{"document":{"slug":"statement-er26-3380-doe","title":"U.S. Department of Energy notice of intervention and statement of position supporting the September 29, 2026 backstop order","issued":"2026-10-07","accession":"20261007-5181","docket":"ER26-3380-000","group":"PJM Reliability Backstop Procurement","filer":"U.S. Department of Energy","kind":"notice of intervention and statement of position","file":"sources/originals/20261007-5181_ER26-3380-000 DOE Intervention re PJM Backstop Filing_10072026_.pdf","url":"https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20261007-5181","sha256":"19966a790918e35aba0c621159e001ff6741c3f77daa8e7cc255f7d2d5b86410","pages":9,"tokens":2617,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":295,"text":"1 \n \nUNITED STATES OF AMERICA \nBEFORE THE \nFEDERAL ENERGY REGULATORY COMMISSION \n \nPJM Interconnection, L.L.C.                                    \nDocket Nos. ER26-3380-000 \n \n \nEL26-108-000 \n    \n \nNOTICE OF INTERVENTION AND STATEMENT OF POSITION OF \nTHE UNITED STATES DEPARTMENT OF ENERGY \n \nPresident Donald J. Trump and the Department of Energy (DOE) are committed to \nensuring that American households and businesses have affordable, reliable, and secure energy.  \nOn day one, President Trump declared a national energy emergency to fix the skyrocketing energy \nprice inflation caused by the prior administration’s policies of reducing reliable, non-intermittent \nAmerican energy resources.1  President Trump subsequently obtained the pledges of utilities, \nstates, data center developers, and cooperatives to commit to his Ratepayer Protection Pledge.  \nUnder the Ratepayer Protection Pledge, large electric energy loads—not American households or \nother business ratepayers—must fund the electric energy generation and related infrastructure \nthat such new large load projects require.2 \nIn furtherance of the President’s goals and in support of the Federal Energy Regulatory \nCommission’s (Commission) September 29, 2026 order, the Secretary of Energy and DOE files \nthis notice of intervention and statement of position in the captioned docket pursuant to section \n405 of the DOE Organization Act and Rule 214 of the Commission’s regulations.3  DOE \nspecifically supports key aspects of the Commission’s guidance to PJM Interconnection, L.L.C. \n(PJM), including the counsel that PJM proactively address what the Commission has outlined by \n \n1 See Declaring a Nat’l Energy Emergency, Exec. Order No. 14,156, 90 Fed. Reg. 8433 (Jan. 29, 2025). \n2 See President Donald J. Trump, Ratepayer Protection Pledge, Proclamation No. 11014, 91 Fed. Reg. 11439 (Mar. \n9, 2026), https://www.federalregister.gov/documents/2026/03/09/2026-04645/ratepayer-protection-pledge \n[hereinafter Ratepayer Protection Pledge]. \n3 42 U.S.C. § 7175; 18 C.F.R. § 385.214(a)(1)."},{"page":2,"startToken":295,"endToken":593,"text":"2 \n \nsubmitting a revised tariff under Federal Power Act (FPA) section 205 on or before October 29, \n2026.4  PJM should implement the cost allocation and other reforms identified by the \nCommission to ensure that the costs of serving new data centers or other large electric energy \nloads are not unfairly shifted to PJM’s existing ratepayers.  DOE also calls for all signatories to \nthe President’s Ratepayer Protection Pledge to stand by their commitments, including to “build, \nbring, or buy every kilowatt their facilities need—and cover every dollar of the infrastructure \nthat delivers it.  American households and businesses should not be footing the bill.”5 \nI. \nStatement of Principles Regarding PJM and President Trump’s Ratepayer \nProtection Pledge \n \nOn January 16, 2026, DOE Secretary Chris Wright, U.S. Department of Interior \nSecretary Doug Burgum, and others joined the Governors of all 13 PJM states to announce the \nStatement of Principles Regarding PJM, which encouraged PJM to adopt market rules to \nstrengthen grid reliability and reduce electricity costs for American families and businesses.  \nSubsequently, following the February 24, 2026 State of the Union address, on March 4 and July \n23, 2026, President Trump, Secretary Wright, and others held roundtables regarding the \nRatepayer Protection Pledge.  Signatory companies and others agreed to protect American \nconsumers from price hikes due to their addition of large load energy demand and related \ninfrastructure requirements, and to lower electricity costs for consumers in the long term.  Since \nthen, additional signatories have joined the Ratepayer Protection Pledge. \nThe Statement of Principles Regarding PJM, in turn, called for expeditious action to \naddress reliability and affordability concerns specifically in the PJM region.  It called for \naccelerating the development of reliable generation resources, protecting ratepayers from rising \n \n4 16 U.S.C. § 824d. \n5 Ratepayer Protection Pledge, supra note 2."},{"page":3,"startToken":593,"endToken":901,"text":"3 \n \nrates, and improving load forecasting and generator interconnection studies, among other \nreforms.6  It also specifically called for PJM to hold a backstop procurement auction by \nSeptember 2026 and “file tariff revisions at FERC expeditiously,” noting that since PJM “has \nalready received stakeholder input through the 2025 Critical Issues Fast Path (CIFP) process,” no \nfurther CIFP processes would be necessary.7 \nOn July 31, 2026, PJM filed a Reliability Backstop Procurement (RBP) proposal with the \nCommission in the captioned proceeding.  The RBP proposal calls for a one-time procurement of \nnew capacity to address the significant capacity shortfall for the 2027/2028 and 2028/2029 \nReliability Pricing Model (RPM) auctions for those delivery years, with a requested effective \ndate of September 29, 2026.8 \nOn September 29, 2026, the Commission issued its Order accepting certain aspects of \nPJM’s proposal.  The Commission determined that other portions of the proposal may be unjust \nand unreasonable, and, therefore, directed further procedures.9  Among other things, the \nCommission recognized “the looming capacity shortfall facing PJM” and the need for \nexpeditious action to maintain resource adequacy.10  The Commission found that PJM’s existing \nreliability backstop provisions may be insufficient to prevent resource adequacy concerns and \nthat PJM’s RPM is failing to keep pace with demand growth in the PJM region.11  The \nCommission recognized actions taken by President Trump to ensure that the costs of serving new \ndata center load are assigned to that load and are not borne by other ratepayers.12  In making \n \n6 U.S. Dep’t of Energy, Statement of Principles Regarding PJM (Jan. 2026), \nhttps://www.energy.gov/documents/statement-principles-regarding-pjm.  \n7 Id. \n8 PJM Interconnection, L.L.C., Dkt. No. ER26-3380-000 (filed July 31, 2026). \n9 See PJM Interconnection, L.L.C., 196 FERC ¶ 61,245 (2026). \n10 Id. P 3. \n11 Id. P 29. \n12 Id. P 161."},{"page":4,"startToken":901,"endToken":1352,"text":"4 \n \nfurther recommendations, the Commission emphasized that PJM’s RBP cost allocation \nmethodology must be consistent with the Commission’s cost-causation principles.13 \nII. \nCurrent State of Energy Demand in PJM Requires Immediate Action \nFrom 2020 to 2025, demand for electric energy in the United States has increased more \nthan 9% (i.e., 387 terawatt-hours (TWh)), from 3,918 to 4,305 TWh.14  While this load growth \noccurred across residential, commercial, and industrial sectors, the commercial end-use sector \ngrew the fastest.15  PJM is the largest grid operator in the country, serving 67 million people in \n13 states, plus the District of Columbia.  Over the same 2020 to 2025 period, consistent with the \nnational trend cited above, total real-time energy use in PJM increased more than 9% (i.e., 67.9 \nTWh), from approximately 743.0 TWh to 810.9 TWh.16  Every PJM annual long-term forecast \nsince 2020 has projected increased long-term demand growth, with the projected growth rate \naccelerating sharply since 2022.17 \nPJM’s capacity procurement procedures, however, are consistently failing to obtain \nadequate supply for the growth projected, let alone for the growth actually occurring.  PJM’s \nRPM has, as the Commission observed, “failed to keep pace with the unprecedented influx of \nlarge load” into the region.18  After years of auction delays, in December 2025, PJM fell 6,623 \n \n13 See id. PP 153-157. \n14 See U.S. Energy Info. Admin., Elec. Power Annual, tbl. 1.3 (Supply & Disposition of Elec., 2014 Through 2024) \n(Oct. 16, 2025), https://www.eia.gov/electricity/annual/table.php?t=epa_01_03.html; id., Short-Term Energy \nOutlook, tbl. 7a (U.S. Elec. Indus. Overview) (Sep. 2026), https://www.eia.gov/outlooks/steo/data/browser/#/?v=19. \n15 Id., Elec. Power Monthly, tbl. 5.1 (Sales of Elec. to Ultimate Customers: Total by End-Use Sector) (Sep. 24, \n2026), https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_1. \n16 See Monitoring Analytics, LLC, 2020 State of the Mkt. Rep. for PJM, vol. 1, tbl. 1-8 (Mar. 11, 2021), \nhttps://www.monitoringanalytics.com/reports/PJM_State_of_the_Market/2020/2020-som-pjm-vol1.pdf; id., 2025 \nState of the Mkt. Rep. for PJM, vol. 1, tbl. 1-9 (Mar. 12, 2026), \nhttps://www.monitoringanalytics.com/reports/PJM_State_of_the_Market/2025/2025-som-pjm-vol1.pdf. \n17 See PJM, 2020 Load Forecast Rep. (2020); PJM Interconnection, L.L.C., 2021 Load Forecast Rep. (2021); PJM \nInterconnection, L.L.C., 2022 Load Forecast Rep. (2022); PJM Interconnection, L.L.C., 2023 Load Forecast Rep. \n(2023); PJM Interconnection, L.L.C., 2024 Load Forecast Rep. (2024); PJM Interconnection, L.L.C., 2025 Long-\nTerm Load Forecast Rep. (2025). \n18 PJM, 196 FERC ¶ 61,245 at P 29."},{"page":5,"startToken":1352,"endToken":1742,"text":"5 \n \nMW short of its reliability requirement in its 2027/28 delivery year auction.19  PJM then fell \n6,831 MW short for its 2028/29 delivery year auction in July 2026.20  This places PJM in a worse \nposition than was anticipated when the Statement of Principles Regarding PJM and the \nRatepayer Protection Pledge were released in January and March 2026, respectively.  PJM’s \ninability to secure adequate capacity threatens grid reliability, energy security, and economic \ngrowth for the mid-Atlantic region, Appalachia, and beyond. \nIII. \nDepartment of Energy Position \nDOE further commends the Commission for its efforts in a separate proceeding to require \nthe six regional transmission organizations or independent system operators under its jurisdiction \nto justify or reform their rules governing how data centers, manufacturing facilities, and other \nlarge energy users connect to the electric grid.21 \nDOE also supports PJM’s efforts, in this proceeding, to reform its open access \ntransmission tariff.  DOE agrees with the Commission that PJM’s proposed tariff revisions may \nbe unjust and unreasonable in certain material respects.  In particular, DOE believes that the \nrevisions recommended by the Commission should be adopted by PJM to advance the principles \nof President Trump’s Ratepayer Protection Pledge—a pledge to which many utilities and others \nin the PJM region have signed and committed.22  DOE urges PJM to act swiftly to reform its \n \n19 PJM, 2027/2028 Base Residual Auction Rep. (Dec. 17, 2025), https://www.pjm.com/-/media/DotCom/markets-\nops/rpm/rpm-auction-info/2027-2028/2027-2028-bra-report.pdf. \n20 PJM, 2028/2029 Base Residual Auction Rep. (July 14, 2026), https://www.pjm.com/-/media/DotCom/markets-\nops/rpm/rpm-auction-info/2028-2029/2028-2029-bra-results-report.pdf. \n21 PJM Interconnection, L.L.C., 195 FERC ¶ 61,211, errata notice, 196 FERC ¶ 61,122, granting abeyance, 196 \nFERC ¶ 61,129 (2026); Midcontinent Indep. Sys. Operator, Inc., 195 FERC ¶ 61,212, errata notice, 196 FERC \n¶ 61,123, granting abeyance, 196 FERC ¶ 61,133 (2026); Sw. Power Pool, Inc., 195 FERC ¶ 61,213, granting \nabeyance, 196 FERC ¶ 61,128 (2026); Cal. Indep. Sys. Operator Corp., 195 FERC ¶ 61,214, granting recission and \nabeyance, 196 FERC ¶ 61,131 (2026); ISO New Eng. Inc., 195 FERC ¶ 61,215, granting abeyance, 196 FERC \n¶ 61,132 (2026); N.Y. Indep. Sys. Operator, Inc., 195 FERC ¶ 61,216 granting abeyance, 196 FERC ¶ 61,130 \n(2026). \n22 See Ratepayer Protection Pledge, supra note 2."},{"page":6,"startToken":1742,"endToken":2060,"text":"6 \n \nRBP proposal in accordance with the Commission’s guidance and submit those revisions \npursuant to FPA section 205.23  DOE encourages all Ratepayer Protection Pledge signatories to \nendorse such further reforms. \nA. Cost Allocation That Avoids Free Ridership  \nDOE shares the Commission’s concerns that PJM’s proposed RBP cost allocation model \nmay be unjust and unreasonable as filed.  The Commission found that PJM did not adequately \ndemonstrate that its Load Adjustment methodology would allocate RBP costs consistent with the \nCommission’s cost-causation principle.  This principle requires that “all Commission-\njurisdictional rates and charges must ‘reflect to some degree the costs actually caused by the \ncustomer who pays for them’ and costs must be allocated in a manner that is at least roughly \ncommensurate with benefits.”24  Compliance with this principle is evaluated by comparing the \ncosts assessed against a party to the burdens imposed or benefits drawn by that party.  In \nfurtherance of the Ratepayer Protection Pledge, DOE emphasizes the need to protect ratepayers \nfrom the costs associated with rising demand caused by other large load customers.  Such costs \ninclude the negative reliability impacts caused by new load growth that well-exceed historic \nforecasts. \nThe Commission recognizes the need for accurate and comprehensive load information.25  \nBy way of example, because large load demand in PJM exceeded forecasts for a number of years \nprior to the 2026/2027 and 2028/2029 delivery years, PJM’s cost allocation methodology \n(looking back only two years) does not appear to sufficiently allocate the costs of new capacity \nto serve all large loads that have caused the current resource adequacy shortfall.  DOE agrees \n \n23 See, e.g., PJM, 196 FERC ¶ 61,245 at P 160. \n24 KN Energy Inc. v. FERC, 968 F.2d 1295, 1300 (D.C. Cir. 1992); see also Ky. Pub. Serv. Comm’n v. Am. Elec. \nPower Serv. Corp., 193 FERC ¶ 61,110 (2025). \n25 PJM, 196 FERC ¶ 61,245 at P 154."},{"page":7,"startToken":2060,"endToken":2340,"text":"7 \n \nthat PJM’s tariff may omit large loads already included in PJM’s baseline forecast.  Such a result \nis at tension with both traditional cost-causation principles and President Trump’s Ratepayer \nProtection Pledge.  To address this concern, PJM should ensure that any cost allocation \nmethodology properly allocates costs and does not result in free ridership. \nB.  Mandatory Large Load Identification and Transparency \nDOE agrees with the Commission’s call for improved large load identification and \ntransparency to support a just and reasonable cost allocation.  To ensure that existing ratepayers \ndo not bear the costs of new large loads, PJM should have sufficient data to accurately identify \nthe material large load projects reflected in its forecasts and monitor their development.  A \ncapability to continuously track whether a project enters into service—and therefore benefits \nfrom the capacity and system investments procured to serve it—or is delayed, reduced, or \ncancelled, can help assign costs for new generation to the customers responsible for those \ninvestments. \nThe Commission recommends that “PJM should employ the most up-to-date load and \nresources forecasts to inform the Initial RBP Target.”26  DOE agrees.  Without up-to-date and \nproject-level identification, PJM cannot reliably reconcile its base forecast with Load \nAdjustments, avoid omissions and double counting, revise the RBP target when forecast load \nfails to materialize, or attribute demand growth to the appropriate zone and load-serving entity. \nC. Enable the Ratepayer Protection Pledge’s “Build, Bring, or Buy” Principle \nThe Commission accepted PJM’s framework for crediting qualifying new capacity \nbrought forward to serve new large load against the RBP target.  DOE supports this framework.  \nNew large loads should be able to meet their reliability needs by building qualifying new supply, \n \n26 Id. P 159."},{"page":8,"startToken":2340,"endToken":2548,"text":"8 \n \nbringing qualifying new capacity to the system elsewhere, or contracting for qualifying new \ncapacity.  There is substantial interest among market participants in this approach, as \ndemonstrated in comments in this docket.  However, PJM’s current RBP process does not \nestablish a clear path for such optionality and should be revised to do so. \nIV. \nResponsive Action \nDOE urges PJM to accept the accelerated option proposed by the Commission and to \nswiftly submit a revised tariff pursuant to FPA section 205 on or before October 29, 2026.  DOE \nlikewise encourages the numerous signatories to President Trump’s Ratepayer Protection Pledge \nparticipating in these dockets directly, or indirectly through the filings of trade associations, to \nsupport further reforms consistent with the Ratepayer Protection Pledge and DOE’s \nrecommendations herein.  Americans deserve reliable, secure, and affordable energy.  The \ngrowth of data centers and other industrial or commercial sector large loads is essential to \nAmerica’s economic prosperity and a foundation of modern life.  It is also essential that large \nload entities calling for that power pay for it—and the infrastructure required to deliver it. \nRespectfully submitted, \n \n \nJonathan D. Brightbill \nGeneral Counsel \nU.S. Department of Energy \n1000 Independence Avenue, SW \nWashington, D.C.  20585 \n(202) 586-5281 \ndoegeneralcounsel@hq.doe.gov \n \n \n \n \n \n \n \n \n \n \n \n \n/s/ Jonathan Brightbill"},{"page":9,"startToken":2548,"endToken":2617,"text":"9 \n \nCERTIFICATE OF SERVICE \n \nI hereby certify that I have this day served the foregoing document upon each person  \ndesignated on the official service list compiled by the Secretary in this proceeding. \n \n \nDated at Washington, D.C., this 7th day of October, 2026. \n \n \n \nJonathan Brightbill \nGeneral Counsel \nU.S. Department of Energy \n1000 Independence Ave., SW \nWashington, D.C.  20585 \n(202) 586-5281 \ndoegeneralcounsel@hq.doe.gov \n \n \n/s/ Jonathan Brightbill"}],"sections":[{"p":1,"at":0,"title":"Opening text","method":"opening text","endPage":2,"endAt":667,"startToken":0,"endToken":400},{"p":2,"at":667,"title":"I. Statement of Principles Regarding PJM and President Trump’s Ratepayer","method":"printed heading","endPage":4,"endAt":171,"startToken":400,"endToken":922},{"p":4,"at":171,"title":"II. Current State of Energy Demand in PJM Requires Immediate Action","method":"printed heading","endPage":5,"endAt":534,"startToken":922,"endToken":1436},{"p":5,"at":534,"title":"III. Department of Energy Position","method":"printed heading","endPage":6,"endAt":217,"startToken":1436,"endToken":1773},{"p":6,"at":217,"title":"A. Cost Allocation That Avoids Free Ridership","method":"printed heading","endPage":7,"endAt":366,"startToken":1773,"endToken":2113},{"p":7,"at":366,"title":"B. Mandatory Large Load Identification and Transparency","method":"printed heading","endPage":7,"endAt":1545,"startToken":2113,"endToken":2284},{"p":7,"at":1545,"title":"C. Enable the Ratepayer Protection Pledge’s “Build, Bring, or Buy” Principle","method":"printed heading","endPage":8,"endAt":351,"startToken":2284,"endToken":2393},{"p":8,"at":351,"title":"IV. Responsive Action","method":"printed heading","endPage":9,"endAt":5,"startToken":2393,"endToken":2549},{"p":9,"at":5,"title":"CERTIFICATE OF SERVICE","method":"printed heading","endPage":9,"endAt":465,"startToken":2549,"endToken":2617}]}