PJM Proposes Backstop Procurement for 6,831-MW Capacity Gap

PJM Interconnection filed a revised Reliability Backstop Procurement proposal with the Federal Energy Regulatory Commission (FERC) on October 29, 2026. The filing responds to a projected 6,831-MW capacity shortfall for the 2028/2029 delivery year and would establish a backstop mechanism to procure resources if approved. The proposal is not a finalized procurement: it remains before FERC, and the agency’s action could affect whether the mechanism proceeds, its terms, and the proposed schedule.

The proposed procurement could include capacity from generation providers, demand-response operators, and distributed energy resource (DER) developers. PJM’s proposed maximum willingness to pay is $555 per MW-day, and capacity commitments could extend for as long as 15 years. Those parameters make the filing relevant not only to prospective suppliers, but also to load-serving entities and large-load customers that may face cost-allocation or participation implications. Resource owners and buyers should treat the terms as proposed rather than settled, and assess how eligibility, credit, and bilateral-contract provisions may apply to their positions.

PJM’s proposed timeline targets a launch on March 1, 2027, with bidding closing on March 28, target finalization on April 28, and results published on May 10. These dates create a compressed planning window for potential participants to identify qualifying resources, evaluate availability, and prepare preliminary bid strategies. They are contingent on FERC action, so companies should avoid treating them as fixed procurement deadlines until the proposal receives regulatory consideration and PJM confirms implementation details.

For contractors and energy-sector suppliers, the filing is an early market signal rather than an immediate solicitation. Generation companies, aggregators, demand-response providers, and DER developers can use the proposal to screen available capacity and review whether existing bilateral contracts could qualify or reduce the procurement target. On the buyer side, large-load customers and load-serving entities should examine proposed cost allocation, credit requirements, eligibility criteria, and contract treatment. The key commercial questions are whether a resource can participate, how its capacity would be counted, and how any resulting procurement costs would be assigned.

• PJM Interconnection filed the revised proposal with FERC on October 29, 2026; approval and final terms remain pending.
• The procurement is intended to address a projected 6,831-MW shortfall for the 2028/2029 delivery year.
• Potential resource categories include generation, demand response, and distributed energy resources.
• PJM proposes a maximum willingness to pay of $555 per MW-day and commitments of up to 15 years.
• The proposed launch date is March 1, 2027; the schedule remains subject to FERC action.
• Proposed milestones are bidding close on March 28, 2027, target finalization on April 28, and results publication on May 10.
• Resource providers should assess resource eligibility, availability, bid readiness, and how bilateral contracts could qualify or reduce the procurement target.
• Large-load customers and load-serving entities should review proposed cost allocation, credit, eligibility, and bilateral-contract provisions for potential cost and participation effects.