The PJM Interconnection has filed a proposal with the Federal Energy Regulatory Commission with the goal of commencing a Reliability Backstop Procurement (RBP) on Sept. 30, 2026.
The move results from an accelerated stakeholder process and is "guided by PJM’s core mission to maintain reliability consistent with the direction in the PJM Board of Manager’s letter from Jan. 16 and the stated goals by PJM governors and the White House National Energy Dominance Council," it said on July 31.
The proposal advanced by the PJM Board of Managers charts a parallel path to secure new generation resources against the 6,831 MW shortfall resulting from the recent capacity auction for the 2028/2029 Delivery Year.
The Reliability Backstop Procurement would secure resources for terms of 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 initial procurement target will be decreased by the sum of qualifying new resources that are the subject of executed bilateral contracts or otherwise bring new capacity to the system.
Proposed terms for supply eligibility, cost allocation, credit requirements, settlement and more are summarized in the CIFP Reliability Backstop Procurement – PJM Board Decision issued July 27.
A stakeholder workshop is scheduled for Aug. 10, when PJM staff will perform a manual page turn for the Reliability Backstop Procurement to provide more-detailed information on key dates, participation requirements and project evaluation and selection processes.
The success of the procurement requires state participation, the RBP proposal states, as states have authority over how retail costs are allocated from the Reliability Backstop Procurement to Load Serving Entities and end-use customers.
The Board is “acutely aware of the affordability pressures facing consumers. The present trajectory of rapid load growth, tightening supply and rising capacity costs is not sustainable,” the letter said.
“The region needs substantial new investment in supply, and the central affordability question is how the costs of that investment should be allocated. The federal government, PJM states and large load customers have emphasized that new large loads should bear the costs they cause. Because PJM does not have jurisdiction to allocate retail costs directly to individual data centers, state action will be essential.”
A July 27 letter by the PJM Board of Managers described the RBP as the first formal filing at FERC among other efforts underway, including holistic market reform, and emphasized need for joint, coordinated effort.
Another filing from PJM expected to be submitted Aug. 7 will propose how – in concert with state authorities and Members – to facilitate necessary reductions during times of extreme grid stress of large loads that do not procure their own power supplies.
Previously referred to as Connect and Manage, the July 27 summary of PJM’s Interim Resource Adequacy Service (IRAS) proposal outlines the need for a Large Load Registry, Emergency Procedures and more.
The registry would inform load reduction priorities and improve load forecast accuracy. Enhanced data collection is also proposed to assist states’ assessment of whether new large loads are bringing their own new supply (BYONC). Load reductions, if necessary during times of capacity shortage, would be triggered prior to Pre-Emergency Load Management Actions.
Both the RBP and the pending IRAS proposals resulted from extensive feedback gathered in the recent Critical Issue Fast Path process from PJM Members, states, regulators, consumer advocates and more.
“Focused collaboration, initiated by the Jan. 16 Board letter, will continue to be essential,” the Board echoed in its July 27 letter, as stakeholders engage in a holistic review of capacity, energy and ancillary services markets described in PJM’s Powering Reliability Through Market Design paper, with the intention of proposing long-term reforms.
