The Department of Energy has weighed in on a dispute over how PJM Interconnection pays for emergency capacity additions, urging the grid operator to change its plan so that data centers and other large new loads don't push costs onto existing customers. In a filing with the Federal Energy Regulatory Commission, DOE said PJM should adopt the cost-allocation fixes FERC identified last month when it put the reliability backstop procurement on hold. The filing appears to be DOE's first statement of position at FERC in at least five years.
PJM's backstop procurement was designed to close a capacity shortfall driven largely by data center demand forecasts. The grid operator failed to secure enough capacity in its last two base auctions and plans to buy 6.8 GW for the 2028/29 delivery year, though it may lower that target as new supply comes online. FERC blocked the original Sept. 30 start date, saying parts of PJM's cost-allocation framework, along with rules on transmission owner exits and collateral requirements, could be unjust and unreasonable.
DOE sided with FERC's concerns, saying PJM's proposed cost allocation model may not assign costs to the consumers who caused them. The department argued that PJM should base allocations on updated load forecasts and track individual large-load projects through construction to avoid double counting or paying for capacity that never materializes. It also pointed to the Ratepayer Protection Pledge, a voluntary commitment by utilities including AEP, Dominion Energy and Exelon, under which new large loads should fund the generation and infrastructure they require.
PJM has until Oct. 29 to propose its own fixes, with a FERC hearing process running through February. The grid operator did not immediately respond to a request for comment.