ER26-3380-001 · 2026-10-29 · Indicated PJM Transmission Owners

Request for Rehearing of the Indicated PJM Transmission Owners of the September 29, 2026 backstop order (TO exit amendment)

UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
 
 
 
PJM Interconnection, L.L.C. 
  
 
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Docket No. ER26-3380-000 
 
REQUEST FOR REHEARING OF THE  
INDICATED PJM TRANSMISSION OWNERS 
Pursuant to Federal Power Act (“FPA”) section 313(a)1 and Rule 7132 of the Rules of 
Practice and Procedure of the Federal Energy Regulatory Commission (“FERC” or 
“Commission”),3 the Indicated PJM Transmission Owners4 respectfully request rehearing of 
the Commission’s September 29, 2026 order in this proceeding (the “Order”).5   
 
1  16 U.S.C. § 825l(a).  
2  See 18 C.F.R. § 385.713 (2026). 
3  18 C.F.R. § 385.211 (2026). 
4  The Indicated PJM Transmission Owners are American Transmission Systems, Inc., Mid-
Atlantic Interstate Transmission, LLC, Trans-Allegheny Interstate Line Company, Keystone 
Appalachian Transmission Company, Jersey Central Power & Light Company, Monongahela 
Power Company, and The Potomac Edison Company (collectively, “The FirstEnergy 
Transmission Companies”) and Duquesne Light Company.  The FirstEnergy Transmission 
Companies are separately filing a rehearing request raising other issues.   
5  See PJM Interconnection, L.L.C., 196 FERC ¶ 61,245 (2026) (“Order”).

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The Indicated PJM Transmission Owners are hopeful that PJM6 will submit a revised 
section 205 filing that supersedes its earlier section 205 filing and may moot the need for 
rehearing of the Order.  The Indicated PJM Transmission Owners submit this rehearing request 
out of an abundance of caution to preserve their rights in this fast-moving and dynamic 
proceeding. 
As discussed below, the Commission should grant rehearing of the Order as follows: 
• The Order is erroneous, arbitrary and capricious, fails to engage in reasoned decision-
making, and is unsupported by substantial evidence because it did not definitively reject 
PJM’s Exit Amendment on cost-causation grounds. 
• The Order is erroneous, arbitrary and capricious, fails to engage in reasoned decision-
making, and is unsupported by substantial evidence because it did not definitively reject 
PJM’s Exit Amendment on the basis that PJM exceeded its FPA section 205 filing 
authority.  
I. 
BACKGROUND 
On July 31, 2026, after a truncated CIFP review process and without proper notice to 
the TOs, PJM filed its RBP proposal with the Commission under FPA section 205, with a 
proposed effective date of September 29, 2026.  The RBP proposal included an Exit 
Amendment that would establish new prerequisites to a TO exiting PJM and impose new fees 
on exiting TOs.  The Indicated PJM Transmission Owners submitted a Protest opposing this 
Exit Amendment.  This Protest was not brought on by any present desire to exit PJM; rather, 
 
6  Defined terms used herein shall have the same meaning as in the Indicated PJM Transmission 
Owners’ Protest.  See Protest of the Indicated PJM Transmission Owners, PJM 
Interconnection, L.L.C., No. ER26-3380-000 (filed Aug. 21, 2026).

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it challenged PJM’s deviation from agreed-upon CTOA processes and relevant Commission 
precedent in how PJM adopted the Exit Amendment and with respect to its substance. 
On September 29, 2026, the Commission issued its Order, accepting PJM’s RBP 
proposal for filing, “suspended for five months, effective February 28, 2027, subject to refund 
and the outcome of the further procedures ordered in this proceeding.”7  The Commission 
identified three aspects of PJM’s proposal that may be unjust and unreasonable—“cost 
allocation, [TO] exit rules, and LSE collateral requirements”8—but “f[ound] that the other 
aspects of PJM’s RBP proposal are just and reasonable.”9  The Commission ordered further 
briefing and a paper hearing pertaining to the aspects identified as potentially unjust and 
unreasonable, and suggested that, “following the paper hearing, the Commission may need to 
direct significant modifications to certain aspects of PJM’s proposal.”10   
As to the Exit Amendment in particular, the Commission found that PJM “fails to 
explain why Transmission Owners—who are not the buyers for which PJM procures capacity 
under the RBP—should be responsible for RBP Charges,”11 and that the Exit Amendment 
“may be inconsistent with the cost causation principle.”12  But the Order did not reject the 
concept of an exit fee outright, and instead proposed 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 
 
7  Order, 196 FERC ¶ 61,245 at P 215(A). 
8  Id. P 24. 
9  Id. P 23. 
10  Id. PP 24–25. 
11  Id. P 178. 
12  Id. P 179.

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Region.”13  The Commission did not address the Indicated PJM Transmission Owners’ 
argument that PJM’s Exit Amendment was not the sort of matter that PJM could unilaterally 
file with the Commission under PJM’s governing agreements. 
As explained herein and for the reasons set forth below, the Commission should grant 
rehearing and definitively reject the Exit Amendment both as violative of cost-causation 
principles and as an ultra vires submission filed in excess of PJM’s unilateral filing authority. 
II. 
REQUEST FOR REHEARING 
A. 
Statement of Issues and Specification of Errors 
The Indicated PJM Transmission Owners submit the following Statement of Issues and 
Specification of Errors pursuant to Rule 713(c)(1)-(2) of the Commission’s Rules of Practice 
and Procedure.14 
• The Order is erroneous, arbitrary and capricious, fails to engage in reasoned decision-
making, and is unsupported by substantial evidence because it did not definitively reject 
PJM’s Exit Amendment on cost-causation grounds.  16 U.S.C. § 824d(a)–(b) (all rates 
and charges “shall be just and reasonable,” and no public utility shall “subject any 
person to any undue prejudice or disadvantage”); KN Energy Inc. v. FERC, 968 F.2d 
1295, 1300 (D.C. Cir. 1992) (rates must “reflect to some degree the costs actually 
caused by the customer who must pay them”); Ill. Com. Comm’n v. FERC, 576 F.3d 
470, 476–77 (7th Cir. 2009) (“FERC is not authorized to approve a pricing scheme that 
requires a group of utilities to pay for facilities from which its members derive no 
benefits, or benefits that are trivial in relation to the costs sought to be shifted to its 
 
13  Id. P 181 (emphasis added). 
14  18 C.F.R. § 385.713(c)(1)–(2) (2026).

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members.”); Duquesne Light Co., 122 FERC ¶ 61,039 at PP 89–94 (2008) (holding the 
withdrawing entity responsible for capacity PJM had procured because it “understood 
that PJM was procuring capacity on its behalf and therefore should be obligated to pay 
for that capacity”). 
• The Order is erroneous, arbitrary and capricious, fails to engage in reasoned decision-
making, and is unsupported by substantial evidence because it did not definitively reject 
PJM’s Exit Amendment on the basis that PJM lacked authority under its governing 
documents to file the Exit Amendment unilaterally.  See CTOA § 8.5.1 (amending the 
CTOA requires a two-thirds majority vote of the TOs); id. § 7.5.1(iv) (TOs hold 
“unilateral and exclusive” rights to make an FPA section 205 filing concerning “any 
provisions governing the recovery of transmission-related costs incurred by the 
[TOs]”); id. (requiring detailed advance notice to the TOs of any filing that “relates to 
or affects . . . [the] provisions governing the recovery of transmission-related costs”); 
New England Power Generators Ass’n v. FERC, 881 F.3d 202, 210 (D.C. Cir. 2018) 
(Commission must “respond meaningfully to the arguments raised before it”) (quoting 
TransCanada Power Mktg. Ltd. v. FERC, 811 F.3d 1, 12 (D.C. Cir. 2015)). 
B. 
Argument 
1. 
The Exit Amendment Violates Cost-Causation Principles 
The Order’s preliminary conclusion that the Exit Amendment may violate cost-
causation principles should have been stated finally and definitively, instead of being left open 
for decision after a paper hearing.  Under cost-causation principles, rates must “reflect to some 
degree the costs actually caused by the customer who must pay for them,” and costs must be

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allocated in a manner at least roughly commensurate with benefits.15  As the Order recognized, 
PJM proposes to procure RBP capacity “on behalf of LSEs,” and “the beneficiaries of the RBP 
are the LSEs on whose behalf PJM will procure capacity through the RBP.”16  TOs “are not 
the buyers for which PJM procures capacity under the RBP,” and PJM “fails to explain why” 
they “should be responsible for RBP Charges.”17  The Commission’s precedent points the same 
way: the Commission has found it just and reasonable to impose generation capacity costs on 
LSEs located within an exiting TO’s zone, not on the TO as such.18   
Although the Commission expressed preliminary agreement with the argument that the 
Exit Amendment violates cost-causation principles, the Commission should not have left the 
issue open, but instead should have definitively and finally ruled that the Exit Amendment 
violates cost-causation principles.  The Commission should grant rehearing and issue that final 
ruling now. 
2. 
PJM Lacked Authority To File The Exit Amendment 
The Order summarized the Indicated PJM Transmission Owners’ filing-rights 
challenge, and PJM’s brief response, but the Order did not resolve this issue.19  The Indicated 
PJM Transmission Owners respectfully request that the Commission address that challenge 
now and sustain it.  PJM lacked filing authority for three independent reasons. 
 
15  Order, 196 FERC ¶ 61,245 at P 179 (quoting KN Energy Inc. v. FERC, 968 F.2d 1295, 1300 
(D.C. Cir. 1992), and citing Ill. Com. Comm’n v. FERC, 576 F.3d 470, 477 (7th Cir. 2009)). 
16  Id. PP 178–79. 
17  Id. P 178; see Protest of the Indicated PJM Transmission Owners at 8–10. 
18  Order, 196 FERC ¶ 61,245 at P 178 (citing Duquesne Light Co., 122 FERC ¶ 61,039 at PP 
89–94); see also id. P 169 (summarizing Indicated PJM Transmission Owners’ showing that, 
in Duquesne, the Commission found Duquesne responsible for capacity charges “only in the 
context of Duquesne’s role as an LSE”). 
19  Id. PP 166–67.

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First, the Exit Amendment amends the CTOA, which already addresses an exiting 
TO’s obligations,20 and which may be amended only with the supporting vote of the TOs.21  
The Exit Amendment adds new obligations to exit that have no counterpart in PJM’s governing 
documents, which “do not contain an exit fee.”22  And the Exit Amendment makes those 
obligations preconditions to exit: each payment obligation must be satisfied “prior to” the TO’s 
exit from PJM.23  Thus, the Exit Amendment constitutes an amendment of the CTOA—the 
existing version of which permits an exit only once the preconditions in sections 3.2 and 3.4 
have been met.24  PJM cannot avoid the CTOA’s amendment procedures by casting a change 
to the core terms of the CTOA as an amendment to the OATT, rather than to the CTOA.   
Second, to the extent the Exit Amendment imposes costs on TOs in their capacity as 
TOs, this is a matter of recovery of transmission-related costs—which falls within the TOs’ 
exclusive filing rights.25  
 
20  Id. P 166 (noting “the existing CTOA requirements in sections 3.2 and 3.4 governing an 
exiting Transmission Owner’s obligations”). 
21  CTOA § 8.5.1; Protest of the Indicated PJM Transmission Owners at 5–6; see Order, 196 
FERC ¶ 61,245 at P 166.  
22  Id. P 168. 
23  Proposed Tariff, attach. DD, § 18.7(a)–(b). 
24 Pursuant to CTOA section 3.2, “[a]ny Party may withdraw from” the CTOA if it meets three 
preconditions: (1) securing alternative arrangements for comparable transmission service; (2) 
obtaining FERC approval to withdraw; and (3) “if its Transmission Facilities do not comprise 
an entire Control Area,” satisfying all applicable NERC and Applicable Regional Reliability 
Council standards for operating a Control Area or being included within an existing one.  
CTOA § 3.2 (“Withdrawal From This Agreement”).  Pursuant to section 3.4, a withdrawing 
TO remains liable for obligations it incurred, that were incurred on its behalf, or that arose 
under the CTOA before the withdrawal’s effective date.  Id. § 3.4 (“Obligations After 
Withdrawal, Transfer, or Assignment”). 
25 CTOA § 7.5.1(iv); Protest of the Indicated PJM Transmission Owners at 6–7; see Order, 196 
FERC ¶ 61,245 at P 166.

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Third, even if the Exit Amendment somehow does not concern recovery of 
transmission-related costs, at a minimum it “relates to or affects” provisions governing 
recovery of transmission-related costs, and PJM therefore was required to provide the TOs 
with 45 days’ notice before filing the Exit Amendment.26  PJM did not do so, opting instead 
for a truncated CIFP review process that provided a constantly moving target and no adequate 
notice.27 
Because PJM failed to fulfill any of these procedural prerequisites, PJM exceeded its 
authority in unilaterally submitting the Exit Amendment as a section 205 filing.  The sole 
mechanism by which PJM could have filed this proposal would have been pursuant to section 
206—but PJM failed to do so, or to carry the associated burden of showing that the current exit 
provisions are unjust and unreasonable.  
The Order’s suggestion that exit obligations might instead be placed on LSEs28 does 
not moot this challenge.  The Order did not adopt that modification; rather, it accepted the Exit 
Amendment as filed, anticipated that modifications may be directed after the paper hearing, 
and encouraged PJM to submit a new filing.29  The Commission should grant rehearing and 
hold that PJM lacked authority under section 205 to file the Exit Amendment. 
 
26  CTOA § 7.5.1(iv); Protest of the Indicated PJM Transmission Owners at 7–8; see Order, 
196 FERC ¶ 61,245 at P 166. 
27  Protest of the Indicated PJM Transmission Owners at 8. 
28  Order, 196 FERC ¶ 61,245 at P 181. 
29  Id. PP 25, 28, 215(A).

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III. 
CONCLUSION 
For the foregoing reasons, the Indicated PJM Transmission Owners respectfully 
request that the Commission grant rehearing of the Order and definitively reject PJM’s 
proposed Exit Amendment.  
Dated:  October 29, 2026 
Respectfully submitted, 
/s/ Evan K. Dean 
 
 
 
Evan K. Dean 
Managing Counsel, Transmission Rates & 
Services 
FirstEnergy Service Company 
341 White Pond Drive 
Akron, Ohio 44320 
Telephone: 330-620-9585 
edean@firstenergycorp.com 
/s/ Sanford I. Weisburst 
 
 
Sanford I. Weisburst 
Matthew Meyer 
Madeleine Fleming 
QUINN EMANUEL URQUHART 
& SULLIVAN, LLP 
295 Fifth Avenue, Ninth Floor 
New York, New York 10016 
Telephone: 212-849-7000 
sandyweisburst@quinnemanuel.com 
matthewmeyer@quinnemanuel.com 
madeleinefleming@quinnemanuel.com 
 
/s/ Anthony Alden 
 
 
 
Anthony Alden 
QUINN EMANUEL URQUHART  
 & SULLIVAN, LLP  
865 S Figueroa St, 10th Floor 
Los Angeles, CA 90017 
Telephone: 213-443-3000 
anthonyalden@quinnemanuel.com 
Counsel for the FirstEnergy Transmission Companies 
 
 
/s/ Michael Brechlin  
 
 
Michael Brechlin  
Manager Asst GC - Regulatory Law State 
Regulatory 
Duquesne Light Company  
Nova Place 
100 South Commons, Suite 118 
Mail Drop OGC-L1 
Pittsburgh, PA 15212 
Telephone: 412-393-6431 
mbrechlin@duqlight.com 
 
 
Counsel for Duquesne Light Company

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CERTIFICATE OF SERVICE 
I hereby certify that I have caused the foregoing document to be served upon all the 
parties listed on the official service list for the above-referenced proceedings, pursuant to the 
requirements of Rule 2010 of the Commission's Rules of Practice and Procedure. 
Dated at New York, N.Y., this 29th day of October, 2026. 
/s/ Sanford I. Weisburst 
 
 
Sanford I. Weisburst 
QUINN EMANUEL URQUHART 
& SULLIVAN, LLP 
295 Fifth Avenue, Ninth Floor 
New York, New York 10016 
Telephone: 212-849-7000 
sandyweisburst@quinnemanuel.com