FERC Delayed PJM Grid Capacity Auction
The grid operator must revise cost allocation plans after regulators rejected portions of its reliability proposal.
Updated on Sept. 30, 2026 in Data Centers
Live Poll
Do you trust grid operators to balance power supply needs with fair costs for consumers?
The Federal Energy Regulatory Commission has blocked PJM Interconnection from launching a procurement auction designed to acquire 6.8 GW of new capacity. The order forces PJM to revise its proposal before it can address projected shortfalls for the 2028/29 delivery year.
Why it matters
PJM faces mounting capacity pressure from rising data center demand forecasts across its service region. Regulators halted the process because they deemed specific cost allocation plans unjust and unreasonable.
PJM proposed an offer cap of $555/MW-day for its reliability backstop, with the Northern Virginia Electric Cooperative estimating it would need to post $2 billion in collateral to participate.
The players
PJM Interconnection
A regional transmission organization that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia.
Federal Energy Regulatory Commission
The independent U.S. agency that regulates the interstate transmission of electricity, natural gas, and oil.
Northern Virginia Electric Cooperative
A consumer-owned electric utility that serves residents in the Northern Virginia area and estimated a $2 billion collateral requirement for the auction.
The details
PJM manages the electric grid across the Mid-Atlantic, Midwest, and the District of Columbia, using auctions to ensure sufficient supply. The commission rejected the operator's plan to allow certain cooperatives and municipal utilities to opt out of the procurement. PJM must now update its proposal to align with federal mandates regarding how costs for new capacity are distributed among grid participants.
Timeline
September 30, 2026: Original start date for the procurement auction.
October 21, 2026: Original deadline for accepting offers.
December 2, 2026: Original completion date for the selection process.
December 2026: Scheduled standard capacity auction for the 2029/30 delivery year.
2028/29: The delivery year targeted for the capacity shortfall.
The Tech Race
This delay impacts the broader effort to integrate surging electricity demand from data center clusters into regional grid planning. PJM must now align its capacity expansion strategy with federal mandates to avoid further regulatory intervention.
While the auction delay for the 2028/29 delivery year creates uncertainty for energy providers, it does not immediately affect retail electricity rates. The long-term stability of the regional power supply remains contingent on PJM revising its procurement framework to satisfy regulatory requirements.
The takeaway
Regulators are increasingly scrutinizing the costs associated with rapid grid expansion driven by high-density compute loads. Stakeholders should track PJM's forthcoming revised proposal to see how the commission's concerns over collateral and cost allocation are addressed.
What happens next
PJM will conduct a standard capacity auction for the 2029/30 delivery year in early December 2026.
Further reading
Explore how power grid demands are shaping infrastructure in the Data Centers section.
Source note: This article includes information reported by Utility Dive.
Live Poll
Do you trust grid operators to balance power supply needs with fair costs for consumers?
