to serve their needs, regardless of whether the New Large
Load is to be located in an FRR Service Area or the region served by RPM. At the same
time, this measured approach provides FRR Entities with the necessary flexibility to
replace contracts for capacity from one set of resources with a different set of resources
that may be existing so long as the total MW quantity of Existing Generation Capacity
Resource in the FRR Capacity Plan does not exceed the amount that such FRR Entity
owned or contracted prior to June 1, 2027, to serve New Large Loads.
D.
Load Reduction Under Interim Resource Adequacy Service
1.
Interim Resource Adequacy Service will be needed only to address
potential capacity emergencies or IROL violations.
IRAS is a supplemental capacity product through which Eligible New Large Loads
may be directed by the Electric Distributor to reduce their load in response to an Interim
Resource Adequacy Service Action called by PJM. Indeed, proposed Tariff,
Attachment DD-4, section I(a) accurately describes Interim Resource Adequacy Service as
“a load reduction service, effective starting with the 2027/2028 Delivery Year, through
which Eligible New Large Loads may be compensated for providing load reductions
requested by [PJM] to maintain system reliability for the purpose of supporting the
integration of New Large Loads to the PJM Region that are not in arrangements with new
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capacity additions to the PJM Region.” In other words, IRAS is needed to manage the
capacity needs of New Large Loads that have not satisfied their capacity needs on their
own.
Thus, “[s]tarting with the 2027/2028 Delivery Year, [PJM] may, in accordance with
the Manuals, instruct the implementation of an Interim Resource Adequacy Service Action
prior to calling on Pre-Emergency Load Management Reductions Actions after
determining that available economic real-time supply may not be sufficient to maintain
reserves to meet applicable Reserve Requirements and/or Interconnection Reliability
Operating Limits within prescribed limits and prevent cascading outages.”197 In other
words, PJM anticipates the need to implement IRAS when (1) it is no longer able to
maintain reserves in the RTO or a zone; or (2) there are insufficient resources to keep
IROLs within defined operating limits in order to prevent instability, uncontrolled
separation, or cascading outages that adversely impact the reliability of the interconnection.
As detailed in the proposed Tariff language, PJM may initiate an Interim Resource
Adequacy Service Action, which is an “Operating Instruction, as defined by NERC,”198 in
accordance with the procedures and conditions to be detailed in the Manuals, and “prior to
calling on Pre-Emergency Load Management Reduction Actions after determining that
available economic real-time supply may not be sufficient to maintain reserves to meet
applicable Reserve Requirements and/or Interconnection Reliability Operating Limits
within prescribed limits and prevent cascading outages.”199 The details as to how and when
197 Proposed Tariff, Attachment DD-4, section I(b).
198 Proposed Tariff, Definitions – Interim Resource Adequacy Service Action.
199 Proposed Tariff, Attachment DD-4, section I(b).
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PJM may call an Interim Resource Adequacy Service Action will be set forth in PJM
Manual 13.200
The affidavit of Mr. Christopher Pilong, Senior Director of Operations Planning for
PJM, provides an overview of the steps taken by PJM Dispatchers, in accordance with PJM
Manual 13, “to manage, allocate, or alleviate an emergency” in the course of Emergency
Procedure Advisories, Alerts, Warnings, and Actions.201
Interim Resource Adequacy Service may be called on, as necessary, to maintain
required RTO/Zonal Reserves, IROLs within limits, and/or prevent cascading outages if
available economic generation is not sufficient. To implement IRAS Emergency
Procedures, PJM intends to revise PJM Manual 13 to include IRAS Alerts and IRAS
Actions. Mr. Pilong further explains, in his affidavit, how Interim Resource Adequacy
Service Alerts and Interim Resource Adequacy Service Actions will be added to the steps
taken in the event of an emergency, and thus provide an additional tool that PJM
Dispatchers may use when responding to an emergency.202
Importantly, however, while Interim Resource Adequacy Service Alerts and Interim
Resource Adequacy Service Actions will be incorporated into a general sequence of
escalating Emergency Procedures, Mr. Pilong notes that it remains the case that “PJM
200 CIFP Framework for Service at 4 (“New and/or existing Emergency Procedures (Alerts and Warnings)
need to be adjusted as appropriate to provide advanced notice that Interim Resource Adequacy Service may
need to be reduced. This will be documented in [PJM] Manual 13.”).
201 Affidavit of Mr. Christopher Pilong on Behalf of PJM Interconnection, L.L.C. (Attachment C) ¶ 5 (“Pilong
Aff.”) (quoting PJM Manual 13, section 2.1).
202 Pilong Aff. ¶¶ 29-55.
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Dispatchers ‘have the flexibility to implement emergency procedures in whatever order is
required to ensure system reliability.”203
That said, PJM anticipates that the general sequence of Emergency Procedures will
be revised, as follows: Prior to the Operating Day, PJM may issue Interim Resource
Adequacy Service Alerts, which would put all Eligible New Large Loads on notice that
PJM may “request reductions in load in quantities equal to or lesser than each Electric
Distributor zone/area’s assigned IRAS amounts during the next Operating Day.”204 Interim
Resource Adequacy Service Alerts would be available before and/or concurrently with a
Max Gen Alert/Load Management Alert.205 Mr. Pilong describes a scenario (Example 1),
in which PJM operators look ahead to the next Operating Day and determine that it is
necessary to issue an Interim Resource Adequacy Service Alert.206 As Mr. Pilong explains,
“All alerts and cancellation thereof are broadcast on the ALLCALL system and posted to
selected PJM websites to assure that all members receive the same information. Alerts are
issued in advance of a scheduled load period to allow sufficient time for members to
prepare for anticipated initial capacity shortages.”207
In real-time, as Mr. Pilong explains, Interim Resource Adequacy Service Actions
would become a new step available to PJM Dispatchers, prior to Pre-Emergency Load
Management Reductions.208 Mr. Pilong describes a scenario (Example 2) in which PJM
203 Pilong Aff. ¶ 15 (quoting PJM Manual 13, section 2.3) (footnotes omitted).
204 Pilong Aff. ¶ 31.
205 Pilong Aff. ¶ 31.
206 Pilong Aff. ¶¶ 29-34.
207 Pilong Aff. ¶ 33 (quoting PJM Manual 13, section 2.3.1).
208 Pilong Aff. ¶ 45.
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Dispatchers respond to an RTO-wide emergency in real-time by deploying an Interim
Resource Adequacy Service Action under an EEA1.209
As Mr. Pilong explains, prior to deploying Interim Resource Adequacy Service
Actions, PJM Dispatchers may first “deploy available generation and economic demand
resources, in economic dispatch order while maintaining required reserves.”210 Second,
PJM Dispatchers may “require non-firm interchange transaction curtailment, as
needed.”211 Third, assuming that “PJM’s new, yet-to-be-effective transmission service
products—Non-Firm Contract Demand Service (‘CDS’) and Interim Network Integrated
Transmission Service (‘Interim NITS’) are effective, PJM may direct curtailment of Non-
Firm CDS and/or Interim NITS transmission service.”212
In accordance with the proposed sequence, “after all non-firm transmission services
are curtailed” PJM may “then issue the new Interim Resource Adequacy Service Action
prior to deployment of a Pre-Emergency Load Management Reduction Action.”213 PJM
intends to communicate Emergency Procedures under IRAS using the status quo
notification processes set forth in PJM Manual 13.214 Figure 1, below, demonstrates how
209 Pilong Aff. ¶¶ 35-47.
210 Pilong Aff. ¶ 36.
211 Pilong Aff. ¶ 37.
212 Pilong Aff. ¶ 12 (citing PJM Interconnection, 195 FERC ¶ 61,209 at P 551 (“[W]e find PJM’s proposal
to curtail Interim NITS and [Non-Firm Contract Demand] transmission service prior to deployment of its
Pre-Emergency Load Response Program, or in response to a transfer capability shortage as a result of system
reliability conditions, to be just and reasonable because it is consistent with how Non-Firm [Point-to-Point
Service] is curtailed. . . . [W]e find that PJM’s proposal to curtail Interim NITS during capacity or reserve
shortages is just and reasonable and consistent with both the nature of the transmission service as a non-firm
transmission service for which Eligible Customers do not pay generation capacity charges, and the need to
maintain reliability.” (footnote omitted))); id. ¶ 39.
213 Pilong Aff. ¶ 40.
214 Pilong Aff. ¶ 41.
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New Interim Resource Adequacy Service Actions may precede Pre-Emergency Load
Management Reductions in an EEA1.
Figure 1: PJM Emergency Procedures with Interim Resource Adequacy Service (IRAS)
As explained in PJM Manual 13, “EEA1 signals that PJM foresees or is experiencing
conditions where all available resources are scheduled to meet firm load, firm transactions,
and reserve commitments, and is concerned about sustaining its required Contingency
Reserves.”215 In other words, the region is approaching a capacity event. Thus, it is
appropriate for PJM to direct Electric Distributors to reduce those New Large Loads that
have failed to cover their capacity obligations before relying on Demand Resources,
through Pre-Emergency Load Management Reductions Actions, to maintain reliability.
To further illustrate how PJM plans to integrate IRAS into its Emergency
Procedures, PJM prepared Figure 2, which shows how IRAS will affect PJM’s Emergency
Procedures, relative to the status quo, and when there is an order from the Secretary of
215 PJM Manual 13, section 2.3.1.
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Energy under FPA section 202(c) authorizing backup generation to run in excess of their
permits.216
Figure 2: Comparison of PJM Emergency Procedures
Alerts and
Warnings
EEA1
EEA2
Last step
before
EEA3
EEA3
Today
(Status
quo)
Schedule
All
Available
Resources;
issue Max
Gen Alert
Pre-Emergency DR
Emergency
DR
Shed Non-
critical load
with backup
generation
(remaining
load)
firm load
shed
Status
quo
plus
DOE
202c
Order
Schedule
All
Available
Resources;
issue Max
Gen Alert
Pre-Emergency DR
Emergency
DR
Energency
Use of
Back-up
Generators
(pre
6/1/2027
load)
Shed Non-
critical load
with backup
generation
(remaining
load)
firm load
shed
With
IRAS
Schedule
All
Available
Resources;
issue IRAS
and/or Max
Gen Alerts
IRAS Large
Load
reduction
(post 6/1/27
load) without
BYONC
Pre-
Emergency
DR
Emergency
DR
Energency
Use of
Back-up
Generators
(pre
6/1/2027
load)
Shed Non-
critical load
with backup
generation
(remaining
load)
firm load
shed
Finally, Figures 1 and 2 illustrate that changing the Emergency Procedures
sequence to call on IRAS after Pre-emergency Load Management would reduce the
incentive for New Large Loads to bring new capacity to the system, as they would be
insulated by the Demand Resource capacity products.
216 16 U.S.C. § 824a(c).
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2.
How PJM will call an Interim Resource Adequacy Service Action
Under the terms of the Operating Agreement and as the Reliability Coordinator,
Transmission Operator, and Balancing Authority, PJM has the authority and flexibility to
initiate Emergency Procedures as it sees fit to maintain the reliability of the PJM Region.
Indeed, the Operating Agreement explicitly authorizes PJM to “[c]oordinate the
curtailment or shedding of load, or other measures appropriate to alleviate an Emergency,
in order to preserve reliability in accordance with NERC, or Applicable Regional Entity
principles, guidelines and standards, and to ensure the operation of the PJM Region in
accordance with Good Utility Practice and this Agreement[,]”217 where an “Emergency” is
defined as mean “a condition that requires implementation of emergency procedures as
defined in the PJM Manuals.”218
Therefore, while the addition of IRAS Emergency Procedures will add to the
sequence of escalating steps that PJM may take to respond to an emergency and prevent
Manual Load Dump, Mr. Pilong also adds that, as set forth in PJM Manual 13, “the
rapidness of system events influences the timing and order of actions necessary to maintain
system reliability. PJM Dispatchers ‘have the flexibility to implement emergency
procedures in whatever order is required to ensure system reliability. Likewise, they have
the flexibility to exit emergency procedures in a different order than they were
implemented.’”219
217 Operating Agreement, Schedule 1, section 1.6.2(vii).
218 Operating Agreement, section 1, Definitions E – F (defining Emergency).
219 Pilong Aff. ¶ 15 (quoting PJM Manual 13, section 2.3) (footnotes omitted).
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Thus, while IRAS and Pre-Emergency Load Management Reductions would both
be categorized as EEA1 actions, the sequence of actions is such that PJM will generally
call on IRAS before Pre-Emergency Load Management Reductions to address an
Emergency, to the extent the zone/area has any IRAS available.
Furthermore, as Mr. Pilong explains in his affidavit, PJM will issue MW load
reduction directives to “Electric Distributors to implement reductions in load up to, and
capped at, the pre-Delivery Year IRAS obligations they were assigned. Importantly, PJM
will not direct specific New Large Loads to reduce load, even though Electric
Distributors—in coordination, where applicable, with relevant states, Load Serving
Entities, and New Large Loads—may issue more specific directives to specific retail
customers. PJM will only direct load reduction of an aggregate MW IRAS within the zone
or area.”220
In addition, PJM may deploy broader or more targeted IRAS Actions, as needed.
In response to an RTO-wide emergency, for example, as Mr. Pilong explains in Example 2,
“based on the maximum IRAS amounts assigned to each Electric Distributor zone/area,
PJM Dispatchers [may] call for some or all Electric Distributors to reduce load across the
PJM RTO Region in the manner they see fit to address the system conditions.”221
By comparison, in response to a potential Interconnection Reliability Operating
Limit Violation, as described in Mr. Pilong’s Example 3, the deployment of an Interim
Resource Adequacy Service Action in real-time may be more targeted. In Mr. Pilong’s
220 Pilong Aff. ¶ 52; see id. ¶¶ 48-55.
221 Pilong Aff. ¶ 43.
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Example 3, “the Dominion Zone is experiencing a transmission capacity scarcity event
resulting from a potential IROL violation due to overloading of an IROL facility in West
Virginia, e.g., AP South. In response, it makes little sense for PJM Dispatchers to curtail
non-firm exports to the West or North of the PJM system. However, PJM may require
curtailment of non-firm exports between PJM and areas to the South that are flowing power
across the AP South IROL Reactive Interface to mediate the potential IROL violation.”222
To the extent PJM Dispatchers determine it is necessary to issue an Interim Resource
Adequacy Service Action in response to the potential IROL violation, it would likely be a
more targeted Interim Resource Adequacy Service Action than the pro rata load reductions
across multiple Electric Distributor zones/areas issued in Example 2. As Mr. Pilong
testifies, “[i]f load in a particular Electric Distributor zone/area is not negatively impacting
transmission flows into the Dominion Zone, load reduction in that zone/area may not have
any effect on the Dominion Zone.”223
3.
Electric Distributors must follow PJM directives to reduce
megawatts of load in response to an Interim Resource Adequacy
Service Action.
When PJM issues an Interim Resource Adequacy Service Action, the applicable
Electric Distributor will be sent an IRAS reduction MW quantity, which will be based on
the IRAS quantity PJM determined for the Delivery Year, as described above in Part II.C.7.
That is, an Interim Resource Adequacy Service Action will not be specific as to which New
Large Loads would need to be reduced; rather, it will be based on the aggregate MW of
222 Pilong Aff. ¶¶ 48-55.
223 Pilong Aff. ¶ 53.
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reduction available from the Eligible New Large Loads in the zone/area. The entities sent
such directive will be expected, and required, to implement it. PJM proposes that Interim
Resource Adequacy Service Action be defined as “an Operating Instruction, as defined by
NERC.”224 As such, Electric Distributors and LSEs would need to follow it:
• Given that PJM is the Reliability Coordinator, NERC Reliability Standard
IRO-001-4 R2 would require compliance with an Interim Resource Adequacy
Service Action, as that standard provides that “[e]ach Transmission Operator,
Balancing Authority, Generator Operator, and Distribution Provider shall
comply with its Reliability Coordinator’s Operating Instructions unless
compliance with the Operating Instructions cannot be physically implemented
or unless such actions would violate safety, equipment, regulatory, or statutory
requirements.”225
• Similarly, given that PJM is the Transmission Operator, NERC Standard
TOP-001-6 R1 would require compliance with an Interim Resource Adequacy
Service Action, as that standard, provides that “[e]ach Transmission Operator
shall act to maintain the reliability of its Transmission Operator Area via its own
actions or by issuing Operating Instructions,” and R3 requires “[e]ach
Balancing Authority, Generator Operator, and Distribution Provider shall
comply with each Operating Instruction issued by its Transmission Operator(s),
unless such action cannot be physically implemented.”226
• Finally, the Operating Agreement requires all Members and Market
Participants, including Electric Distributors subject to unique obligations, to
follow PJM Emergency procedures.227
224 In full, the proposed definition is: “‘Interim Resource Adequacy Service Action’ shall mean an Operating
Instruction, as defined by NERC, issued from the Office of the Interconnection to reduce load prior to calling
on Pre-Emergency Load Management Reductions after determining that available economic real-time supply
may not be sufficient to maintain reserves to meet applicable Reserve Requirements and/or Interconnection
Reliability Operating Limits within prescribed limits and prevent cascading outages.” Proposed Tariff,
Definitions – Interim Resource Adequacy Service Action.
225 Standard IRO-001-4 Reliability Coordination - Responsibilities, North American Electric Reliability
Corporation (June 12, 2025), https://www.nerc.com/globalassets/standards/reliability-standards/iro/iro-001-
4.pdf [https://perma.cc/72GK-YZG3].
226 TOP-001-6 - Transmission Operations, North American Electric Reliability Corporation (June 12, 2025),
https://www.nerc.com/globalassets/standards/reliability-standards/top/top-001-6.pdf
[https://perma.cc/L3FQ-QBRN].
227 See Operating Agreement, section 11.3.1(e) (Members shall “[c]omply with the requirements of the PJM
Manuals and all directives of the Office of the Interconnection to take any action for the purpose of managing,
alleviating or ending an Emergency.”); Operating Agreement, section 11.3.3(c) (Electric Distributors shall
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Accordingly, while PJM might not be able to directly reduce the loads of Eligible New
Large Loads to the extent they are available to provide IRAS, PJM can direct others to do
so with a high degree of confidence that such directives will be followed.
Given these requirements, it can be no surprise that today Electric Distributors
select, consistent with their state programs, which loads to reduce in response to a PJM
load reduction directive. Stated another way, PJM is not looking to change any existing
approach. Currently, the manner in which an Electric Distributor reduces load is a function
of their state-approved contracts and state-approved curtailment and load reduction plans.
4.
The IRAS load reduction framework is, at its core, a product of
cooperative federalism that recognizes the significant role of the
states in requiring New Large Loads to reduce their load to support
reliability pursuant to IRAS.
The proposed IRAS framework assigns an Eligible New Large Load Amount,
which is measured in MW, to Electric Distributor zones/areas in a manner that respects the
balance of authority between states, the Commission, and PJM.228 The framework
“[m]aintain or arrange for a portion of its connected load to be subject to control by . . . load-shedding devices
at least equal to the levels established pursuant to the Reliability Assurance Agreement.”); Operating
Agreement, section 11.3.3(e) (Electric Distributors shall “[s]hed connected load, share Generation Capacity
Resources and take such other coordination actions as may be necessary in accordance with the directions of
the Office of the Interconnection in Emergencies.”); Operating Agreement, Schedule 1, section 1.7.4(b)
(“Market Participants shall undertake all operations in or affecting the PJM Interchange Energy Market and
the PJM Region including but not limited to compliance with all Emergency procedures, in accordance with
the power and authority of the Office of the Interconnection with respect to the operation of the PJM
Interchange Energy Market and the PJM Region as established in this Agreement, and as specified in the
Schedules to this Agreement and the PJM Manuals.”); Operating Agreement, Schedule 1, section 1.7.4(g)
(“Each Market Participant shall follow the directions of the Office of the Interconnection to take actions to
prevent, manage, alleviate or end an Emergency in a manner consistent with this Agreement and the
procedures of the PJM Region as specified in the PJM Manuals.”); Operating Agreement, Schedule 1,
section 1.7.11(a) (“The standards, policies and procedures of the Office of the Interconnection for declaring
the existence of an Emergency, including but not limited to a Minimum Generation Emergency, and for
managing, alleviating or ending an Emergency, shall apply to all Members on a non-discriminatory basis.”).
228 See, e.g., New PJM Cos., 107 FERC ¶ 61,272, at P 22 (2004) (“In the event of a transmission emergency,
PJM is only responsible for determining the location, quantity, and timing of any curtailment. PJM is not
responsible for determining or directing the manner in which load is to be curtailed during an emergency.”).
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recognizes the role that states and/or RERRAs play in integrating New Large Loads and
managing load reductions when necessary.229
a.
During an Interim Resource Adequacy Event, PJM will
direct a MW quantity of load reduction to the relevant
Electric Distributor zone(s)/area(s).
In a Delivery Year in which IRAS applies, PJM will identify, for each zone/area,
the Eligible New Large Load Amounts, i.e., MW quantities that are eligible to be called
upon to reduce load under IRAS. Directing an Electric Distributor, rather than a specific
end-use customer, to reduce a quantity of load is in keeping with PJM’s longstanding
practice and reflects and respects the allocation of jurisdiction between the federal and state
levels.230
More specifically, the Eligible New Large Load Amount assigned to each Electric
Distributor will be derived from information and BYONC arrangements reported to PJM
and recorded in the Large Load Registry. However, should PJM experience system
conditions that require an Interim Resource Adequacy Service Action during a Delivery
Year in which IRAS is in effect, PJM will instruct Electric Distributors to reduce load by
a MW quantity equal to or less than the Electric Distributor’s Eligible New Large Load
Amount for that Delivery Year. PJM will not direct specific LSEs and/or specific
customers of LSEs—including specific Large Loads—to reduce their load and/or switch
229 See, e.g., 52 Pa. Code § 57.52 (2026) (“Emergency load control and energy conservation by electric
utilities.”); 20 Va. Admin. Code § 5-300-20 (2026) (“Virginia electric energy emergency conservation
plan.”).
230 See, e.g., New PJM Cos., 107 FERC ¶ 61,272 at P 21 (“When such emergency circumstances arise, PJM
will inform the electric distribution company serving load of the quantity and location of load that must be
shed, and the distributor, which directly serves the affected load, will effectuate the load-shedding.”).
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to on-site backup resources. Those decisions would be worked out through revised state
retail tariffs. PJM stands ready to assist states in developing those tariffs if they so desire.
Pursuant to the proposed framework, Electric Distributors will be responsible for
“coordinat[ing] as appropriate, with the relevant state(s) or RERRA(s), individual Load
Serving Entities, and customers served by the Load Serving Entities in its zone/area to
support transparent, effective, and orderly deployment of Interim Resource Adequacy
Service.”231 Thus, under the IRAS framework, the specific retail customers that must
reduce load consumption or switch to backup resources will be determined by the Electric
Distributor and relevant LSEs in the zone/area, in coordination with the appropriate state
and/or RERRA. Indeed, while PJM has proposed definitions of Large Load, New Large
Load, and Eligible New Large Load that may be subject to IRAS, PJM simultaneously
recognizes that states may each define “large loads” differently for purposes of their retail
tariffs, particularly those governing load reduction protocols. Thus, while PJM will
determine the quantity of MW that load in a zone/area will need to be reduced by to
maintain system reliability in the PJM Region, states may determine—under their own
laws, policies, and definition of what constitutes “large load”—which resources will be
called on to reduce load.
b.
State efforts to develop load reduction programs reflect a
cooperative federalism framework that is similar to that
embedded in PJM’s proposal.
The division of authority and responsibility between states and PJM with respect to
load reduction that is embedded in PJM’s proposed IRAS framework, is also reflected in
231 Proposed Tariff, Attachment DD-4, section III(c).
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the ongoing efforts of the VA SCC and DCC, with other interested states, to jointly develop
model state commission tariff language “establishing emergency load reduction programs
designed to protect residential customers during the most severe reliability emergencies
while preserving reliable system operations[,]” by no later than February 1, 2027, prior to
the applicability of the IRAS framework.232 According to the VA SCC, the model state
commission tariff language would, inter alia:
(1) Establish retail mechanisms authorizing utilities to curtail designated large
commercial and industrial customers, or require the use of available on-site
backup generation, once PJM has exhausted all other available reliability
resources, including demand response, but before implementation of broad
manual load shed; [and]
(2) Define
operational
expectations,
customer
obligations,
and
utility
implementation procedures associated with load reduction programs[.]233
The efforts of the VA SCC and DCC recognize the significant role of the states in
determining which “designated large commercial and industrial customers” will be subject
to load reduction programs, and the operational expectations and customer obligations
associated with such programs. The efforts of the VA SCC and DCC also recognize the
need to establish retail mechanisms authorizing utilities to curtail designated large
commercial and industrial customers or require the use of available on-site backup
generation. These mechanisms must allow PJM and utilities sufficient time to avoid the
232 Letter of Chair of Virginia State Corporation Commission, Kelsey Bagot and President and CEO of Data
Center Coalition, Josh Levi to Ms. Paula Conboy, Chair of PJM Board of Managers, and Mr. David Mills,
President and CEO of PJM Interconnection, L.L.C., 2 (June 30, 2026), https://www.pjm.com/-
/media/DotCom/committees-groups/cifp-rbp/2026/20260630/20260630-written-comments---va-scc-and-
data-center-coalition.pdf [https://perma.cc/S7C6-C86H] (“VA SCC and DCC Letter”).
233 VA SCC and DCC Letter at 2.
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start of manual load shed well before declaration of EEA3. PJM stands ready to assist in
those efforts and other related efforts and engagement.
c.
The division of authority between PJM and the states and/or
RERRAs is supported by relevant precedent.
PJM’s proposed revisions are in line with recent Commission precedent. On
October 23, 2025, the DOE ANOPR, which called on the Commission to consider
“potential reforms to ensure the timely and orderly interconnection of large loads to the
transmission system.”234 The ANOPR further stated that “[e]ven if the large load seeking
to interconnect to the transmission system is an end-use customer, the [ANOPR] does not
exert jurisdiction over any retail sales to the large load.”235 The Commission’s subsequent
Order Regarding Intent to Act on the ANOPR (Order on DOE ANOPR),236 found, inter
alia, that large loads present an urgent need for reforms to ensure their timely, orderly, and
non-discriminatory connection to the transmission system.237 Nevertheless, “the addition
of and service to large loads” and the associated rates, terms, and conditions “implicate
both federal and state interests.”238 Accordingly, the Commission observed, “resolution of
issues related to large load additions will require the involvement of both federal and state
234 DOE ANOPR at P 1 (citations omitted).
235 DOE ANOPR at P 15.
236 Interconnection of Large Loads to the Interstate Transmission System, 195 FERC ¶ 61,045 (2026) (“Order
on DOE ANOPR”).
237 Order on DOE ANOPR, 195 FERC ¶ 61,045 at P 2.
238 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 44; see also December 2025 Show Cause Order,
193 FERC ¶ 61,217 (Issues pertaining to large loads “implicate both federal and state interests, and their
resolution will require the involvement of both federal and state actors, including the Commission, state
public utility commissions, and other state and local entities.”); PJM Interconnection, 195 FERC ¶ 61,197,
concur op. (Commissioner Rosner) at P 2 (“[P]ublic utility commissioners, governors’ offices, and state
legislatures are all necessary partners in ensuring that energy infrastructure is built at the pace needed to stay
ahead of demand and keep energy affordable and reliable for PJM customers.”).
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actors, including the Commission, state public utility commissions, and other state and
local entities.”239 Indeed, as the Commission’s Order on DOE ANOPR points out, in the
last several years, the Commission has accepted proposed tariffs and agreements “related
to large loads connecting to the transmission system . . . while rejecting those that exceeded
the Commission’s jurisdiction or failed to reasonably allocate costs.”240 Likewise, an order
to show cause issued by the Commission on February 20, 2025, on aspects of the
co-location of large loads held that:
states retain exclusive jurisdiction over the terms of retail sales . . .
including . . . how the costs of the wholesale sale and transmission
of electricity assigned to a wholesale customer are allocated among
that wholesale customer’s retail customers. Thus, while a State may
not conclude in setting retail rates that the FERC-approved
wholesale rates are unreasonable, it is within a state’s exclusive
jurisdiction to determine how those FERC-approved rates are
collected among the relevant retail customers.241
At bottom, “exclusive jurisdiction”242 rests with the states to ensure that the appropriate
retail customers, i.e., New Large Loads, including data centers—and not residential
239 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 44; see also id. at P 48 (Notably, the Commission
has expressly “recognize[d] that states will continue to regulate: (1) the specific terms of retail sales to large
load; (2) which entities may make retail sales within their borders; . . . and (3) any siting decisions and
construction associated with the large load project.” (citations omitted)); December 2025 Show Cause Order,
193 FERC ¶ 61,217 at P 165 (Issues pertaining to large loads “implicate both federal and state interests, and
their resolution will require the involvement of both federal and state actors, including the Commission, state
public utility commissions, and other state and local entities.”); PJM Interconnection, 195 FERC ¶ 61,197,
concur op. (Commissioner Rosner) at P 1 (“[P]ublic utility commissioners, governors’ offices, and state
legislatures are all necessary partners in ensuring that energy infrastructure is built at the pace needed to stay
ahead of demand and keep energy affordable and reliable for PJM customers.”).
240 Order on DOE ANOPR, 195 FERC ¶ 61,045 at P 2 (footnotes omitted).
241 PJM Interconnection, L.L.C., 190 FERC ¶ 61,115, at P 68, order directing compliance, December 2025
Show Cause Order, 193 FERC ¶ 61,217 (2025).
242 PJM Interconnection, 190 FERC ¶ 61,115 at P 68 (emphasis added).
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customers or small industrial customers—are reduced when system conditions call for PJM
to require load reductions according to IRAS.
The division of authority and responsibility between PJM and the PJM states is
firmly rooted in the Supreme Court of the United States’ (“Supreme Court”) holding in
EPSA.243 There, the Supreme Court held that the Commission’s regulation of demand
response “addresses—and addresses only—transactions occurring on the wholesale
market” and takes aim at “enhanc[ing] the wholesale, not retail, electricity market.”244 The
Supreme Court accordingly held that the Commission’s rules for demand response
withstood Electric Power Supply Association’s jurisdictional challenge by respecting the
division of federal/state authority set forth in the FPA.245 Even though the FPA’s drafters
could not have anticipated demand response, its regulation was nevertheless consistent
with the division of jurisdictional authority contemplated by the FPA—in which the
Commission, and thereby RTOs/ISOs, retain authority over wholesale transactions, while
states regulate retail transactions.246 Likewise, the reforms in this filing address issues that
the FPA’s drafters would have certainly considered science fiction—the resource adequacy
impacts of New Large Loads, including data centers, driven primarily by exponential
technological advancements in artificial intelligence.
243 EPSA, 577 U.S. at 260.
244 EPSA, 577 U.S. at 282, 287.
245 EPSA, 577 U.S. at 288-91.
246 See Matthew R. Christiansen, FERC v. EPSA: Functionalism and the Electricity Industry of the Future,
68
Stan.
L.
Rev.
(Apr.
2016),
https://www.stanfordlawreview.org/online/ferc-v-epsa/
[https://perma.cc/6QRP-KXET] (citing EPSA, 577 U.S. at 265-68).
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In this case, PJM may issue directives to Electric Distributors to reduce load by a
certain MW quantity during certain, limited emergency conditions. The Eligible New
Large Load Amount attributable to each Electric Distributor zone/area will be guided by
the Large Load Registry. Nevertheless, in recognition of the jurisdictional divide between
PJM and the states and/or RERRAs, PJM will not direct reductions to specific New Large
Loads pursuant to IRAS. Rather, PJM is leaving it to Electric Distributors, in coordination
with the appropriate states and/or RERRAs, LSEs, and LSE customers to determine which
loads should ultimately reduce subject to IRAS. Thus, the IRAS framework divides
authority between PJM and the states in a manner consistent with the FPA’s basic division
of authority.
d.
The division of authority preserves the Commission’s FPA
sections 205 and 206 rights over the IRAS framework.
PJM’s approach also finds support in the Commission’s 2025 order accepting
Midcontinent Independent System Operator, Inc.’s (“MISO”) Revised Expedited Resource
Addition Study (“ERAS”) Proposal.247 In the ERAS order, the Commission found that
RERRA participation in the ERAS process was permissible and not an improper delegation
of federal authority to the states, as the participation of RERRA:
would be wholly pursuant to a Commission-jurisdictional
process . . . proposed by MISO and approved by the Commission—
not by state authorities—and under which a [Generator
Interconnection Procedure] is on file with the Commission and any
future revisions would be subject to Commission approval. Further,
the ERAS process would remain subject to the Commission’s
authority pursuant to FPA sections 205 and 206. In contrast, in
Talen, the Maryland Commission established a state program that
247 Midcontinent Indep. Sys. Operator, Inc., Revisions to the Open Access Transmission, Energy and
Operating Reserve Tariff Expedited Resource Addition Study Filing of Midcontinent Independent System
Operator, Inc., Docket No. ER25-2454-000 (June 6, 2025).
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operated outside a Commission-jurisdictional process and
“interfered” with the Commission’s authority to establish interstate
wholesale rates.248
Similarly, PJM’s Tariff states that PJM will identify the MW quantity in a zone/area
that will be eligible for load reduction under IRAS, but expressly places the responsibility
on Electric Distributors to coordinate with relevant states and/or RERRAs, as well as LSEs
and LSE customers, including Large Loads, to determine which retail customers will
respond to PJM’s directive to reduce load.249 If approved by the Commission, the division
of responsibility reflected in the Tariff would be on file and remain subject to the
Commission’s authority pursuant to FPA sections 205 and 206.
As the Commission has previously observed, PJM’s resource adequacy framework
requires that the Commission “recognize the traditional role of state and local entities in
regulating resource adequacy” while also remaining “aware of [its] responsibilities under
the FPA to ensure that adequate service is provided, and that wholesale rates are just and
reasonable.”250 Thus, the Commission found that the appropriate course of action has been
to “defer to state and local entities’ decisions when possible on resource adequacy matters,
but in doing so . . . not shirk our congressionally-mandated responsibilities.”251 The
division of responsibilities embedded in the proposed IRAS framework is a balanced
248 Midcontinent Indep. Sys. Operator, Inc., 192 FERC ¶ 61,064, at P 99 (2025) (distinguishing Hughes v.
Talen Energy Mktg., LLC, 578 U.S. 150, 163 (2016)), order addressing arguments raised on reh’g, 194
FERC ¶ 61,050 (2026).
249 Proposed Tariff, Attachment DD-4, section III(c).
250 PJM Interconnection, L.L.C., 119 FERC ¶ 61,318, at P 40 (2007) (requiring PJM to “allocate costs to data
centers” in a manner similar to that as urged in the NEDC/PJM Governors’ Principles at 1), aff’d sub nom.
Pub. Serv. Elec. & Gas Co. v. FERC, 324 F.App’x 1 (D.C. Cir. 2009).
251 PJM Interconnection, 119 FERC ¶ 61,318 at P 40.
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approach that reflects the well-considered divide between PJM and state/RERRA
authorities over load reduction programs.
5.
Reducing New Large Loads before Pre-Emergency Load
Management Reductions (EEA1) is not unduly discriminatory or
preferential.
The IRAS framework strikes a straightforward bargain. In Delivery Years when
the influx of Eligible New Large Loads gives rise to a PJM Region-wide Reliability
Requirement shortfall, New Large Loads without arrangements with new capacity will
nevertheless be permitted to interconnect, and thus achieve “speed to power,” on the
condition that their MW quantity of load is counted toward the MW potentially reduced
during certain emergency conditions pursuant to IRAS. These Eligible New Large Load
customers will be compensated under the IRAS framework to the extent that they reduce
load pursuant to IRAS and do not waive compensation. The bargain is limited in scope
and applies only to Eligible New Large Loads in years where their addition to the PJM
system gives rise to an observed shortfall.252 The LSEs serving these Eligible New Large
Load customers, which receive NITS, will—like other NITS customers—have their
transmission service curtailed after non-firm customers, but they may be asked to reduce
load prior to other NITS customers in accordance with the Interim Resource Adequacy
Service they may be asked to provide. At bottom, the IRAS framework recognizes that
New Large Loads are not similarly situated to other loads, and reducing New Large Loads
before Pre-Emergency Load Management Reductions (EEA1) is not unduly discriminatory
or preferential. To that end, Members of Congress have expressed to PJM that “[i]t is not
252 Proposed Tariff, Attachment DD-4, sections IV(b)(i)-(ii).
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unduly discriminatory to identify and manage demand from new data centers given their
incomparably large energy demands, how quickly data centers can come online, and their
unique potential to impact the reliability of the electric grid as a collective class and to
increase rates for all other customers.”253
a.
New Large Loads are not similarly situated to other loads in
the PJM Region, constitute a separate, new class of load, and
are therefore appropriately subject to different treatment.
Requiring New Large Loads to reduce load before other NITS customers is not
unduly discriminatory or preferential. In accordance with longstanding precedent,
“[w]hether a rate or practice is unduly discriminatory depends on whether it provides
different treatment to different classes of entities and turns on whether those classes of
entities are similarly situated.”254 When differences in treatment “can be explained by
some factor deemed acceptable to regulators (and the courts)”255 or “are predicated upon
factual differences between customers,”256 they are justified and therefore not unduly
discriminatory nor preferential.
253 Letter from the Members of Congress to David E. Mills, PJM Board Chair, PJM Interconnection, L.L.C.,
4
(Nov.
5,
2025),
https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-
disclosures/2025/20251106-congressional-letter-re-cifp-lla.pdf [https://perma.cc/ZKA9-Q5LZ].
254 Calpine Corp. v. PJM Interconnection, L.L.C., 171 FERC ¶ 61,035, at P 318, order on compliance,
granting waiver request, addressing arguments raised on reh’g & setting aside prior order, in part, 173
FERC ¶ 61,0061 (2020), order on compliance & clarification, 174 FERC ¶ 61,036, order setting aside prior
order, in part, 174 FERC ¶ 61,109 (2021).
255 Town of Norwood v. FERC, 202 F.3d 392, 402 (1st Cir. 2000) (“[D]ifferential treatment does not
necessarily amount to undue preference where the difference in treatment can be explained by some factor
deemed acceptable by the regulators (and the courts).” (citation omitted)).
256 Newark v. FERC, 763 F.2d 533, 546 (3d Cir. 1985) (“[D]ifferences in rates are justified where they are
predicated upon factual differences between customers.”).
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New Large Loads are not similarly situated to other loads in the PJM Region.
According to the Commission, large loads constitute “a separate category of load.”257 In
this case, the Commission has justified the differential treatment of New Large Loads,
which is predicated on factual differences between customers. In fact, in recognition of
this distinction, the Commission has required all RTOs/ISOs, including PJM, to define the
term “large load” in their respective tariffs.258
In support of large loads being treated as a separate category of load, the
Commission has highlighted the uniqueness of large loads, noting specifically that their
integration “poses specific challenges to transmission system operation given their size,
operational behavior, and unique potential to impact the transmission system.”259
Furthermore, the Commission has found that the records in the recent proceedings
involving large loads “illustrate a host of urgent challenges associated with providing the
transmission service needed to serve the ongoing influx of large loads while maintaining
reliability and affordability. In particular, stakeholders have expressed concerns that large
loads are not efficiently and appropriately integrated onto the transmission system; have
identified a number of unique challenges that large load integration poses for the reliable
operation of that system; and have debated how best to ensure that the rates, terms, and
conditions of transmission service remain just and reasonable as more and more large loads
257 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 50; FPA section 215, 16 U.S.C. § 824o.
258 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 58; Midcontinent Indep. Sys. Operator, Inc.,
195 FERC ¶ 61,212, at P 58 (2026); Sw. Power Pool, 195 FERC ¶ 61,213 at P 15 & n.54; Cal. Indep. Sys.
Operator Corp.,195 FERC ¶ 61,214, at P 57 (2026); ISO New Eng. Inc., 195 FERC ¶ 61,215, at P 56 (2026);
N.Y. Indep. Sys. Operator, Inc., 195 FERC ¶ 61,216, at P 64 (2026).
259 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 58.
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are onboarded onto that system.”260 Recently, the Commission, in finding SPP’s CHILLS
proposal for new large loads just and reasonable and not unduly discriminatory or
preferential, the Commission observed that “SPP has shown that unprecedented growth in
large loads in the SPP region presents significant and unique operational and planning
challenges.”261 Likewise, in the last two Delivery Years, since the influx of new large
loads, consisting primarily of data centers, PJM has cleared short of its PJM Region
Reliability Requirement in the face of exponential load growth. Challenges that are driven
by the rapid addition of New Large Loads in PJM have called for PJM to respond
accordingly with the slate of initiatives discussed above in Part I.C.
b.
IRAS is only applicable in Delivery Years when New Large
Loads without arrangements with new capacity give rise to
a PJM Region Reliability Requirement shortfall and
provides opportunities for New Large Loads to avoid being
subject to load reduction under IRAS.
The applicability of IRAS is limited and narrowly tailored. Where the Commission
has found the treatment of large loads to be “tailored to the specific and unique nature of”
of large loads, and “narrowly tailored to reflect the . . . unique characteristics” of such
loads, the Commission has found that treatment just and reasonable and not unduly
discriminatory or preferential.262
First, IRAS is limited to years in which the PJM Region experiences a resource
adequacy shortfall. IRAS will only apply in Delivery Years where the amount of
committed Capacity Resources is less than the Updated PJM Region Reliability
260 June 2026 Order to Show Cause, 195 FERC ¶ 61,211 at P 1.
261 Sw. Power Pool, 195 FERC ¶ 61,196 at P 84.
262 Sw. Power Pool, 195 FERC ¶ 61,196 at PP 85, 87.
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Requirement. Thus, it is only applicable when New Large Loads that have not brought
their own capacity and have not been allocated sufficient RBP UCAP MW cause a PJM
Region Reliability Requirement shortfall.
Second, New Large Loads may significantly mitigate the possibility of being called
on to reduce load pursuant to IRAS by, for example, entering into arrangements with new
capacity and working with their states to craft retail curtailment tariffs that may minimize
disruption to data centers while protecting remaining native load.263 Thus, New Large
Loads have the flexibility to engage in self-sufficiency to avoid or, at least, reduce the
possibility of being called on to reduce load during an Interim Resource Adequacy Service
Action.
Third, IRAS was developed to address the specific and unique issues caused by
New Large Loads in the PJM Region, while also enabling New Large Loads to nevertheless
be served by PJM.
Fourth, while PJM uses the Large Load Registry at the outset to establish Eligible
New Large Load Amounts attributable to each zone/area in the PJM Region for each
Delivery Year, PJM’s reliance on the actual identities of those New Large Loads stops
there. In other words, once PJM has determined, for the Delivery Year and based on the
Large Load Registry, the MW quantity of resource adequacy shortfall in each zone/area
based on New Large Loads in each zone/area that have not entered into arrangements with
new capacity, PJM’s operational directives will direct load reduction of certain MW
quantities in certain zones/areas, not specific New Large Loads in those zones/areas.
263 See VA SCC and DCC Letter at 2.
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During real-time operations, PJM will direct Electric Distributors to reduce MW
quantities of load in specific zones/areas under pre-emergency and emergency conditions,
PJM will not direct specific New Large Loads to be reduced—albeit, states may, of course,
establish and enforce their own retail load reduction programs. The IRAS framework does
not single out New Large Loads for reduction because they are new or large. Rather, IRAS
is focused on the reliability shortfall that is the result of the influx of these New Large
Loads. IRAS is furthermore focused on responding accordingly with appropriate load
reductions in the zones/areas with load to reduce. Under conditions of tightening supply
and demand, it is a measured and well-considered response to permit the new demand
causing the shortfall on the system to interconnect, subject to load reduction under limited
emergency conditions, but receive compensation for that load reduction.264 While the
IRAS framework gives rise to differences in the treatment of New Large Loads and other
loads, the difference is meaningfully grounded in the fact that the current rapid growth in
Large Loads are fundamentally different from the historical load growth, in both their
inherent concentration of demand and the rapidity at which their cumulative demands have
grown throughout PJM. These two factors are the cause of the recent reliability shortfall.265
264 See, e.g., Tenaska Clear Creek Wind, LLC v. Sw. Power Pool, Inc., 183 FERC ¶ 61,043, at P 24 (2023)
(finding that an “interconnection customer is differently situated from interconnection customers that have
not caused the need for the network upgrades. This difference may justify that interconnection customer’s
generating facility being subject to curtailment if it operates the generating facility prior to completion of the
network upgrades when another is not so situated. Subjecting the interconnection customer that causes the
need for upgrades in this manner ensures that the interconnection customer, bears the system-reliability
burdens that flow from its decision to operate prior to completion of the required network upgrades.”
(footnote omitted)).
265 See Independent Market Monitor for PJM, Analysis of the 2027/2028 RPM Base Residual Auction Part
A,
Monitoring
Analytics,
2-3
(Jan.
5,
2026),
https://www.monitoringanalytics.com/reports/Reports/2026/IMM_Analysis_of_the_20272028_RPM_Base
_Residual_Auction_Part_A_20260105.pdf [https://perma.cc/SM2E-KMTW] (“The capacity shortfall in
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Honorable Debbie-Anne A. Reese
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As such and, if they do not build, buy, or bring their own capacity, should be reduced,
accordingly, should emergency conditions require it. Thus, the IRAS framework is not
motivated by any desire to single out New Large Loads for reduction because of their size
or vintage, but rather for the valid and legitimate reason that New Large Loads have led to
periods of insufficient resource adequacy and should, justifiably, play a significant role in
the remedy.266
c.
Load reduction under Interim Resource Adequacy Service
appropriately treats New Large Loads as NITS customers.
LSEs, which take service under NITS, serve their Eligible New Large Load
customers. In the event of an Emergency Procedure IRAS Service Alert, Warning, and
Action, the LSEs serving Eligible New Large Load customers—like other NITS customers
in PJM—will only be called on to reduce load after non-firm transmission service products.
As described above in Figure 2, PJM intends to amend its Manuals to include a new
category of Emergency Procedure, in which PJM may require that a load reduction up to
the quantity of Eligible New Large Load (Potential EEA1) in a zone/area before calling for
Pre-Emergency Load Management Reductions (EEA1).
both the 2026/2027 and the 2027/2028 BRAs was a result of new data center load and forecast increases in
existing data center load and the already existing demand from large data centers.”).
266 See, e.g., PJM Interconnection, L.L.C., 167 FERC ¶ 61,114, at P 28 (2019) (finding that limiting
participation in Peak Shaving Adjustment Program to resources governed by tariff or adopted by a RERRA
not unduly discriminatory “because [Electric Distribution Companies (“EDCs”)] with RERRA-sponsored
load curtailment programs are not similarly situated to EDCs without RERRA-sponsored load curtailment
programs. . . . PJM has sufficiently demonstrated that the RERRA-sponsorship requirement is just and
reasonable because it provides PJM with greater confidence in the durability of the peak-shaving program,
as load reductions provided by RERRA-sponsored resources are more likely to continue over time, creating
stability in load forecasts, which in turn will ensure efficient transmission planning and resource
investment.”).
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PJM Manual 13 already requires resource types taking NITS to prevent a Manual
Load Dump (at EEA3) by reducing load in a sequential order. Today, for example, sites
registered in the PJM demand response program as a Demand Resource may be called on
to reduce load in Pre-Emergency and Emergency Load Management Reduction Actions
before firm exports are reduced in a Maximum Generation Emergency (EEA2). Nor is
sequential load reduction or dispatch unique to PJM.267 As part of IRAS, PJM is simply
proposing to add another category of resources that would precede the Demand Resources
and DER Capacity Aggregation Resources called on to reduce load in Pre-Emergency and
Emergency Load Management Reduction Actions.
E.
Compensation for Load Reduction Under Interim Resource Adequacy
Service
1.
The proposed IRAS compensation approach respects and reflects
the federal and state division of authority and responsibilities.
As part of the proposed IRAS framework, Electric Distributors bear the
responsibility to implement the compensation scheme for New Large Loads that provide
the IRAS load reduction service. A representative class of these New Large Loads are
signatories to the Ratepayer Protection Pledge that committed to “[c]ontribut[e] to
[e]lectric and [c]ommunity [r]esilience” by “coordinat[ing] with grid operators to
contribute to a more reliable grid.”268 IRAS reflects such coordination at a just and
reasonable rate.
267 Voltus, Inc., 190 FERC ¶ 61,008, at P 17 (2025) (noting that in MISO, “[Emergency Demand Resources]
are dispatched after [Load Modifying Resources] in times of more acute need”).
268 Ratepayer Protection Pledge; July 2026 Ratepayer Protection Pledge Update (identifying 282 utilities,
cooperatives, data centers, and 23 governors that joined the Ratepayer Protection Pledge, including 38 data
centers).
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PJM is proposing a rate for IRAS that is equal to 50% of the Non-Performance
Charge Rate. However, the wholesale IRAS rate is flexible and can be further reduced to
less than 50% of the Non-Performance Charge Rate if the Eligible New Large Load accepts
in its retail rate a sum less than 50% of the Non-Performance Charge Rate. As discussed
below, PJM’s proposal provides Electrical Distributors and states flexibility in the
applicable IRAS rate for its territory, and affords the New Large Load the ability to waive
compensation. Indeed, a rate of zero dollars for IRAS would apply where Eligible New
Large Loads waive in their retail rates receipt of compensation for the provision of
wholesale Interim Resource Adequacy Service—an outcome that would be consistent with
the Ratepayer Protection Pledge signatories’ commitment “to protect American consumers
from price hikes due to data center energy and infrastructure requirements, and lower
electricity costs for consumers in the long term.”269
a.
The proposed IRAS rate is just and reasonable.
PJM proposes to extend the rate applicable for Pre-Emergency Load Response non-
performance (and conversely for bonus payments)—50% of the Non-Performance Charge
Rate—as the maximum rate for IRAS performance.270 The Commission recently accepted
this rate.271 In that proceeding, PJM explained that the rate is appropriate for non-
performance or under-performance by Pre-Emergency Load Response Program
269 Ratepayer Protection Pledge.
270 See proposed Tariff, Attachment DD-4, section X(a) (“The rate for the provision of Interim Resource
Adequacy Service shall be 50% of the Non-Performance Charge Rate specified in Tariff, Attachment DD,
section 10A(e), unless any Eligible New Large Load elects to (i) accept in its retail rates a sum less than 50%
of the Non-Performance Charge Rate as compensation for the provision of wholesale Interim Resource
Adequacy Service, or (ii) waive receipt in its retail rates any compensation for the provision of wholesale
Interim Resource Adequacy Service as contemplated by Tariff, Attachment DD-4, section X(c).”).
271 PJM Interconnection, L.L.C., 195 FERC ¶ 61,253 (2026).
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Participants as it reflects that the PJM system is at an earlier stage of emergency conditions,
so the system conditions are not as severe, so the value of the load reduction, while still
substantial, is also not as high as during a Performance Assessment Interval.272 From a
customer perspective, the non-performance rate appropriately reflects that load paid for
capacity but did not get the benefit of the Pre-Emergency Load Response Program that
PJM called upon at a time when the PJM system was in stressed system conditions.273 The
monies collected in this instance were, generally speaking, allocated to demand resources
that overperformed during such events (i.e., bonus payments), if applicable, with residual
monies collected in certain situations reverting to LSEs that did not get the benefit of the
load response service for which they paid.274
This recently accepted rate is a just and reasonable analog for the wholesale rate
PJM proposes here for IRAS. As Mr. Pilong explains, IRAS would be called at the
emergency conditions similar to when Pre-Emergency Load Response is called today.275
Indeed, Mr. Pilong explains that IRAS load reductions would now be introduced just before
the Pre-Emergency Load Reduction Actions.276 Thus, similar to the Pre-Emergency Load
Response Program, IRAS load is reduced at an earlier stage of emergency conditions and
the 50% reduction on the Non-Performance Charge Rate also reflects that the current
272 PJM Interconnection, L.L.C., Proposal to Enhance Performance of Load Management Resources and
Price Responsive Demand Providers During Non-Performance Assessment Interval Events of PJM
Interconnection, L.L.C., Docket No. ER26-2319-000, Transmittal Letter at 11 (Apr. 27, 2026).
273 PJM Interconnection, L.L.C., 195 FERC ¶ 61,253.
274 See PJM Interconnection, Proposal to Enhance Performance of Load Management Resources and Price
Responsive Demand Providers During Non-Performance Assessment Interval Events of PJM
Interconnection, L.L.C., Docket No. ER26-2319-000, Transmittal Letter at 17.
275 See Pilong Aff. ¶ 26.
276 See Pilong Aff. ¶ 26.
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Tariff-stated value of load reductions at these system conditions, i.e., where there is not
sufficient available economic real-time supply “to maintain reserves to meet applicable
Reserve Requirements and/or Interconnection Reliability Operating Limits within
prescribed limits and prevent cascading outages.”277
b.
Electric Distributors bear the responsibility, in conjunction
with applicable state authorities and New Large Loads, to
implement the compensation scheme.
The IRAS rate is compensation for a wholesale load reduction service, but the
entities to be paid the rate and the loads to be charged to support such compensation must
be determined at the state level consistent with the Electric Distributor’s state-approved
load reduction plans and other state-approved programs, rates, and rules. As such, the
IRAS rate is intended to be conjoined with retail rates and ultimately paid to Eligible New
Large Loads that reflects a discount on capacity costs commensurate with the impact of
Interim Resource Adequacy Service on addressing resource adequacy issues. The net
result is a reduced capacity charge for Eligible New Lage Loads, and thus a “practice . . .
in which operators of wholesale markets pay electricity consumers for commitments not to
use power at certain times” and thus “directly” affects wholesale capacity rates assessed.278
This compensation for load reduction under IRAS is not unduly discriminatory or
preferential. As the Commission has recognized in recent landmark decisions (and as
further discussed above), New Large Loads are a separate, unique class of load.279 PJM’s
277 Proposed Tariff, Attachment DD-4, section I(b).
278 See EPSA, 577 U.S. at 261, 265.
279 See, e.g., June 2026 Order to Show Cause, 195 FERC ¶ 61,211; December 2025 Show Cause Order, 193
FERC ¶ 61,217; Sw. Power Pool, 195 FERC ¶ 61,213; Sw. Power Pool, 195 FERC ¶ 61,196; Sw. Power
Pool, 194 FERC ¶ 61,031.
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IRAS framework advances the Commission’s policy set forth in those orders that the
RTO/ISO tariff should be modified to support the integration of this class of load to the
PJM Region. As a term of interconnection, for loads that have not brought their own
capacity and cause unprecedented strain on the system, PJM is facilitating their
interconnection subject to IRAS. New Large Loads may achieve the “speed to power” they
desire and interconnect to the transmission system, but must either bring their own capacity
or provide IRAS—a service for which there will be a compensation mechanism. In sum,
New Large Loads are eligible to take this new service at a just and reasonable rate to the
extent they elect to interconnect without BYONC to meet their resource adequacy needs.
Alternatively, the proposal does not foreclose Eligible New Large Loads from foregoing
any available wholesale IRAS compensation through appropriate engagement with Electric
Distributors.280 This engagement would occur at the state level.281 In these cases where
IRAS credits in the retail rates are waived, the wholesale IRAS rate will be reduced to zero
dollars, as allowed under the proposed language.282 This is a just and reasonable rate. And
importantly, including a zero-dollar rate aspect of the proposal is consistent with the
Ratepayer Protection Pledge’s tenet that New Large Loads “will voluntarily negotiate new,
separate rate structures with their utilities and relevant State governments wherever they
280 See proposed Tariff, Attachment DD-4, section X(a) (“If any Eligible New Large Load so elects to accept
less than 50% of the Non-Performance Charge Rate or waives in its entirety receipt of compensation for the
provision of wholesale Interim Resource Adequacy Service, the wholesale rate for the provision of Interim
Resource Adequacy Service shall reflect the accepted sum less than 50% of the Non-Performance Charge
Rate or if compensation is waived entirely, the rate shall be zero dollars.”).
281 PJM understands that in traditional, non-restructured states, the Electric Distributor also doubles as the
LSE for the New Large Load, while in restructured states, the LSE may be an independent entity, not
affiliated with the Electric Distributor.
282 See proposed Tariff, Attachment DD-4, section X(a).
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build data centers. Importantly, they will pay these rates for the power and related
infrastructure that are brought online to service their data centers, whether they use the
electricity or not. . . . This will protect the American people from increased utility bills as
a result of the development of these data centers.”283 PJM’s proposal also allows Eligible
New Large Loads to agree upon a retail rate between 50% of the Non-Performance Charge
Rate and zero dollars, to further facilitate implementation of the Ratepayer Protection
Pledge and retail level arrangements.284
Under PJM’s proposal, how this wholesale rate is used to compensate for IRAS and
how it is used to collect monies for such compensation will be left to the Electric
Distributors that directed the specific load reductions to implement IRAS, consistent with
their state-approved program, and that can identify the beneficiaries in their zone/area of
such load reduction. In this way, how the compensation scheme will work in practice relies
on application of state retail law.285 Whether a specific New Large Load may be entitled
to compensation for provision of IRAS will be determined by state authorities under state
law or RERRA as may be applicable. The program will be administered by the Electric
Distributor in coordination with the relevant state authorities or RERRA. That said, PJM’s
proposal imposes no obligation on any state to do anything. States are free to design retail
rate regimes that facilitate the recovery and allocation of wholesale IRAS rates through
generally applicable retail rate tariffs. Alternatively, if states decline to act generically,
they could negotiate specific retail filed rates with affected entities. Further still, if states
283 Ratepayer Protection Pledge.
284 See proposed Tariff, Attachment DD-4, section X(a).
285 See proposed Tariff, Attachment DD-4, section X(b)(i).
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decline to act, Eligible New Large Loads could initiate regulatory proceedings to develop
retail pathways to recover wholesale IRAS rates. Or, if states decline to act and Eligible
New Large Loads decline to initiate regulatory proceedings to recover through retail rates
the wholesale IRAS rate, they would effectively waive a right to compensation.286 Under
PJM’s proposal, the wholesale rate can flow into retail rates outside the PJM settlements
realm.287 Alternatively, Electric Distributors, in consultation with their state regulators,
can request PJM’s support in implementing payment of the wholesale rate to Eligible New
Large Loads and/or collection of charges to fund such compensation.288 Other potential
flexibility might exist. The key takeaway is that PJM is not mandating any action at the
retail or state level.
In sum, PJM’s proposal imposes responsibilities on individual entities, and not the
states themselves. While it enlists and invites state action through their jurisdictional retail
processes, it does not mandate any state-specific action, nor does it require any specific
terms and conditions on retail service. PJM’s proposed federal filed rate facilitates and
respects the handoff of responsibilities between federal wholesale rate development and
state retail rate implementation. PJM’s proposed framework avoids the potential for
conflicts with state policy determinations and jurisdictional domains. PJM’s proposal
advances a framework that is consistent with the Commission’s decision in the demand
286 Indeed, PJM is proposing to include in the compensation rules the following proviso: “Nothing in this
Tariff, Attachment DD-4, section X shall interfere with any Eligible New Large Load’s election to (i) accept
in its retail rates a sum less than 50% of the Non-Performance Charge Rate as compensation for the provision
of wholesale Interim Resource Adequacy Service, or (ii) waive receipt in its retail rates any compensation
for the provision of wholesale Interim Resource Adequacy Service.” Proposed Tariff, Attachment DD-4,
section X(c).
287 Proposed Tariff, Attachment DD-4, section X(b)(i).
288 Proposed Tariff, Attachment DD-4, section X(b)(ii).
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response context to respect state law choices about whether and how to facilitate
implementation of a wholesale paradigm, even one that indirectly affects retail rates when
the wholesale rate flows back into retail rate structures.289 As in the demand response
context, PJM’s proposed framework promotes durability and encourages federal-state
communication and partnership without “plac[ing] an undue burden on state and local retail
regulatory entities, or . . . rais[ing] new concerns regarding federal and state
jurisdiction.”290
2.
The proposed billing indemnification language is just and
reasonable.
PJM is also proposing indemnification language as part of this compensation
framework to make clear that neither PJM nor the PJM membership, generally, is
financially responsible for any potential defaults that may arise in association with the
billing of this compensation.291 Thus, if a state-approved rate requires collection of the
compensation for interruption under an IRAS Event from other LSEs, for example, and a
LSE does not pay as required (whether billed directly by the Electric Distributor or by PJM
upon request of the Electric Distributor), the default will not pass to the PJM membership.
In the event the Electric Distributor requests that PJM facilitates the billing for an IRAS
289 Wholesale Competition in Regions with Organized Electric Markets, Order No. 719, 125 FERC ¶ 61,071,
at P 154 (2008) (requiring “RTOs and ISOs to amend their market rules as necessary to permit an [aggregator
of retail customers] to bid demand response on behalf of retail customers directly into the RTO's or ISO's
organized markets, unless the laws or regulations of the relevant electric retail regulatory authority do not
permit a retail customer to participate”); Order No. 719-B, 129 FERC ¶ 61,252 at P 5 (requiring “RTOs and
ISOs to amend their market rules as necessary to permit an aggregator of retail customers (ARC) to bid
demand response on behalf of retail customers directly into the RTO’s or ISO’s organized wholesale markets,
unless the laws or regulations of the relevant electric retail regulatory authority do not permit a retail customer
to participate”).
290 Order No. 719, 128 FERC ¶ 61,059 at P 155.
291 See proposed Tariff, Attachment DD-4, section X(b)(iii).
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Event, such billing will be viewed as a bilateral transaction between the Electric Distributor
and the other party and any default shall be assessed to the Electric Distributor. This
language is just and reasonable because it minimizes risk to PJM and its members, and is
consistent with other similar language the Commission has accepted in other parts of PJM’s
Governing Agreements.292
F.
Consistent with the Ratepayer Protection Pledge, PJM Is Proposing to
Exclude New Large Loads from the VRR Curve Until They Bring New
Capacity.
PJM is proposing that, beginning with the 2029/2030 Delivery Year, PJM will
exclude from the demand curve (i.e., the VRR Curve used in RPM Auctions) the MW of
New Large Loads that have not entered into BYONC arrangements or do not have
Allocated RBP UCAP MW, over and above the MW of New Large Loads that were
included in the load forecast for the 2028/2029 Delivery Year.293
New Large Loads have, pursuant to the Ratepayer Protection Pledge, committed to
“build, bring, or buy the new generation resources and electricity needed to satisfy their
new energy demands” and “add more capacity that serves the broader public by increasing
supply” in order to “advance[] self-sufficiency and protect[] Americans from higher
292 See, e.g., Tariff, Attachment K-Appendix, section 5.2.2(d)(v) (“The LLC, PJMSettlement, and the
Members will not assume financial responsibility for the failure of a party to perform obligations owed to the
other party under such a bilateral agreement reported to the Office of the Interconnection under this” Tariff
and Operating Agreement provision.).
293 PJM Board directs that “[i]ncremental [N]ew Large Loads relative to the forecast utilized for the
2028/2029 BRA . . . from the forecast used in future RPM auctions for the 2029/2030 Delivery Year and
beyond unless and until there are new supply resources offered into an RPM auction in sufficient quantity to
cover the [individual] new Large Load.” CIFP Framework for Service at 5.
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prices.”294 Thus, to the extent that New Large Loads come online, PJM expects that these
loads will either “build, bring, or buy” new generation and capacity to serve their needs.
New Large Loads that have not entered into BYONC arrangements or do not have
Allocated RBP UCAP MW will be excluded from the VRR Curve starting with the
2029/2030 Delivery Year regardless of whether PJM is experiencing a shortfall that
triggers IRAS in the relevant Delivery Year. Including the quantity of New Large Loads
that have not entered into BYONC arrangements or do not have Allocated RBP UCAP
MW in the VRR Curve would fail to recognize that New Large Loads have committed to
“build, bring, or buy the new generation resources and electricity needed to satisfy their
new energy demands” and “add more capacity that serves the broader public by increasing
supply.”295 Excluding the quantity of New Large Loads that have not entered into BYONC
arrangements or do not have Allocated RBP UCAP MW from the VRR Curve, on the other
hand, recognizes the commitment of New Large Loads to cover their own energy and
294 Ratepayer Protection Pledge; Ratepayer Protection Pledge Announcement; July 2026 Ratepayer
Protection Pledge Update (identifying 282 utilities, cooperatives, data centers, and 23 governors that joined
the Ratepayer Protection Pledge, including 38 data centers: Aligned Data Centers, LLC; Amazon.com, Inc.;
Beale Infrastructure Group, LLC; CleanSpark LLC; Cloud HQ LLC; Cologix, Inc.; Compass Datacenters,
LLC; Core Scientific, Inc.; CoreWeave, Inc.; Corscale, LLC; Crusoe Technologies LLC; CyrusOne, Inc.;
DataBank Holdings, Ltd.; Digital Realty Trust, Inc.; EdgeConnex Inc.; EdgeCore Digital Infrastructure (d/b/a
EdgeCore Internet Real Estate, LLC); Equinix, Inc.; Google (d/b/a Alphabet Inc.); Iron Mountain
Incorporated; Meta Platforms, Inc.; Microsoft Corporation; Nebius Group N.V.; NTT Global Data Centers
(d/b/a NTT DATA, Inc.); OpenAI, L.L.C.; Oracle Corporation; Oppidan Connect Data Centers (d/b/a
Oppidan Investment Company); Prologis, Inc.; Quality Technology Services, LLC; Rowan Digital
Infrastructure Pty. Ltd.; Skybox Datacenters, LLC; STACK Infrastructure, Inc.; Starwood Digital Ventures
(d/b/a Starwood Capital Operations, LLC); Stream Data Centers, L.P.; Switch, Inc.; T5Data Centers, LLC;
TA Realty LLC; Vantage Data Centers Management Company, LLC; and x.AI LLC).
295 Ratepayer Protection Pledge; Ratepayer Protection Pledge Announcement; July 2026 Ratepayer
Protection Pledge Update.
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capacity needs to “advance[] self-sufficiency and protect[] Americans from higher
prices.”296
Furthermore, in Delivery Years when there is a reliability shortfall and IRAS is
triggered, to the extent these New Large Loads have not entered into BYONC
arrangements or been Allocated RBP UCAP MW, their demand will be treated as Eligible
New Large Load Amounts—that is, MW quantities that are eligible to provide IRAS by
virtue of not having either entered into BYONC arrangements or having Allocated RBP
UCAP MW. When an Eligible New Large Load interconnects subject to Interim Resource
Adequacy Service, that New Large Load is, indeed, availing itself to an interim solution—
which permits the Eligible New Large Load to obtain service while simultaneously
permitting PJM to maintain grid reliability and resource adequacy—even before the New
Large Loads’ BYONC arrangements are online and even if the New Large Loads are
without Allocated RBP UCAP MW in that particular Delivery Year.
Once New Large Loads have met their commitment to build, bring, or buy capacity
to meet their own needs—whether through BYONC or an assignment of RBP UCAP MW
for the Delivery Year—the VRR Curve will incorporate the demand from the New Large
Load, as well as the supply that it has committed to provide for purposes of meeting the
demand it creates on the PJM system. A New Large Load that was previously eligible for
IRAS because it previously had not entered into BYONC arrangements will begin to be
296 Ratepayer Protection Pledge; Ratepayer Protection Pledge Announcement; July 2026 Ratepayer
Protection Pledge Update.
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included in the forecast for the same RPM Auction that its BYONC arrangement will be
offered into the RPM Auction.297
1.
Excluding incremental New Large Load Amounts from the demand
curve beginning with the 2029/2030 Delivery Year
PJM is proposing two new Tariff definitions, “Excluded RTO New Large Load
Amounts” and “Excluded Locational Deliverability Area (“LDA”) New Large Load
Amounts” to mean the UCAP MW quantity of New Large Load that will not be reflected
in the VRR Curve starting with the 2029/2030 Delivery Year. The definitions are as
follows:
• “Excluded RTO New Large Load Amounts” shall mean, converted in UCAP
terms by using the Forecast Pool Requirement and exclusive of any load in an
FRR Service Area, [the sum of all New Large Loads across the PJM Region in
the load forecast for the relevant Delivery Year] minus [New Large Loads
across the PJM Region that were included in the load forecast used for the
2028/2029 Delivery Year] minus [the total MW quantity of New Large Load
that is added on or after the 2029/2030 Delivery Year and is (i) in an
arrangement with BYONC in the RTO or (ii) assigned Allocated RBP UCAP
MW in the RTO].298
• “Excluded LDA New Large Load Amounts” shall mean, converted in UCAP
terms by estimating the impact on required imports to a Locational
Deliverability Area and exclusive of any load in an FRR Service Area, [the sum
of all New Large Loads in the relevant Locational Deliverability Area that were
included in the load forecast for the relevant Delivery Year] minus [New Large
Loads in the relevant Locational Deliverability Area that were included in the
load forecast used for the 2028/2029 Delivery Year] minus [the total MW
quantity of New Large Load that is added on or after the 2029/2030 Delivery
Year and is (i) in an arrangement with BYONC in the Locational Deliverability
Area or (ii) assigned Allocated RBP UCAP MW in Locational Deliverability
Area].299
297 Proposed Tariff, Attachment DD, section VII.
298 Proposed Tariff, Definitions – Excluded RTO New Large Load Amounts.
299 Proposed Tariff, Definitions – Excluded LDA New Large Load Amounts.
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To calculate the Excluded RTO New Large Load Amounts and the Excluded LDA
New Large Load Amounts, first, begin with the sum of all New Large Loads across the
PJM Region or in the relevant LDA in the load forecast for the relevant Delivery Year.
Second, subtract out the quantity of New Large Load in the load forecast for the
2028/2029 Delivery Year for either the RTO or relevant LDA. It is necessary to subtract
this amount because the BRA for the 2028/2029 Delivery Year, which took place in July
2026, was the last auction conducted prior to this proposal. Because that auction predates
this proposal, it relied on a load forecast that included all loads, including New Large Loads
that had not entered into BYONC arrangements or have Allocated RBP UCAP MW, in the
demand curve. As a result, the quantities of New Large Loads incorporated into the load
forecast for the 2028/2029 Delivery Year are an appropriate reference point for measuring
the incremental quantity of New Large Loads in the load forecast, beginning with the
2029/2030 Delivery Year.300 This results in the incremental MW value of New Large Load
for the relevant Delivery Year.
Third, subtract the total MW quantity of New Large Load for the RTO or relevant
LDA that is added on or after the 2029/2030 Delivery Year that has either entered into a
BYONC arrangement or has Allocated RBP UCAP MW for that Delivery Year.
Fourth, as the above definitions reflect, Excluded RTO New Large Load Amounts
and Excluded LDA New Large Load Amounts will be represented in UCAP terms. Thus,
to determine the Excluded RTO New Large Load Amounts, the resulting value of the above
300 PJM proposes to maintain the inclusion of all New Large Loads in the demand curve for the remaining
Incremental Auctions associated with the 2027/2028 and 2028/2029 Delivery Years to maintain consistency
with those loads being included in the demand curve for the corresponding BRAs that have already been
completed.
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steps will be converted into UCAP terms by multiplying the calculated amount by the
Forecast Pool Requirement. Likewise, to determine the Excluded LDA New Large Load
Amounts, the resulting value of the above steps will be converted into UCAP terms by
multiplying the value by an estimated impact factor on required imports to an LDA.
Load in FRR Service Areas will continue to not be included in the VRR Curve, as
FRR Entities already provide capacity for all load, including New Large Loads, in their
FRR Service Areas.
The Excluded RTO New Large Load Amounts and Excluded LDA New Large
Load Amounts, which are the UCAP MW that are not reflected in the RTO-wide VRR
Curve and the VRR Curve for each LDA, respectively, should only reflect the incremental
MW value of New Large Loads without BYONC or Allocated RBP UCAP MW in the
PJM Region or the relevant LDA. As noted above, the quantity of New Large Loads will
be reflected in the VRR Curve beginning with the same RPM Auction that the associated
BYONC is offered for the first time.
The UCAP MW of New Large Loads that are not associated with qualifying
BYONC or Allocated RBP UCAP MW are expected to build, bring, or buy their own
generation and capacity to support their needs. During a Delivery Year in which IRAS is
in effect, these quantities of New Large Loads that have not entered into BYONC
arrangements or does not have Allocated RBP UCAP MW may, in the interim, be subject
to load reduction pursuant to IRAS. Nevertheless, as proposed, the UCAP MW of New
Large Loads without BYONC or Allocated RBP UCAP MW—whether or not subject to
IRAS—will be excluded from the VRR Curve starting with the 2029/2030 Delivery Year.
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Therefore, in accordance with the Ratepayer Protection Pledge, New Large Loads would
ultimately “add more capacity that serves the broader public by increasing supply.”301
2.
New Large Loads with BYONC arrangements or Allocated RPB
UCAP MW will be reflected in the demand curve.
PJM’s proposed Tariff revisions provide that only the UCAP MW of New Large
Loads without BYONC arrangements or Allocated RBP UCAP MW will be excluded from
the demand curve, but New Large Loads are not expected to be indefinitely excluded.
Rather, where New Large Loads have arrangements for capacity within the same RPM
Auction, these quantities of New Large Loads will no longer be excluded from the VRR
Curve. As explained above in Part II.C.3, BYONC resources with which New Large Load
has entered into arrangements would be required to be offered in the RPM Auction as
supply and as price takers.
Furthermore, the quantities of New Large Load would begin to be included in the
VRR Curve in the same RPM Auction as the associated BYONC capacity. In this way,
the impact of including such load in the demand curve is counterbalanced by the inclusion
of a commensurate amount of additional Capacity Resources that are added to the supply
curve. If a BYONC resource is offered into an RPM Auction before the quantity of New
Large Load with which it has an arrangement is added to the demand curve, the RPM
Auction would not reflect actual supply and demand fundamentals. Thus, to qualify as
BYONC, the Capacity Resource must not have been offered and cleared in a prior RPM
Auction where the load was not represented in the demand curve.302 Notably, if a New
301 Ratepayer Protection Pledge.
302 Proposed Tariff, Attachment DD-4, section VI(a)(iii). Given that New Large Loads are included in the
RPM Auctions through the 2028/2029 Delivery Year and eligible BYONC that previously cleared an RPM
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Large Load ramps up over time and arranges for a BYONC that is for the eventual full
load, such BYONC would be allowed to be offered for the full amount into the first RPM
Auction that the portion of the New Large Load will be included in the load forecast. This
is appropriate because such BYONC is being brought to the system by the New Large Load
and should not be partially offered when it is available to serve as capacity for the full
accredited quantity.
On the supply side, the LSE that serves the New Large Load would report to PJM
any BYONC arrangements with the New Large Loads in the zone/area at least 30 days
prior to the deadline for PJM to post the planning parameters for the relevant RPM
Auction.303 PJM will therefore have sufficient time to confirm that the reported Capacity
Resources meets all of the BYONC eligibility requirements before including the quantity
of New Large Load in the VRR Curve that will be posted as part of the planning parameters.
Furthermore, on the supply side, the BYONC resource, with which the New Large
Load has entered into an arrangement must adhere to existing RPM Auction rules to ensure
that the resource can be offered as a price taker in the relevant RPM Auction that the
quantity of New Large Load would be included in demand curve. This includes, but is not
limited to, meeting all the requirements to be offered as a Capacity Resource, submitting
Auction through the 2028/2029 Delivery Year was not on notice of this limitation, any eligible BYONC that
is offered in RPM Auctions through the 2028/2029 Delivery Year can be procured by New Large Loads to
avoid IRAS.
303 Proposed Tariff, Attachment DD-4, section VII(c).
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timely binding notice of intent to offer, and certifying that no buyer-side market power will
be exercised in accordance with the existing rules and timelines.304
If an LSE does not timely report the New Large Load’s arrangement with eligible
BYONC to PJM by the specified deadline, then PJM would not include the quantity of
New Large Load in the demand curve. This is because PJM will post the VRR Curve used
for the relevant RPM Auction as part of the planning parameters so any submissions
received after the deadline would not be timely incorporated into the demand curve.
To remove potential incentives for LSEs to not timely report New Large Loads in
arrangements with BYONC resources, the quantity of those New Large Loads that have
not been timely reported to PJM will continue to be subject to the IRAS in Delivery Years
when IRAS is triggered, until the relevant LSEs have reported New Large Load
arrangement with a BYONC Capacity Resource to PJM at least 30 days prior to the
deadline for PJM to post the planning parameters305 for a subsequent RPM Auction.
3.
Each of the three points on the VRR Curve would be reduced by the
Quantities of New Large Loads for the relevant Base Residual
Auction.
In addition to the two new definitions described above in Part II.F.1, PJM proposes
to modify the existing rules in Tariff, Attachment DD, section 5.10(a) to specify that, for
each of the three points on the VRR Curve, the Excluded RTO New Large Load Amounts
would be deducted from the PJM Region Reliability Requirement, and the relevant
304 See generally Tariff, Attachment DD, section 5.3; Tariff, Attachment DD, section 5.14(h-2); RAA,
Schedule 9.2; RAA, Schedule 10.
305 Proposed Tariff, Attachment DD-4, section VII(d). For the 2029/2030 Delivery Year, the arrangement
must be reported 50 days prior to the commencement of the BRA or 30 days prior to the posting of the
planning parameters for the Scheduled Incremental Auctions. See Proposed Tariff, Attachment DD-4,
section VII(c).
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Excluded LDA New Large Load Amounts would be deducted from the respective LDA
Reliability Requirements before being multiplied by the relevant existing percentages.306
Given that the Commission accepted the extension of the price collar through the
2029/2030 Delivery Year, the proposed Tariff revisions maintain the distinctions between
the VRR Curve for the 2029/2030 Delivery Year and the VRR Curve associated with the
subsequent Delivery Years. Similarly, the respective points on the LDA VRR Curves
would be reduced by the relevant Excluded LDA New Large Load Amounts.307
4.
The Incremental Auctions will reflect adjustments of capacity
previously committed, including any updated adjustments to the
Excluded RTO New Large Load Amounts and/or Excluded LDA
New Large Load Amounts.
As with the BRAs, PJM would similarly exclude Eligible New Large Load
Amounts from the Demand Curve for Scheduled Incremental Auctions. To do this, PJM
proposes to modify the definition of Updated VRR Curve to account for the Excluded RTO
New Large Load Amounts and Excluded LDA New Large Load Amounts.308 This
definition will then be incorporated by reference in the existing definitions of Updated
VRR Curve Increment and Updated VRR Curve Decrement, which are used in the
optimization algorithm for clearing the Scheduled Incremental Auctions.309
306 Proposed Tariff, Attachment DD, section 5.10(a)(i).
307 Proposed Tariff, Attachment DD, section 5.10(a)(ii)(C).
308 Proposed Tariff, Definitions – Updated VRR Curve (“‘Updated VRR Curve’ shall mean the Variable
Resource Requirement Curve for use in the Base Residual Auction of the relevant Delivery Year, updated to
reflect any changes in the Reliability Requirement, Excluded RTO New Large Load Amounts, and/or
Excluded LDA New Large Load Amounts from the Base Residual Auction to the relevant Incremental
Auction.”).
309 See Tariff, Attachment DD, section 5.12(b).
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PJM also proposes to modify the existing rules in Tariff, Attachment DD,
section 5.4 to specify that each LDA Reliability Requirement will be updated to reflect
adjustments to the Excluded LDA New Large Load Amounts. Similarly, PJM is proposing
to modify the existing rules in Tariff, Attachment DD, section 5.4 to specify that each LDA
Reliability Requirement will be updated to reflect adjustments to the Excluded LDA New
Large Load Amounts. These revisions conform the treatment of Excluded LDA New
Large Load Amounts and Excluded RTO New Large Load Amounts in Incremental
Auctions to their treatment in BRAs, starting with the 2029/2030 Delivery Year.
5.
PJM will maintain transparency by posting the Variable Resource
Requirement Curve in advance of the RPM Auctions.
Consistent with the existing practice of posting VRR Curves as part of the broader
planning parameters that are posted as part of the pre-auction process, PJM proposes to
memorialize the posting requirement by specifying that the VRR Curves will be “posted
on the same timeline with the PJM Region Reliability Requirement and the Locational
Deliverability Area Reliability Requirement.”310 Since the VRR Curve for the 2029/2030
Delivery Year will be posted as part of the planning parameters under the existing Tariff
rules by August 31, 2026, PJM makes clear in the proposed Tariff that an Updated VRR
Curve for the 2029/2030 BRA will be posted one month prior to the commencement of the
RPM Auction.
310 Proposed Tariff, Attachment DD, section 5.10(a)(vi)(B). This deadline would typically be February 1
prior to the conduct of a BRA when it is conducted on a normal three-year schedule. However, until the
2030/2031 BRA, the RPM Auctions are still on a compressed auction schedule with the deadline for posting
the planning parameters subject to a Commission waiver order. See PJM Interconnection, L.L.C., 189 FERC
¶ 61,105 (2024).
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Posting an Updated VRR Curve for the 2029/2030 BRA is entirely distinguishable
from the underlying facts in the United States Court of Appeals for the Third Circuit’s
order finding that updating the LDA Reliability Requirement after the auction commenced
was barred by the filed-rate doctrine.311 Because PJM will post the Updated VRR Curve
for the 2029/2030 BRA 30 days before the auction commences and binding offers are
submitted by Capacity Market Sellers, no legal consequences attach after PJM posts the
initial VRR Curve on August 31, 2026, especially as this filing provides notice that the yet-
to-be posted VRR Curve is subject to change in accordance with the proposal set forth in
this filing.
Finally, in addition to specifying that the VRR Curve will be posted prior to the
auction, PJM also proposes to specify that the Excluded RTO New Large Load Amounts
and Excluded LDA New Large Load Amounts used in establishing the VRR Curve will be
included in the posting requirement beginning with the 2029/2030 BRA.312
311 PJM Power Providers Grp. v. FERC, 96 F.4th 390, 400 (3d Cir. 2024).
312 Proposed Tariff, Attachment DD, section 5.11(a)(iii).
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III.
CORRESPONDENCE
The following individuals are designated for inclusion on the official service list in
this proceeding and for receipt of any communications regarding this filing:
Craig Glazer
Vice President–Federal Government Policy
PJM Interconnection, L.L.C.
1200 G Street, NW, Suite 600
Washington, DC 20005
(202) 423-4743
craig.glazer@pjm.com
Ryan J. Collins
Vivian W. Chum
Wright & Talisman, P.C.
1200 G Street, NW, Suite 600
Washington, DC 20005
(202) 393-1200
collins@wrightlaw.com
chum@wrightlaw.com
Mark J. Stanisz
Associate General Counsel
PJM Interconnection, L.L.C.
2750 Monroe Blvd.
Audubon, PA 19403
(610) 666-8800
mark.stanisz@pjm.com
IV.
REQUESTED EFFECTIVE DATE AND CONSENT TO MODIFICATION
OR SEVERANCE OF ISSUES
PJM requests that the Commission issue an order on this filing and make the
enclosed proposed Tariff and RAA revisions effective by no later than October 12, 2026,
2026, which is 60 days after the date of this filing, and to make the Large Load Registry
rules effective October 12, 2026, which is 60 days from the date of filing. Such an effective
date will allow PJM to start building the Large Load Registry and accept reports of
arrangements between New Large Loads and BYONC in time to expeditiously develop
and post a new VRR Curve with the New Load Loads removed to the extent they do not
have BYONC arrangements. An October 12, 2026 effective date will not affect when PJM
will call an Interim Resource Adequacy Service Action. As the enclosed revisions make
clear, IRAS starts being available with the 2027/2028 Delivery Year, i.e., June 1, 2027.
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Further, allowing the revisions to be effective on the date requested, and allowing IRAS to
commence June 1, 2027, would enable the states and other interested entities to put in place
the appropriate state-level tools to complement and implement IRAS. As discussed, PJM
understands that some states have begun proceedings to evaluate how to best facilitate
coordination with PJM on implementing IRAS. PJM welcomes all such efforts.
In addition, as noted above, however, to facilitate Commission approval and
smooth implementation of the IRAS on June 1, 2027, PJM consents to the Commission’s
exercise of authority to modify and/or sever the proposed Tariff and RAA language, as
needed and permitted under the FPA and NRG Power Marketing,313 where such
modification is consistent with PJM’s overarching objectives in this filing.314 In addition,
PJM provides the following requests and observations:
First, should the Commission exercise its authority to modify the proposed Tariff
language herein pursuant to the FPA and NRG Power Marketing, PJM respectfully requests
that the Commission expressly prescribe the revised rate or rule in its order. Prescriptive
revised language from the Commission would provide the “necessary predictability” to
313 NRG Power Mktg., 862 F.3d at 108. As the Commission has repeatedly stated, “[t]he United States Court
of Appeals for the District of Columbia Circuit has held that, in certain circumstances, the Commission has
‘authority to propose modifications to a utility’s [FPA section 205] proposal if the utility consents to the
modifications.’” N.Y. Indep. Sys. Operator, 188 FERC ¶ 61,051 at P 22 n.36 (second alteration in original)
(citing NRG Power Mktg., 862 F.3d at 114-15); see Midcontinent Indep. Sys. Operator, 180 FERC ¶ 61,141
at P 26 n.29 (same); ISO New England, 175 FERC ¶ 61,172 at P 16 n.20 (same).
314 PJM is not, for example, suggesting that the Commission may modify or sever provisions of its proposal
to result in an “entirely different rate design.” NRG Power Mktg., 862 F.3d at 115 (“Our decisions in City of
Winnfield and Western Resources indicate that Section 205 does not allow FERC to suggest modifications
that result in an ‘entirely different rate design’ than the utility’s original proposal or the utility’s prior rate
scheme.”); see also id. at 116 (holding that the Commission’s modifications resulted in an entirely different
rate design where Commission’s modifications: (1) replaced PJM’s proposal to permit exemption where
generators demonstrate on a case-by-case basis that their costs fell below the price floor with one in which
generators can claim exemptions even if they cannot demonstrate that their price falls below the floor; (2)
undid the compromise between LSEs and Generators and thus “eviscerated the terms of the bargain”).
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allow PJM to implement such changes to elements of the Large Load Registry or IRAS in
a timely manner.315 PJM’s submittal of any compliance filing implementing such
modifications would constitute PJM’s consent and acceptance of the Commission’s
modifications.
Second, PJM observes that the facts underlying the PJM proposal at issue in NRG
Power Marketing are distinguishable from the facts here. In NRG Power Marketing, the
FPA section 205 filing with the Commission was one in which “PJM asked the
Commission ‘to view this filing not as a list of discrete Tariff changes, but . . . a hard-
fought compromise package, and to approve it as such.’”316 By contrast, the proposal put
forth here is not a stakeholder compromise package. Unlike NRG Power Marketing, there
is no danger of undoing the compromise between LSEs and Generators and thus
“eviscerat[ing] the terms of the bargain.”317 Rather, this filing is the product of an RBP
proposal that was independently endorsed by the PJM Board following the CIFP
stakeholder process. Moreover, through this pre-emptive grant of authority pursuant to
315 PJM Interconnection, L.L.C., 175 FERC ¶ 61,137, at P 110 (2021) (first quoting Aera Energy LLC v.
FERC, 789 F.3d 184, 190-92 (D.C. Cir. 2015) (“affirming the Commission, finding ‘FERC’s conditional
acceptance . . . simply required Kern River to substitute one number for another when allocating costs to the
rolled-in shippers. . . . Because this mechanical change gave Kern River no discretion to adjust its rate models,
FERC provided sufficient notice to ratepayers’”); and then quoting Elec. Dist. No. 1 v. FERC, 774 F.2d 490,
493 (D.C. Cir. 1985) (“vacating when the ‘effective date of an order set[] forth no more than the basic
principles pursuant to which the new rates are to be calculated’”) (alteration in original)). As the Commission
elaborated further in PJM Interconnection, mere “direction” without “sufficient detail on each element [of
the replacement rate] that [customers/market participants] could determine when their transactions would be
subject to [the new rule],” would mean that implementation of the compliance directive prior Commission
approval would violate the filed rate doctrine. Id. (quoting Elec. Dist. No. 1, 774 F.2d at 493 (“[P]urchasers
of electricity cannot plan their activities unless they know the cost of what they are receiving, ‘providing the
necessary predictability is the whole purpose of the well-established filed rate doctrine.’” (citing Ark. La.
Gas Co. v. Hall, 453 U.S. 571, 577 (1981)))).
316 NRG Power Mktg., 862 F.3d at 113 (citation omitted).
317 NRG Power Mktg., 862 F.3d at 116.
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which the Commission may sever and modify each element of the proposal, stakeholders
are on notice of potential changes to the proposal as filed, and will have the opportunity to
comment as they feel necessary and appropriate.
Third, although PJM consents to make each element of the proposed revisions to
the Tariff and RAA severable, PJM has demonstrated that each element of its proposal is
just and reasonable. Notwithstanding PJM’s grant of authority to sever, PJM urges the
Commission to accept all revisions as proposed so that the elements of the Large Load
Registry can commence on October 12, 2026; would allow PJM to expeditiously post an
Updated VRR Curve for the December 2029/2030 BRA; and IRAS can begin June 1, 2027.
To the extent the Commission does sever and modify any element, the Commission
should recognize that, while the RAA and Tariff revisions together advance a means for
addressing the resource adequacy issues resulting from new large loads interconnecting to
the transmission system faster than new capacity is being placed in service. The elements
of this proposal were developed together and designed to work in lockstep and provide
complementary pieces to a multi-prong approach to incent New Large Loads to bring their
own capacity to meet their resource adequacy needs and avoid imposing costs on
ratepayers. Indeed, the VRR Curve changes are predicated on the BYONC proposed as
part of the IRAS framework. Conversely, the general obligation that Load Serving Entities
bring new capacity in an amount that equals or exceeds its New Large Loads’ peak load
and Large Load Registry are each discrete from the other elements of this filing and would
provide an independent value of informing PJM’s operations, planning, and load
forecasting activities.
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Finally, PJM continues to discuss with states and other stakeholders how to address
these issues, particularly the federal-state handoff of responsibilities. To that end, PJM
may, at the behest of the states, host workshops with states and other stakeholders, which
may result in amendments to the proposals submitted herein and, if necessary, additional
time for comments and consideration as may be necessary or appropriate.
V.
DOCUMENTS ENCLOSED
This filing consists of the following:
1.
This transmittal letter;
2.
Revisions to the PJM Tariff and Resource Adequacy Agreement (in redlined
and non-redlined format (as Attachments A and B, respectively) and in
electronic tariff filing format as required by Order No. 714);318 and
3.
Affidavit of Christopher Pilong on Behalf of PJM Interconnection, L.L.C. as
Attachment C.
VI.
SERVICE
PJM has served a copy of this filing on all PJM members and on all state utility
regulatory commissions in the PJM Region by posting this filing electronically. In
accordance with the Commission’s regulations,319 PJM will post a copy of this filing to the
Commission filings section of its internet site, located at the following link:
https://www.pjm.com/library/filing-order.aspx with a specific link to the newly filed
document, and will send an e-mail on the same date as this filing to all PJM members and
all state utility regulatory commissions in the PJM Region320 alerting them that this filing
318 Electronic Tariff Filings, Order No. 714, 124 FERC ¶ 61,270 (2008), final rule, Order No. 714-A, 147
FERC ¶ 61,115 (2014).
319 See 18 C.F.R. §§ 35.2(e), 385.2010(f)(3).
320 PJM already maintains, updates, and regularly uses e-mail lists for all PJM members and affected state
commissions.
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has been made by PJM and is available by following such link. PJM also serves the parties
listed on the Commission’s official service list for this docket. If the document is not
immediately available by using the referenced link, the document will be available through
the referenced link within 24 hours of the filing. Also, a copy of this filing will be available
on
the
Commission’s
eLibrary
website
located
at
the
following
link:
http://www.ferc.gov/docs-filing/elibrary.asp in accordance with the Commission’s
regulations and Order No. 714.
VII.
CONCLUSION
Based on the foregoing, PJM requests that the Commission accept the enclosed
proposed Tariff and RAA revisions by October 12, 2026, effective as requested.
Respectfully submitted,
/s/ Ryan J. Collins
Craig Glazer
Vice President–Federal Government Policy
PJM Interconnection, L.L.C.
1200 G Street, NW, Suite 600
Washington, DC 20005
(202) 423-4743
craig.glazer@pjm.com
Ryan J. Collins
Vivian W. Chum
Wright & Talisman, P.C.
1200 G Street, NW, Suite 600
Washington, DC 20005
(202) 393-1200
collins@wrightlaw.com
chum@wrightlaw.com
Mark J. Stanisz
Associate General Counsel
PJM Interconnection, L.L.C.
2750 Monroe Blvd.
Audubon, PA 19403
(610) 666-8800
mark.stanisz@pjm.com
August 13, 2026