The Federal Energy Regulatory Commission on Oct. 9 issued an order in response to a filing submitted by the PJM Interconnection in which the grid operator proposed actions tied to large loads.
On August 13, 2026, PJM submitted proposed revisions to its Open Access Transmission Tariff and Reliability Assurance Agreement to establish:
• A definition of Large Load;
• A Large Load Registry;
• A new Interim Resource Adequacy Service (IRAS);
• A requirement for Load Serving Entities (LSE) serving New Large Load to designate new capacity resources in an amount at least equal to the New Large Load’s peak load to avoid the New Large Load being subject to IRAS;
• Rules for Bring Your Own New Capacity (BYONC) arrangements; and
• Rules to exclude Eligible New Large Load from the Variable Resource Requirement (VRR) curve beginning with Delivery Year 2029/2030.
PJM states that, beginning in the 2027/2028 Delivery Year, it will be short of sufficient capacity to meet the PJM Region Reliability Requirement, particularly due to data center load growth and the pace of data center interconnection.
PJM’s proposed tariff revisions would implicate and assign responsibilities to several entities in PJM, including the Electric Distributor, the LSE, and the Transmission Owner.
PJM states that each element of the filing is severable, although some elements build upon each other.
PJM explains that, to facilitate Commission approval and smoothly implement its IRAS framework on June 1, 2027, PJM consents to the Commission’s exercise of authority to modify and/or sever the proposed Tariff language.
PJM requests that, if the Commission elects to modify or sever any portion of the proposal, it should expressly prescribe the revised rate or rule.
The majority of PJM’s proposed Tariff revisions are not intended to take effect until June 1, 2027, consistent with the start of the 2027/2028 Delivery Year.
However, PJM requested an effective date for its entire filing of October 12, 2026, which PJM argues is necessary so that it may modify the planning parameters for the VRR curve underlying the 2029/2030 Base Residual Auction (BRA) in time for the 2029/2030 BRA set to run in December 2026.
In its order, FERC accepts PJM’s proposal to establish a definition for Large Load and a Large Load Registry (Docket No. ER26-3515).
“We find that those two elements of PJM’s proposal are just and reasonable and not unduly discriminatory or preferential. Given PJM’s consent to sever or modify its proposal, we do so here. We find that the elements of PJM’s proposal to establish a new definition of Large Load and a Large Load Registry are severable from the remainder of the filing and therefore may be accepted even though we reject the remainder of the proposal.”
FERC said that while it recognizes the imminent capacity shortfall in PJM, “we find that two key aspects of PJM’s proposal -- IRAS and BYONC -- are either outside of the Commission’s authority or have not been sufficiently demonstrated to be just and reasonable and not unduly discriminatory or preferential.“
FERC said it does not take this decision lightly. “But given the significant discrepancies between PJM’s transmittal letter description of its proposed IRAS framework and its proposed Tariff revisions, as well as the lack of justification for many aspects of IRAS and BYONC, we cannot find that these elements of PJM’s proposal are just and reasonable. We therefore reject these elements of the proposal.”
However, FERC provides guidance on how PJM could modify its proposal should PJM seek to refile it, it noted.
Moreover, because the elements of PJM’s proposal other than the Large Load definition and Large Load Registry represent an integrated package that must be viewed as a whole, “we reject the remainder of PJM’s proposal.”
PJM, while consenting to severance and modification of the proposal, acknowledges that the RAA and OATT revisions are designed to work in lockstep and provide complementary pieces, FERC said.
“We find that the remaining elements of PJM’s proposal, such as the proposed rules for BYONC arrangements and the exclusion of Eligible New Large Loads from the VRR curve, are not simply complementary, but instead are inextricably linked.”
For example, FERC said, the new obligation for LSEs seeking to use Network Integration Transmission Service to serve New Large Load to bring new capacity to avoid curtailment under IRAS is foundational to both the IRAS and BYONC frameworks.
“It also establishes the need for the rules for BYONC arrangements and facilitates excluding Eligible New Large Loads from the VRR curve. As such, we conclude that, contrary to PJM’s statements in its transmittal, the only elements of its proposal that are severable are the proposed definition of Large Load and the proposed Large Load Registry, which can be implemented independent of the IRAS and BYONC frameworks.”
