PJM Refiles Its 6,831 MW Backstop Procurement for a March 1 Launch and Bills Large-Load Growth Since Summer 2026

Capacity & Wholesale Markets Policy & Markets Regulatory
Marin Holt
October 31, 2026
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7 minutes read

Proposed procurement launch: March 1, 2027
Capacity shortfall from the 2028/2029 Base Residual Auction: 6,831 MW
Maximum willingness to pay: $555/MW-day, MW-weighted average
Contract term: up to 15 years
Results posted: May 10

PJM Interconnection filed an amended Reliability Backstop Procurement proposal with the Federal Energy Regulatory Commission on October 29, 2026. The grid operator runs the wholesale market for 13 states and the District of Columbia. The filing targets a March 1, 2027 launch for a one-time procurement against a 6,831 MW shortfall in capacity resources from the 2028/2029 Base Residual Auction. PJM filed the amendment one month after FERC accepted the original plan on September 29 but suspended its execution for five months.

Three elements changed. Cost allocation now follows firm large-load growth between the actual summer peak load in 2026 and the forecast for the 2028/2029 delivery year. Electric distribution companies must report that growth to PJM, and each zone pays by its contribution to it. Load-serving entities face a lower uniform credit rate and revised payment terms. An entity that leaves PJM stays responsible for its backstop charges for the rest of the commitment term.

Under the new timeline, electric distributors report new large-load quantities before the bid window opens on March 1. The window closes March 28. PJM sets the final procurement target and supply amounts on April 28 and posts results on May 10. The procurement still seeks resources for up to 15 years. The maximum willingness to pay stays at a MW-weighted average of $555/MW-day.

The target is not fixed. PJM said it will recalculate the 6,831 MW shortfall with updated information under the new timeline. It will also subtract qualifying megawatts procured through executed bilateral contracts between large loads and capacity suppliers. That subtraction guards against buying the same capacity twice.

The filing removes the earlier provision that let certain municipal utilities and cooperatives opt out of the procurement. A Peak Shaving Adjustment opt-out now requires a plan covering at least five years. Site control requirements apply only to sell offers not already under study by PJM. Sellers get more time to cure deficiencies after the window closes. The filing also clarifies when demand response and distributed energy resources count as qualifying offsets.

FERC’s September 29 order largely accepted PJM’s first proposal but suspended its execution for five months to settle certain topics. RTO Insider reported that FERC had recommended a revised proposal as the alternative to a five-month paper hearing. PJM reviewed the amended package at a Special Members Committee meeting on October 22. PJM said the shortfall in its last two capacity auctions came from large-load demand growth that outpaced new supply.

Why It Matters

The allocation formula is the part to watch. It bills the zones where firm large-load growth shows up between the 2026 summer peak and 2028/2029. The original design spread costs across zones by a pro rata share of the target. Microgrid Media noted that the new method does not set each customer’s retail tariff. Who pays inside a zone still depends on the utility, the state regulator and the customer contracts.

FERC has not approved the formula. Neither the March 1 date nor the 6,831 MW gap is capacity already bought. A developer deciding whether to bid faces a $555/MW-day cap, a term of up to 15 years and a target that shrinks with every bilateral contract signed before April 28. The order that matters next is FERC’s answer to this filing.

Critical Perspective

The new allocation rests on firm large-load growth that electric distributors report to PJM, so the companies that serve the data centers also supply the numbers that set their own zone’s bill. The 6,831 MW target will be recalculated and then reduced by bilateral contracts, so bidders learn the real size of the procurement on April 28, a month after the window closes on March 28. The $555/MW-day cap and the term of up to 15 years survived unchanged, which suggests the September 29 suspension was never about price. Removing the municipal and cooperative opt-out puts public power entities that never signed a data center into the same charge. FERC suspended the first version for five months. If it takes that long again, does a March 1 launch survive, and who carries a 15-year obligation if a large load reported in 2026 never arrives by 2028/2029?