On September 29, 2026, FERC accepted PJM’s plan for a one time purchase of new power supply and then suspended it for five months. FERC is the federal agency that oversees wholesale electricity markets and the grid operators that run them. PJM runs the grid for 13 states and the District of Columbia. The plan would buy new capacity, which is a promise from a power plant or similar resource to be available when the grid needs it. The suspended plan would take effect on February 28, 2027, and FERC can still order refunds and changes before then. FERC order
Why PJM wants to buy more supply
PJM’s July 2026 capacity auction, for the year that starts June 1, 2028, came up 6,831 megawatts short of what PJM needs. A megawatt is a unit of electric power. Demand from AI data centers and other large customers is the main reason for the gap. The backstop would fill it with commitments of up to 15 years from new resources. PJM had planned to open bidding on September 30, 2026. PJM Inside Lines
What PJM has to fix
FERC found that three parts of the plan may fail the federal standard that rates be just and reasonable. The first is how the bill is split. PJM would divide costs among local utility areas based on load forecast adjustments that utilities report. FERC said some large customers never appear in those reports because PJM already counted them in its base forecast. FERC suggested a different measure. It would compare each area’s actual load in the 2026/2027 delivery year with its latest forecast for 2028/2029. FERC also told PJM to use current forecasts to set the 6,831 megawatt target itself. FERC order
FERC also questioned an exemption for cooperatives and city owned utilities whose rates no state regulates. FERC reasoned that a large customer on a cooperative system is just like a large customer anywhere else. So the exemption may be unduly discriminatory.
The second problem is what happens if a utility that owns power lines leaves PJM. PJM wanted that utility to pay the remaining commitments. FERC said the real buyers are the load serving entities, which are the companies that sell power to homes and businesses. Those companies, not the line owner, may be the right ones to pay.
The third problem is the security deposit. Each load serving entity would post $1.5 million for every megawatt assigned to it, about half the contract value. FERC said PJM gave no default rate or other math to support that figure. It also left only 15 days between learning the amount and paying it. One Virginia cooperative estimated its deposit at about $1.95 billion, more than its total assets. FERC order
| Issue | PJM’s filed plan | After FERC’s order |
|---|---|---|
| Start date | Bidding opens September 30, 2026 | Plan suspended until February 28, 2027 |
| Splitting the cost | Based on utilities’ reported load forecast adjustments | FERC suggests actual load compared with the latest forecast |
| Cooperative exemption | Unregulated cooperatives and city utilities could opt out | Exemption may be unduly discriminatory |
| Leaving PJM | The utility that owns power lines pays | Load serving entities in that area may pay instead |
| Security deposit | $1.5 million per megawatt, due 45 days before the year | Amount and timing sent to written briefing |
What FERC left in place
FERC approved the cap of $555 per megawatt per day on the average price of winning offers. It approved paying each winner its own bid. The screening tests that keep out speculative projects survived, and so did the 15 year term. FERC order Winners must still offer their supply into PJM’s regular auctions at a price of zero, so customers do not pay twice. A project that misses its start date still pays a penalty of 20 percent of its price.
The timeline
PJM said it will not run the procurement on the original schedule and that actual timing is still to be determined. It planned a short update at a committee meeting today, October 7. PJM Inside Lines Under the order, written briefs on the three problems are due November 13, 2026. Responses are due December 3, 2026.
FERC said it would likely pause that briefing if PJM makes a new filing within 30 days of the order. That window closes October 29, 2026. FERC said a new filing could make the briefing unnecessary and speed up the auction.
For a large customer, the practical effect is that no backstop winners will be known before PJM’s regular auction opens on December 9, 2026. The backstop supply was never meant to run before the 2028/2029 delivery year. What the suspension delays is the date developers learn which projects won. Meanwhile, large customers and developers can keep signing private supply contracts, which shrink the amount PJM must buy centrally. Latitude Media
Tomorrow’s topic
MISO’s fast-track study process for large loads and generation.