ER27-330-000 · 2026-10-29 · PJM

PJM Interconnection, L.L.C., Proposed Amendments to the Reliability Backstop Procurement (transmittal letter; comments requested by November 30, 2026)

Topics in the text: Cost allocation · Credit and exit · Reliability and curtailment

What the document says

PDF p. 1

PJM's refiling targets the three hearing issues: LSE cost responsibility, LSE credit, and exit notice.

(i) allocate responsibility for RBP Charges to certain Load Serving Entities (“LSE”); (ii) require LSEs responsible for RBP Charges to post an appropriate level of credit PDF p. 1

PDF p. 4

PJM's refiling targets the three hearing issues: LSE cost responsibility, LSE credit, and exit notice.

PJM respectfully submits that each aspect of the filing is just and reasonable. PDF p. 4

PDF p. 7

PJM swaps Load Adjustments for distributor-reported growth in 50 MW-plus loads through 2028/29.

rather than relying on Load Adjustment data as a proxy for Large Load growth, PJM is proposing to require Electric Distributors outside of a Fixed Resource Requirement PDF p. 7

PDF p. 7

PJM swaps Load Adjustments for distributor-reported growth in 50 MW-plus loads through 2028/29.

end-use customer load that has a cumulative peak load of 50 MW or greater at a single electrical site PDF p. 7

PDF p. 12

PJM keeps the snapshot fixed for 15 years and leaves retail cost direction to states.

That allocation to the zone/area will remain fixed throughout the 15-year RBP commitment period. PDF p. 12

PDF p. 15

PJM keeps the snapshot fixed for 15 years and leaves retail cost direction to states.

PJM does not propose, and lacks authority, to dictate how any LSE subsequently allocates or recovers those costs from retail customers. PDF p. 15

PDF p. 22

PJM cuts the buyer credit rate to about $686,000 per MW, 40% of present value.

PJM proposes to set the RBP Credit Rate at 40% of the net present value of the total RBP payment obligation. PDF p. 22

PDF p. 22

PJM cuts the buyer credit rate to about $686,000 per MW, 40% of present value.

the proposed methodology produces an illustrative RBP Credit Rate of approximately $686,000 per MW. PDF p. 22

PDF p. 27

PJM adds surety bonds and gives LSEs at least 75 days' notice of their collateral obligation.

PJM is proposing to revise the definition of RBP Collateral to include surety bonds PDF p. 27

PDF p. 26

PJM adds surety bonds and gives LSEs at least 75 days' notice of their collateral obligation.

PJM is proposing that LSEs be provided at least 75 days’ notice of their collateral obligation PDF p. 26

PDF p. 14

PJM adds surety bonds and gives LSEs at least 75 days' notice of their collateral obligation.

Electric Distributors electing to provide RBO allocations must submit the initial allocation no later than 120 days before the start of the 2028/2029 Delivery Year. PDF p. 14

PDF p. 33

PJM drops exit charges on Transmission Owners; exiting LSEs keep paying their allocated RBP Charges.

PJM is revising its proposed Tariff, Attachment DD, section 18.7 to require that LSEs, rather than exiting Transmission Owners, continue to cover the costs of RBP Charges allocated to them. PDF p. 33

PDF p. 40

PJM deletes the co-op and municipal opt-out; peak shaving opt-out needs five years.

PJM proposes to revise Tariff, Attachment DD, section 18.1(d) to eliminate the provision that permits an Electric Distributor that is not regulated by a RERRA to specify a quantity of load that will be opted out of the Initial RBP Target. PDF p. 40

PDF p. 41

PJM deletes the co-op and municipal opt-out; peak shaving opt-out needs five years.

any MW quantity used to reduce the Initial RBP Target through the Peak Shaving Adjustment opt-out be committed to participate in the applicable Peak Shaving Adjustment program for a minimum term of five years PDF p. 41

PDF p. 2

PJM wants an order by January 29, 2027 and a comment deadline of November 30.

PJM is also requesting that the Commission issue an order on all aspects of this filing no later than January 29, 2027 PDF p. 2

PDF p. 2

PJM wants an order by January 29, 2027 and a comment deadline of November 30.

PJM moves for the Commission to establish an extended, 32-day comment period, such that comments and interventions would be due November 30, 2026. PDF p. 2

PDF p. 3

PJM seeks a one-time waiver of the tariff's shortage investigation and backstop filing duties.

should the 2029/2030 Delivery Year Base Residual Auction clear short, resulting in three consecutive Delivery Years with insufficient capacity procurement, PJM conditionally requests waiver PDF p. 3

PDF p. 44

PJM lets sellers cure offer deficiencies for five days after notice, even past the window close.

an RBP Seller will have five calendar days from receipt of a deficiency notice to cure any deficiencies identified by PJM, even if the cure period extends beyond the close of the RBP offer submission window PDF p. 44

Responses and related views

The market monitor wanted new physical supply

Independent Market Monitor for PJM · Related public statement

The monitor objected to eligibility rules that could let an existing resource reclassify its capacity. Its test was whether an award actually paid for additional physical supply.

PDF p. 15, responsive pleadings

NOVEC disputes attributing the whole shortage to large loads

Northern Virginia Electric Cooperative · Related public statement

NOVEC identified causes of the capacity shortage besides growth in large loads. It preferred voluntary subscription, with interruptible service for a customer that declined. It is a cooperative, not the Virginia regulator.

PDF pp. 3–5, 16

Source sections

Printed headings where available; page ranges otherwise. Excerpts below are selected from the text by keyword.

Opening text

opening text · Topic match: Cost allocation

Debbie-Anne Reese, Secretary October 29, 2026 Page 2 to LSEs exiting PJM of their continuing responsibility for RBP Charges allocated to them through the remainder of the RBP commitment term.4 PJM requests that most of the proposed revisions become effective on February 28, 2027—the same effective…
Read this passage

I. BACKGROUND

printed heading

I.
Read this passage

BACKGROUND

printed heading · Topic match: Cost allocation

Consistent with the Commission’s direction, this filing presents targeted modifications to the RBP’s cost allocation, exit responsibilities, and collateral provisions that are intended to resolve the Commission’s remaining areas of concern, strengthen the overall design of the RBP, and facilitate…
Read this passage

II. PROPOSED UPDATES THAT ADDRESS ISSUES IDENTIFIED IN THE

printed heading

PROPOSED UPDATES THAT ADDRESS ISSUES IDENTIFIED IN THE COMMISSION’S SEPTEMBER 29 ORDER
Read this passage

A. PJM Proposes Updates that Directly Address the Commission’s RBP Cost

printed heading · Topic match: Cost allocation

Under FPA section 205, cost allocation must be grounded in the principle that costs are assigned to those who cause them or benefit from the facilities and services provided.12 At the same time, courts have long recognized that cost causation is not a standard of mathematical precision.
Read this passage

B. Credit Requirements of LSEs Commensurate with Risks (Proposed Tariff,

printed heading · Topic match: Credit and exit

PJM proposes five broad changes to the RBP LSE credit rules: (1) establish, using objective data, a revised uniform credit rate, based on quantitative analyses, for LSEs allocated responsibility for RBP Charges to post collateral;48 (2) lengthen the timeframe from when an LSE is assigned…
Read this passage

C. Treatment of RBP Commitment in Event of Transmission Owner Exit

printed heading · Topic match: Cost allocation

The September 29 Order suggests that “a just and reasonable approach could require LSEs in an exiting Transmission Owner’s zone to pay RBP exit fees commensurate with their cost allocation under the RBP, to prevent cost shifts to other LSEs in the PJM Region.”94 Accordingly, PJM proposes to require…
Read this passage

III. PROPOSED ADDITIONAL UPDATES TO THE ACCEPTED RBP RULES

printed heading

PROPOSED ADDITIONAL UPDATES TO THE ACCEPTED RBP RULES Beyond the proposed updates discussed above, PJM proposes additional limited amendments to the Tariff that serves to further refine, clarify, and/or update the set of RBP rules as detailed below.
Read this passage

A. PJM Proposes to Amend the Opt-Out for LSEs that Are Not Regulated by

printed heading · Topic match: Cost allocation

However, in the September 29 Order, the Commission found that the proposed opt-out for qualifying cooperatives and municipal utilities may be unjust, unreasonable, and unduly discriminatory because those entities may serve Large Loads that are similarly situated to Large Loads served by other LSEs…
Read this passage

B. PJM Proposes Updates to Modify the Opt-Out for a Peak Shaving

printed heading · Topic match: Reliability and curtailment

While PJM is maintaining the remaining opt-out for Electric Distributors that address resource adequacy needs through Peak Shaving Adjustment programs established pursuant to state law, PJM proposes a targeted modification to better align that opt-out with the requirements applicable to Qualifying…
Read this passage

C. PJM Proposes to Update the Rules Related to the Cure Period for Any

printed heading

PJM Proposes to Update the Rules Related to the Cure Period for Any Identified Deficiencies Associated with an RBP Sell Offer.
Read this passage

D. PJM Proposes Clarifications Related to Qualifying RBP Offset UCAP

printed heading · Topic match: Reliability and curtailment

PJM Proposes Clarifications Related to Qualifying RBP Offset UCAP MW.
Read this passage

E. PJM Proposes to Update Site Control Requirements.

printed heading · Topic match: Connecting load and generation

PJM Proposes to Update Site Control Requirements.
Read this passage

F. PJM Proposes to Utilize the Most Updated Resource Forecast and

printed heading · Topic match: Reliability and curtailment

PJM Proposes to Utilize the Most Updated Resource Forecast and Resource Mix.
Read this passage

G. PJM Proposes to Update Must-Offer and Binding Notice of Intent Rules

printed heading

PJM Proposes to Update Must-Offer and Binding Notice of Intent Rules for Committed RBP Resources.
Read this passage

IV. REQUEST

printed heading · Topic match: Reliability and curtailment

Additionally, this FPA section 205 filing proposes to commence the RBP on March 1, 2027, which is designed as a stop-gap measure to address the expected resource adequacy shortfall that would be duplicative of a Reliability Backstop Auction.
Read this passage

V. STAKEHOLDER CONSULTATION

printed heading

STAKEHOLDER CONSULTATION As required by Tariff, section 9.2(b), PJM consulted the Members Committee and the Transmission Owners on October 22, 2026, seven days prior to submitting this filing.153 In addition, PJM also consulted with the Transmission Owners on October 22, 2026, in 152 Powering…
Read this passage

VI. PROPOSED EFFECTIVE DATES AND UPDATED RBP TIMING

printed heading

Finally, PJM respectfully requests that the Commission issue an order on all aspects of this filing no later than January 29, 2027.
Read this passage

VII. MOTION FOR EXTENDED, 32-DAY COMMENT PERIOD

printed heading

MOTION FOR EXTENDED, 32-DAY COMMENT PERIOD To provide interested parties with a meaningful opportunity to review and comment on the proposed revisions to the RBP rules, PJM respectfully requests that the Commission establish a 32-day comment period for this filing, i.e., November 30, 2026.
Read this passage

VIII. DESCRIPTION OF SUBMITTAL

printed heading

DESCRIPTION OF SUBMITTAL This filing consists of the following: 1.
Read this passage

IX. CORRESPONDENCE

printed heading

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, N.W., Suite 600…
Read this passage

X. SERVICE

printed heading

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.
Read this passage

XI. CONCLUSION

printed heading

XI.
Read this passage

CONCLUSION

printed heading

CONCLUSION Based on the foregoing, PJM respectfully requests that the Commission accept the proposed Tariff revisions as discussed herein and effective as proposed.
Read this passage