The PJM Interconnection has filed an amended proposal with the Federal Energy Regulatory Commission with the goal of commencing a Reliability Backstop Procurement on March 1, 2027.

Central to the filing are modifications to three elements of the original filing: the method for determining the cost allocation for Reliability Backstop charges, LSE credit requirements and LSE exit responsibilities. 

An LSE is a regulated entity that buys or manages electrical energy supply for end-use customers.

The process is intended to fill the approximately 6,800 MW generating capacity shortfall, which will be recalculated with updated information given the new RBP timeline, from PJM’s 2028/2029 Base Residual Auction and to allocate the costs for that new capacity to the Large Loads that are driving them. 

The shortfall in the last two capacity auctions conducted by PJM is driven by the rapid increase in electricity demand from Large Loads, which is outpacing the addition of new power supply, it said.

On Sept. 29, FERC largely accepted PJM’s initial RBP proposal but suspended its execution for five months to settle certain topics.

PJM said its approach follows the path advanced by the PJM Board of Managers earlier this year to secure new generation resources against the 6,831 MW shortfall of capacity resources procured from the 2028/2029 Base Residual Auction. 

It consists of two parallel paths: the RBP proposal and the ongoing facilitation of private bilateral contracts between Large Loads and capacity suppliers.

These actions are consistent with the principles stated in January 2026 by governors of PJM’s 13 states and the White House National Energy Dominance Council, it said.

New Procurement Dates

The updated PJM proposal sets the timeline for the RBP procurement to launch March 1. Electric Distributors, the regulated entities that own the electric distribution system, will report new Large Load quantities prior to the March bid window opening. 

The bid window would close March 28, with the final procurement target and supply amounts determined on April 28, followed by posting of results on May 10.

The RBP still aims to secure resources for up to 15 years with a maximum willingness to pay equal to a MW-weighted average of $555/MW-day. To guard against double procurement, the target will be decreased by the number of qualifying megawatts procured through executed bilateral contracts. PJM reviewed the amended proposal at a Special Members Committee meeting on Oct. 22.

Cost Allocation

PJM now proposes that cost allocation to load serving entities will be based on Large Load growth between the actual summer peak load in 2026 and the forecast for the 2028/2029 Delivery Year. For this time period, electric distribution companies will be required to provide PJM firm Large Load growth, and this will be assigned to each zone based on the zone’s contribution to load growth.

Credit and Collateral

The PJM proposal aims to require LSEs responsible for RBP charges to post appropriate credit, including a revised lower uniform credit rate and payment terms. These revisions offer an approach to strike a reasonable balance between protecting PJM’s markets and Members against the risk of default while ensuring that market participants have flexibility to manage collateral requirements.

LSE Exit Responsibilities and More

The PJM filing also addressed payment of RBP charges should an LSE exit PJM so that they remain responsible for those charges for the remainder of the commitment term.

Additional updates to the proposal also:

  • Remove the prior provision to allow certain municipal utilities and cooperatives to opt out of the Reliability Backstop Procurement
  • Require a Peak Shaving Adjustment plan for a minimum of five years as a requirement for the Peak Shaving Adjustment opt-out of the RBP
  • Adjust site control requirements only to RBP Sell Offers not already under study by PJM
  • Allow more time to cure deficiencies within RBP Sell Offers beyond the close of the procurement window
  • Clarifiy updates on DR/DER requirements for participating as qualifying RBP offsets