FERC chair slams PJM ‘mess’ as country’s largest grid operator delays power auction
The Federal Energy Regulatory Commission has conditionally approved a reliability backstop plan from PJM Interconnection while delaying its implementation and criticizing the grid operator's handling of capacity rules. PJM had scheduled an auction to accept offers for backstop power supplies after failing to meet its reserve margin targets. However, federal regulators intervened due to serious concerns over how data center costs would be allocated. The delay creates acute market uncertainty for power stocks as the region struggles to manage surging electricity demand from artificial intelligence.
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- ✓ PJM Interconnection planned to accept offers for backstop power supplies from Sept. 30 through Oct. 21.
- ✓ The Federal Energy Regulatory Commission partially approved the grid operator's plan with a focus on cost allocation concerns.
What changed
The Federal Energy Regulatory Commission conditionally approved PJM's backstop procurement plan while halting the scheduled auction implementation to address cost allocation safeguards.
Live updates
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FERC Delays PJM Power Auction Amid Cost Concerns
The Federal Energy Regulatory Commission has conditionally approved a reliability backstop plan from PJM Interconnection while delaying its implementation and criticizing the grid operator's handling of capacity rules. PJM had scheduled an auction to accept offers for backstop power supplies after failing to meet its reserve margin targets. However, federal regulators intervened due to serious concerns over how data center costs would be allocated. The delay creates acute market uncertainty for power stocks as the region struggles to manage surging electricity demand from artificial intelligence.
Why it matters
PJM serves as the country's largest grid operator, managing power supplies across multiple states. The operator faced a significant capacity shortfall, creating a gap that required urgent backstop procurement. At the same time, the rapid proliferation of energy-intensive data centers has strained regional capacity and raised alarms about consumer protection.
What is confirmed
- PJM Interconnection planned to accept offers for backstop power supplies from Sept. 30 through Oct. 21.
- The Federal Energy Regulatory Commission partially approved the grid operator's plan with a focus on cost allocation concerns.
Still unconfirmed
- TD Cowen warned of acute market uncertainty for utility stocks including CEG, NRG, and TLN following the regulatory delay.
What to watch next
- Revised cost allocation proposals submitted by PJM to the Federal Energy Regulatory Commission.
- New dates announced for the delayed backstop power auction.
confidence 100%Sources used for this update (10)
- utilitydive.com — FERC chair slams PJM ‘mess’ as country’s largest grid operator delays power auction
- Bloomberg.com — Biggest US Grid Suspends Plan for Data Center Power Auction
- Yahoo Finance — CEG, NRG, TLN Stocks In Spotlight: TD Cowen Warns Of ‘Acute’ Uncertainty After FERC Delays PJM’s Plan To Meet AI Demand
- Energy-Storage.News — PJM capacity reforms require urgent state action to protect ratepayers, says NRDC
- TradingView — FERC asks grid operator PJM to revise plan to shield homes from data center costs
- RTO Insider — FERC Conditionally Approves PJM Backstop Procurement, Delays Implementation
- Daily Energy Insider — Rep. Pallone makes recommendations to FERC to improve PJM’s data center proposals
- energynews.pro — FERC Approves PJM's Reliability Backstop Plan for 6,831 MW Gap
- www.utilitydive.com — FERC chair slams PJM ‘mess’ as country’s largest grid operator delays power auction | Utility Dive
- www.utilitydive.com — Data center backup power contributes to health risks: report | Utility Dive
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