PJM Delays Emergency Capacity Auction After FERC Finds Cost Allocation Rules Unjust

The U.S. regional grid operator PJM Interconnection has postponed a supplemental capacity auction meant to cover a projected power shortfall, after the Federal Energy Regulatory Commission gave only partial approval to the proposal and demanded revisions to its cost-sharing framework.

PJM, which coordinates electricity supply across 13 states and the District of Columbia, had sought to rapidly procure 6.8 gigawatts of new generation capacity for the 2028–2029 delivery period. The push came after the operator fell short of adequate supply in two consecutive base auctions. The proposed bid cap was set at $555 per megawatt-day.

FERC approved elements of the plan but directed PJM to correct provisions governing cost distribution, the exit of transmission owners, and collateral requirements for load-serving entities. The commission determined that PJM had failed to demonstrate its cost-allocation approach met the “just and reasonable” standard. One sticking point: under the draft rules, an energy cooperative in Northern Virginia — a region home to a high concentration of data centers — would have been required to post roughly $2 billion in collateral.

“This commission will not be forced to accept a deeply flawed, last-minute procurement mechanism with billion-dollar consequences for consumers,” said FERC’s chair.

The regulator also underscored a broader principle: the rapid growth of large electricity loads cannot be managed through federal market mechanisms alone, and states must take an active role. FERC said procurement costs should fall on the entities whose demand drives the need, informed by updated load forecasts. PJM has not announced a new timetable for the auction.

Source: Utility Dive