PJM's Backstop Procurement Pause: Re-size the 6.8 GW Target Before It Is Bought
PJM was meant to open the offer window for its Reliability Backstop Procurement on 30 September. It did not. On 29 September the Federal Energy Regulatory Commission accepted the proposal, suspended it for five months to an effective date of 28 February 2027, made it subject to refund, set three issues for a paper hearing and opened a parallel section 206 proceeding in Docket EL26-108. PJM confirmed the next day that the procurement would not start as planned and that the timing is to be determined.
The backstop is a response to two capacity auctions that failed to clear the region's reliability requirement. In January 2026 the White House National Energy Dominance Council and the governors of all 13 PJM states issued a statement of principles urging a backstop auction offering 15-year price certainty for new capacity, to begin no later than September 2026, with costs allocated to load-serving entities with data centres that had not self-procured or agreed to be curtailable.
New resources only, commercial operation by 1 June 2032, commitments of up to 15 years, and an initial target equal to the 2028/2029 shortfall, reduced by signed bilateral contracts and other showings of new supply. According to Utility Dive's account of the order, those include the $555 per MW-day weighted-average cap and the supplier collateral rules. On cost allocation, FERC suggested allocating costs on updated load forecasts rather than the forecast that sat behind the July auction, and said PJM should use the most up-to-date load and resource forecasts to set the initial procurement target.
On exits, it said costs should follow the load-serving entities in a zone if a transmission owner leaves PJM before the costs are recovered. Initial briefs are due 45 days from the order, which takes us to 13 November, with responses 20 days later. Chairman Laura Swett, as quoted by Utility Dive, said the Commission would not be forced into accepting a deeply flawed, eleventh-hour mechanism with billion-dollar implications for consumers. The Independent Market Monitor told FERC that the data centre forecast behind the 2028/2029 auction was built on load adjustments PJM received before 5 September 2025.
It says plainly that it does not have project-level data behind the distributors' load adjustments, and it counts only projects originally due in service by 2029. A section 205 filing by 29 October that adopts FERC's suggested approaches on exits and demand-side collateral, and removes the co-operative and municipal opt-out, would put the hearing into abeyance and keep a winter procurement possible. Second, re-base the target on a refreshed load adjustment review rather than on the July auction result. PJM is due to give an administrative update at the Market Implementation Committee on 7 October.