PJM Files Amended Backstop Proposal: What Changed and What Happens Next

Tony Zelinski

39 minutes ago

2 min read

PJM Files Amended Backstop Proposal: What Changed and What Happens Next

On Thursday, October 29, 2026, PJM filed its amended Section 205

Reliability Backstop Procurement proposal with FERC — the refile PJM had targeted since its September 29 order suspended the original procurement for five months.

What the amended filing does

The filing addresses the three issues FERC flagged in its September 29 order:

Cost allocation: Backstop costs will now be allocated based on Large Load growth — measured from actual summer peak load in 2026 to the forecast for the 2028/2029 delivery year. Electric distribution companies will provide firm Large Load growth figures, assigned by each zone's contribution. This is the cost-causation fix FERC and the Department of Energy both pressed for: costs follow the load growth driving the need, rather than spreading to existing ratepayers.
LSE credit requirements: Revised to a lower uniform credit rate with revised payment terms.
LSE exit responsibility: An exiting load-serving entity remains responsible for backstop charges for the remainder of the commitment term.
Municipal/cooperative opt-out removed: The prior provision allowing municipal and cooperative utilities to opt out is gone.

The filed timeline

Bid window: March 1–28, 2027
Final target/supply determined: April 28, 2027
Results posted: May 10, 2027

These dates supersede the draft timeline circulated in PJM's October 22 stakeholder materials.

The procurement itself

The roughly 6,800 MW shortfall for the 2028/29 delivery year will be recalculated with updated information, and the target will be reduced by any megawatts procured through executed bilateral contracts. Resources can still secure terms of up to 15 years, with a maximum willingness to pay of a MW-weighted average of $555/MW-day.

What is still open

FERC has not yet acted on the amended filing. Two questions remain unresolved: whether FERC will hold its paper hearing in abeyance while it considers the new proposal, and the February 28, 2027 suspended effective date from the original order. The auction remains suspended until FERC acts — this filing is a proposal, not an approval.

What this means for buyers

For commercial and industrial customers in PJM, the picture is now clearer but not yet final. The timeline is concrete for the first time since September, and the cost-allocation fix means large-load growth — principally data centers — bears the cost it drives, rather than existing load. Until FERC rules, however, 2028/29 capacity costs still carry an open backstop component. No procurement action is required today, but any 2028/29 contracting should account for the possibility of backstop-related costs landing in that delivery year. We will update this note when FERC responds.