In the near future PJM will file proposals with the Federal Energy Regulatory Commission to take theses and other steps--
-- Hold a one-time backstop generation capacity auction in September to fill a 6.8 GW shortfall in generation need to ensure grid reliability;
-- Establish a Large Load Registry to track the location and loads of sites so they can be better managed during capacity shortages. New large loads that do not bring their own generation by June 1, 2027 and that have not secured their own power will be subject to curtailment proper to deployment of pre-emergency load management procedures.
More Demand, Fewer Resources
PJM said, new Large Loads are forecasted to increase by an estimated 70 GW by 2038, while some 15 GW of electricity generating resources have retired since 2022.
Meanwhile, the most recent capacity auction for the 2028/2029 Delivery Year resulted in a 6,831 GW shortfall below the system’s Reliability Requirement.
The Reliability Requirement is a measure of capacity that can reliably serve grid needs during extreme conditions under the standard of one loss of load event every 10 years.
“The Board is also acutely aware of the affordability pressures facing consumers,” the letter added. “The present trajectory of rapid load growth, tightening supply and rising capacity costs is not sustainable. The region needs substantial new investment in supply, and the central affordability question is how the costs of that investment should be allocated.”
Facilitated Matchmaking
To avoid over-procurement, the ultimate quantity of generating resources secured through bilateral contracts and self-supply arrangements will reduce the target of the Reliability Backstop Procurement.
PJM expects initial matches in August between buyers and sellers interested in bilateral contracting.
Launched June 9 with a Request for Proposals, this process is expected to continue until early next year.
Running the bilateral matching process in parallel with the procurement process gives market participants another path to bring new supply online while reducing the amount PJM ultimately needs to procure.
Backstop Procurement
PJM proposes to conduct a one-time Reliability Backstop Procurement from Sept. 30 through Oct. 21, with results released in early December.
Commitments of up to 15 years will be finalized prior to the December capacity auction for the 2029/2030 Delivery Year.
PJM said resources eligible to participate in the auction would have to be new power resources or those that did not receive a commitment for the 2028-29 delivery year.
The definition of “new power resources” is included in the PJM announcement.
To maintain affordability while incentivizing new resources, PJM proposed to cap the total cost of accepted supply offers at $555/MW-day.
[A cap of $325/MW-day applied to the last auction earlier in July. Without this cap, PJM said prices would have surged to $554.72/MW-day in most areas, including Pennsylvania. Read more here.]
PJM also said it will exclude new large loads from demand forecasts for general capacity auctions starting with 2029-30 so existing consumers will not bear the higher capacity costs caused by new large loads that do not bring, or otherwise contract for, the new supply necessary to serve them.
Large Load Registry
PJM will develop and maintain a Large Load Registry to improve load forecast accuracy and transparency; this has been supported by a broad cross-section of PJM stakeholders.
Large Loads are defined as end-use customer load that has a cumulative peak load quantity of at least 50 MW at a single site behind one or more delivery points/points of interconnection within a one-mile radius.
During capacity shortages, new Large Loads that do not bring their own generation by June 1, 2027, and have not otherwise secured supply, will be subject to curtailment prior to deployment of Pre-Emergency Load Management.
Compensation to customers directed to reduce load during grid stress will be subject to a FERC-approved compensation rate and jurisdiction of state authorities.
The proposed cost allocation framework aligns with the Ratepayer Protection principles endorsed by data centers, the White House and PJM governors, and respects state authorities, the Board noted.
“The federal government, PJM states and Large Load customers have emphasized that new Large Loads should bear the costs they cause,” the Board letter stated. “Because PJM does not have jurisdiction to allocate retail costs directly to individual data centers, state action will be essential. PJM will support those efforts by providing information from the new Large Load Registry and other data available through its settlement and billing processes.”
Click Here for the PJM announcement.
The PJM Interconnection coordinates the wholesale electricity grid and markets for all or parts of 13 states—Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia—plus the District of Columbia.
Related Articles This Week:
-- Independent Fiscal Office Reports Average Cost Of Electricity In PA Jumped 14.6% Over Past Year, Total Average PA Electricity Bill Has Increased 20.6% Since 2024 [PaEN]
-- FYI: -- A.I. Data Center Legislative Scorecard: Pennsylvania Failed To Finalize Meaningful Legislation On Energy Affordability, To Increase Electric Generation And Give Communities The Tools They Need To Cope With A.I. Proposals [PaEN]
NewsClips:
-- Utility Dive: PJM Board Proposes Backstop Capacity Auction In September, Data Center Curtailment Plans
-- WHYY - Zoe Read: ‘We Will Not Be Bullied:’ Plymouth Township Pushes Back Against Developer Or Proposed A.I. Data Center In Montgomery County
-- Inquirer: Plymouth Township Officials In Montgomery County Say A.I. Data Center Developer ‘Bullied’ And ‘Intimidated’ Them, He Says That’s A ‘Bold-Faced Lie’ Bringing Legal Challenge To Local Zoning
-- Middle Susquehanna RiverKeeper Blog: Concerned Citizen Involvement Is Vital In Addressing A.I. Data Center Projects And There Are Many Ways To Get Involved
-- PennLive Guest Essay: A.I. Data Center Are Coming To PA, Here’s How Watts Twp., Perry County Can Protect Itself While Benefiting - By Jim Enders, Member Plumbers, Pipefitters Local 520 [Who Construct These Facilities And Move On, Rarely Living With The Consequences - Although Enders Says He’s From Perry County]
[Posted: July 28, 2026] PA Environment Digest