Post: White House and Governors issue principles on data center demand

White House and Governors issue principles on data center demand 

National Energy Dominance Council (NEDC) Chairman and US Interior Secretary Doug Burgum, US Energy Secretary Chris Wright, and the governors of the states located in the PJM Interconnection have signed a Statement of Principles Regarding PJM, urging PJM to propose changes to its Open Access Transmission Tariff (Tariff) with respect to large load additions.  

The statement, published on January 15, urges PJM to provide 15-year price certainty for new capacity resources. This can be accomplished by holding a Reliability Backstop Auction to procure new capacity resources commencing no later than September 2026 and to provide 15-year price certainty for new capacity resources clearing in such Auction.  

The statement principles also provide that PJM should allocate the cost of any new capacity procured through the backstop procurement to load serving entities (LSEs) with new data centers that have not self-procured new capacity or not agreed to be curtailable, and any remaining costs should be allocated to LSEs based on their remaining net short positions.  

The Base Residual Auction (BRA) PJM held for the 2026-27 and 2027-28 delivery years included a price collar. While the price collar is not currently approved for future auctions, the statement called on PJM to extend the price collar to apply to the next two BRAs (2028-29 and 2029-30 delivery years), at the current rate level. It also called for PJM to commence a stakeholder process to reform the capacity market to ensure long-term viability and prevent consumers from bearing excessive ongoing costs, with the expectation that these reforms be implemented in time for the BRA currently scheduled for May 2027. 

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