DOE Tells PJM to Fix Data Centre Cost Allocation by 29 October

The US Department of Energy filed a statement of position at the Federal Energy Regulatory Commission on Wednesday 7 October 2026, asking PJM Interconnection to rewrite the part of its capacity procurement plan that decides who pays for power built to serve data centres. The filing lands in docket ER26-3380 and supports the regulator's own conclusions against the grid operator that submitted the plan.

What FERC stopped on 29 September

PJM proposed the Reliability Backstop Procurement in a tariff filing on 31 July 2026, a one-time purchase of new capacity meant to close a shortfall largely driven by data centre demand forecasts. FERC accepted the framework on 29 September but suspended it for five months, to an effective date of 28 February 2027 and subject to refund, and opened a hearing. The commission preliminarily found three elements may be unjust and unreasonable: the cost allocation method, the rules letting transmission owners exit, and the collateral load-serving entities must post.

The effect was immediate: PJM had planned to open the procurement on 30 September and did not. It is seeking about 6.8 GW of new capacity to cover the shortfall from the 2028/29 delivery year auction, according to its own fact sheet, with all new resources to reach commercial operation by 1 June 2032. PJM missed its reserve margin target in each of its last two base capacity auctions. Its footprint covers 13 Mid-Atlantic and Midwest states and the District of Columbia.

The same question is open in neighbouring markets and in Congress. MISO has asked FERC to fast-track studies for loads above 200 MW that bring their own generation, as Parallax Nexus reported on 5 October, and a Senate permitting package introduced on 30 September would bar utilities from charging other customers for a data centre load above 20 MW. DOE's filing pushes the principle through an existing docket rather than new law.

The pledge doing the argument's work

DOE anchored its reasoning in the White House Ratepayer Protection Pledge, under which large electric loads rather than households or other business customers fund the generation and related infrastructure their projects require. Utilities operating in PJM's territory that have signed the voluntary pledge include American Electric Power, AES, CenterPoint Energy, Dominion Energy, Exelon, FirstEnergy and PPL. Utility Dive, which reported the filing on 7 October, said it appears to be the first statement of position DOE has filed at FERC in at least five years.

On the substance, the department echoed the regulator.

Its fix is administrative: allocate costs using updated load forecasts, and track each large load project well enough to know whether it entered service, slipped, shrank or was cancelled. Without that data, DOE argued, PJM cannot avoid double counting, lower the procurement target when forecast load fails to appear, or assign demand growth to the right zone and load-serving entity. The department also said PJM's tariff may omit large loads already sitting in the baseline forecast.

PJM is not waiting for February

Jeffrey Shields, a spokesman for PJM, told Utility Dive on 8 October that the grid operator intends to file a revised proposal by 29 October rather than sit through the hearing, and will hold a special Members Committee meeting on 22 October to consult members on its contents. FERC's order left that door open, telling PJM it could propose its own fixes using the guidance in the order.

A statement of position carries no binding force. FERC decides, and the department is one voice in a contested docket. What makes this one worth logging is the alignment: the federal energy department, the federal energy regulator and a bipartisan group of senators have landed on the same test, whether the customer causing new generation to be built is the customer billed for it. Whether PJM's 29 October filing adopts FERC's guidance in full is not known.