FERC Suspends PJM’s Emergency Reliability Backstop Auction and Directs Comprehensive Queue Cluster Overhaul
The Federal Energy Regulatory Commission (FERC) has suspended PJM Interconnection’s proposed emergency reliability backstop procurement mechanism until early...
FERC Suspends PJM’s Emergency Reliability Backstop Auction and Directs Comprehensive Queue Cluster Overhaul
The Federal Energy Regulatory Commission (FERC) has suspended PJM Interconnection’s proposed emergency reliability backstop procurement mechanism until early 2027, ordering a detailed evidentiary paper hearing while directing PJM to fast-track its first-ready, first-served interconnection cluster comprising 617 projects and 169 GW.
- Publish date: 2026-09-29
- Category: Standards & Policy
- Original source: Federal Energy Regulatory Commission (FERC) & PJM Interconnection
- Reading time: 5 min
Regulatory Scrutiny on 11th-Hour Out-of-Market Procurement
Facing projected reserve margin shortfalls driven by thermal plant retirements and surging data center demands in the mid-Atlantic, PJM had proposed an emergency bilateral auction to secure generation resources outside its traditional Base Residual Auction (BRA).
In its September 29 ruling, FERC suspended the mechanism for five months, expressing deep concerns regarding potential unjust cost shifts onto regional ratepayers, ambiguous exit terms, and inadequate competition guidelines. FERC emphasized that fundamental grid reliability challenges must be solved through transparent tariff reforms rather than hastily structured backstop procedures.
Transition to the 169 GW First-Ready Interconnection Queue Cluster
Simultaneously, FERC reaffirmed PJM’s aggressive implementation of Order 2023 interconnection reforms. On September 28, PJM formally opened processing for its first unified cluster cycle, bringing 617 clean generation and storage projects (totaling 169 GW) under strict site control and milestone deposit obligations.
Developers must demonstrate definitive substation bay reservation agreements and complete initial engineering reviews for step-up transformers, effectively eliminating speculative queue clogging that had previously stalled viable generation assets for over three years.
Implications for Transmission Owners and Substation Procurement
FERC noted that by filtering speculative projects, transmission owners—including Dominion Energy, Exelon, and AEP—can accurately size substation expansions, order long-lead 765/500 kV autotransformers, and coordinate regional line rebuilds with predictable financing.
The paper hearing will determine permanent tariff modifications by February 2027, balancing developer certainty with consumer cost protections.
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