PJM Opens a 6 GW Backstop Auction September 30, After Its Regular Auction Cleared 525 MW of New Generation

PJM opens the bid window for its Reliability Backstop Procurement on September 30 and closes it on October 21, with results due by December 2. The grid operator filed the one-time auction at FERC on July 31 under docket ER26-3380-000. Trade coverage puts the target near 6 GW of new capacity. PJM defines it more narrowly. The target is the shortfall from its most recent capacity auction, less Fixed Resource Requirement load and supply, and less any bilateral contracts and self-supply that buyers document first.

The number behind the auction is 6,831 MW. That is how far PJM’s 2028/2029 Base Residual Auction fell short of the reliability requirement when results landed on July 14. The auction before it, for 2027/2028, came up roughly 6,500 MW short. Those were the first two auctions in PJM history in which the entire RTO missed the standard.

Set the backstop target against what the regular market actually delivered and the scale of the ask becomes clear. The 2028/2029 auction cleared 525 MW of new generation and generation uprates. PJM now wants roughly ten times that, committed inside a three-week bid window.

What the Auction Is Buying

The 2028/2029 auction procured 138,318 MW of unforced capacity, with another 10,864 MW committed under the Fixed Resource Requirement, for 149,182 MW in total. Cleared supply multiplied by the clearing price comes to $16.4 billion. The price landed at $325 per MW-day across the whole footprint, which is the FERC-approved cap. That is 2.5 percent below the 2027/2028 cap of $333.44 per MW-day, the third consecutive auction to run into the collar the states and FERC agreed.

Hitting the cap in back-to-back auctions while still missing the reliability requirement is the condition the backstop exists to answer. PJM holds a 14.7 percent reserve margin for 2028/2029. A shortfall does not mean the lights go out. It means PJM runs the delivery year on thinner reserves.

The backstop pays winners through 15-year capacity contracts, a term the regular market does not offer. Battery storage, gas, nuclear and clean generation can all bid. Speed is the sorting mechanism, because the capacity has to arrive in time to matter, and that favors resources with short construction schedules.

“Requiring new power plants to be somewhat close to new large loads actually gives a slight edge for energy storage resources because of their siting flexibility,” said Claire Lang-Ree, a clean energy advocate at the Natural Resources Defense Council.

Why It Matters

PJM has been explicit that new load is what moved the requirement. “These auction results show that demand for electricity continues to grow faster than electricity supply,” said David Mills, PJM president and CEO, when the July results came out. The supply mix that cleared is 46 percent natural gas, 20 percent nuclear and 18 percent coal, with demand response at 5 percent and solar at 1 percent.

The backstop is one of several tracks running at once. PJM began matching large load customers with new generation bilaterally on June 9, in contracts it describes as often spanning 10 years or more. It is developing Connect and Manage rules that let large loads join the system on the condition that they flex when the grid is tight. It won FERC approval for a temporary Expedited Interconnection Track covering up to 10 state-sponsored, shovel-ready projects. The backstop auction is the piece that fires if the voluntary tracks do not fill the gap.

For a developer, the calendar is the story. Bids are due October 21, results arrive by December 2, and the next regular Base Residual Auction, for 2029/2030, follows in December. A project that misses the backstop window waits for a market that has cleared at its price cap twice running.

The Locational Question

NRDC has flagged a risk that the auction design does not obviously resolve. If a plant built in Ohio ends up serving data centers in Virginia, somebody has to move the power. That means long-haul, multi-state transmission, and transmission built as a baseline project gets its cost spread across customers rather than charged to the load that caused it.

This is the same fight that has followed every large-load proceeding of the past year. PJM says the backstop allocates costs consistent with state preferences. Whether that holds depends on state regulators and utilities actually assigning the bill to the data centers, and that work happens after the auction clears, not inside it.

The auction will produce a number in December. It will not, by itself, settle who pays it.

Critical Perspective

The arithmetic of this auction deserves a hard look. PJM’s regular market, running at its price cap, drew 525 MW of new generation and uprates for 2028/2029. The backstop asks for roughly ten times that inside a three-week window. If the binding constraint were price signal alone, the cap would be the thing to move. PJM and the states set that cap deliberately, so the backstop is an attempt to buy supply the capped market did not summon, using a longer contract instead of a higher price.

The 15-year term is the real instrument here, and it is worth naming what it does. It shifts risk from developers onto whoever ultimately pays, for a decade and a half, on capacity procured under time pressure. That may be the correct trade. It is not a free one, and the auction clears before anyone has settled the bill.

Treat the 6 GW figure as an upper bound rather than a target. PJM reduces it by documented bilateral contracts and self-supply, which means the number shrinks as large loads sign their own deals. That is the design working as intended. It also means the headline capacity and the capacity actually procured may differ substantially, and the December results are the only figure worth quoting later.

NRDC’s locational concern is not hypothetical in this footprint. PJM load growth concentrates in northern Virginia while cheaper generation sites sit west of the Alleghenies. Power built in Ohio for Virginia data centers needs wires, and transmission classified as a baseline project spreads its cost across all customers. PJM’s answer, that costs will be allocated consistent with state preferences, defers the question to 13 states and the District after the fact.

One piece of framing should be resisted. A shortfall against the one-event-in-10-years standard is not a forecast of outages. PJM holds a 14.7 percent reserve margin for the delivery year and says plainly that the system would run on thinner reserves, not that it would fail. Reliability language carries weight in a proceeding about who pays, and that weight should be earned by the numbers rather than borrowed from the word.

Sources

• PJM Interconnection: PJM Capacity Auction Procures 138,318 MW of Generation Resources (July 14, 2026)
• Energy-Storage.News: PJM targets data centre demand with 6GW backstop auction; BESS expected to have competitive edge (September 8, 2026)
• PJM eTariff filing, FERC Docket ER26-3380-000, accession 20260731-5214 (July 31, 2026)
• PJM Inside Lines: PJM Reliability Backstop Proposal Outlines Steps To Secure New Supply and Maintain Reliability

Related Coverage

• PJM 2028/2029 Capacity Auction Clears at $325/MW-Day Cap, Falls 6,831 MW Short as Data-Center Demand Climbs: PJM capacity auction shortfall
• PJM 2027/28 Capacity Auction Procures 134,479 MW at Price-Cap $329.17/MW-Day: PJM capacity auction results
• PJM Capacity Auction Hits $16.4B Record: PJM capacity auction record
• Data Centers Drove $6.3 Billion of PJM’s Latest Capacity Auction Cost, Market Monitor Says: PJM capacity auction cost