Post: PJM Board directs FERC filing on Reliability Backstop Procurement and Interim Resource Adequacy

PJM Board directs FERC filing on Reliability Backstop Procurement and Interim Resource Adequacy

In a letter published on July 27, the Board directed PJM to file two proposals with the Federal Energy Regulatory Commission (FERC). The Board determined that PJM must take timely action within its control to begin restoring resource adequacy and is directing PJM management and staff to proceed with a filing at FERC that includes the following major elements:

• PJM will develop and maintain a registry of Large Loads. Electric Distributors will be required to provide the information necessary for PJM to improve the accuracy and transparency of load forecasts and to administer the Reliability Backstop Procurement and “Interim Resource Adequacy Service.” Relevant information from the registry will be made available to entities responsible for administering related processes and, to the extent permitted by applicable confidentiality requirements, to the public.
• PJM will conduct a Reliability Backstop Procurement beginning in September 2026, with an initial target equal to the capacity shortfall identified in the 2028-29 Base Residual Auction, excluding Fixed Resource Requirement load and supply. The procurement target will be reduced to reflect documented bilateral contracts and self-supply arrangements for new capacity serving new load.
• Electric Distributors will be required to implement an Interim Resource Adequacy Service for new Large Loads that, as of June 1, 2027, do not bring sufficient capacity to serve their resource adequacy needs and cannot otherwise be served at the 1-in-10 reliability standard. Load reductions under this service will occur prior to the deployment of Pre-Emergency Load Management.
• Electric Distributors will be required to implement a FERC-approved compensation rate for Large Load customers that are directed to reduce their consumption from the transmission system. Compensation will be based on verified performance. Determinations as to which retail customers may fund such a program or whether specific Large Loads would be entitled to such compensation (or may waive such compensation consistent with the Ratepayer Protection Pledge) will be determined by state authorities.