PJM filed a two-part data center capacity plan at FERC on 31 July 2026

PJM Interconnection filed two proposals at the Federal Energy Regulatory Commission on 31 July 2026 to address a 6.8 GW capacity shortfall left uncleared by its most recent base residual auction^[2]. The filing sets up a one-time Reliability Backstop Procurement auction running from 30 September to 21 October, and a parallel curtailment requirement for large loads that do not self-supply capacity^[1]. Whether existing ratepayers end up bearing the cost depends almost entirely on what the 13 states in PJM's footprint choose to do next.

The two-part mechanism

The backstop auction targets the 6,831 MW gap between PJM's reliability requirement and the capacity cleared in the 2028/29 delivery year^[1]. PJM proposes a price cap of $555/MW-day - well above the $325/MW-day cap that cleared in the last base auction - and will commit winning resources to 15-year terms. The Natural Resources Defense Council estimated the total outlay at up to $20 billion^[2]. A bilateral matchmaking phase, in which new loads and new generators negotiate directly, was already underway before the FERC filing; any remaining shortfall after bilateral deals close will go to the centralized auction^[1].

The second proposal creates an Interim Resource Adequacy framework requiring data centers and other large loads above 50 MW to register in a new large-load registry^[1]. Sites that do not bring their own capacity supply will face mandatory curtailment during grid stress events, starting in 2027^[1]. PJM intends to announce backstop auction results by 2 December, before the December base residual auction for the 2029/30 delivery year^[2].

The cost-allocation gap states must fill

The filing is explicit about its own limits. "The RBP framework relies on each of the PJM states to refine, for purposes of cost allocation, which retail loads - including which 'large loads,' as each state defines such loads - should be allocated the costs of resources procured through the RBP," PJM said in the FERC filing. Backstop costs will first be allocated to load zones based on their pro-rata share of the procurement target, then passed to load-serving entities within those zones - but without state action, it remains unclear whether those costs land on data centers or on ordinary ratepayers.

Pennsylvania has moved furthest. Governor Josh Shapiro's Responsible Infrastructure Development (GRID) Standards, released in May 2026, require data center developers to pay for all grid infrastructure costs triggered by their projects and to source an escalating share of clean-firm energy - 10% by 2027, rising to 32% by 2035. The Pennsylvania House passed HB 2650 on 24 June 2026 to codify those standards in law, tying state tax benefits to GRID certification. Other states in PJM's territory have not yet moved comparable frameworks.

The structural tension analysts flag

Aurora Energy Research's Julia Hoos described the combined plan as a workable stopgap but warned it "is a system that is designed to break within a year or two"^[1]. The core problem: if generators can sign 15-year bilateral deals directly with data centers through the backstop process, they have little incentive to show up in PJM's regular capacity auction. That risks hollowing out the central market precisely when non-data-center load growth - from housing, manufacturing, and EV charging - is also pushing the system toward shortage^[1].

PJM's board acknowledged the tariff is not final until FERC acts. The commission's response, expected before the September auction window opens, will determine whether the bilateral matching phase and the curtailment rules survive intact - and how aggressively FERC pushes states to close the cost-allocation gap before the December base auction.