FERC Rejects the Core of PJM's Data Centre Connection Plan

The Federal Energy Regulatory Commission on Friday 9 October 2026 rejected most of PJM Interconnection's plan for bringing data centres and other large electricity users onto the largest US grid. The order, filed in docket ER26-3515 under eLibrary accession 20261009-3055, throws out the Interim Resource Adequacy Service that formed the core of the package, along with PJM's rules for loads that bring their own new capacity.

The rejected service, known as IRAS, would have let a new large load connect before matching new generation existed, in exchange for agreeing to be curtailed ahead of other demand response in the run-up to a grid emergency. FERC accepted two pieces of the filing: PJM's definition of a large load, which keeps a 50 MW threshold, and a large load registry recording a facility's location, ramp schedule and capacity supply.

A jurisdictional problem, not an engineering one

FERC did not reject IRAS on reliability grounds. It found that the proposed tariff reached into territory the states control, because the large loads in question are overwhelmingly retail customers.

The commission described large-load rules as shared work with the states, said states have a central part to play in designating which retail customers must be curtailed when the system is stressed, and encouraged them to continue that work. Commissioner David Rosner, concurring, went further and flagged what PJM's proposal would have done to the capacity market, because IRAS loads would have sat outside the auction demand curve.

Rosner added that in a grid emergency non-critical data centres should be switched off before homes, hospitals and schools, but that states, not the grid operator, should set those priorities, and only after voluntary demand response has been exhausted.

The second PJM rejection in six weeks

This is the second PJM data centre proposal FERC has sent back since late September. On 29 September the commission accepted but suspended PJM's reliability backstop procurement in docket ER26-3380, setting cost allocation, transmission owner exit rules and load-serving entity collateral for a paper hearing, and PJM put the 6.8 GW procurement on hold. The US Department of Energy intervened in that docket on 7 October to argue that large loads rather than households must fund the generation they require, as Parallax Nexus reported on 9 October. PJM plans to refile by 29 October and holds a special Members Committee meeting on 22 October.

Jeffrey Shields, a PJM spokesman, told Utility Dive by email on Monday 12 October that the grid operator is reviewing the order with an eye to meeting FERC's requirements while recognising the responsibilities the commission assigned to the states. Equity analysts at Jefferies told clients the same day that the ruling points to higher capacity prices for longer in PJM, which favours independent power producers including Constellation Energy, NRG Energy, Talen Energy and Vistra.

The judgment worth owning here is that FERC has now twice told PJM the same thing in different words: deciding who gets switched off, and who pays for the power, is not the grid operator's call to make alone. That moves the next step to utility commissions across a footprint PJM runs from Illinois to Washington, DC, each on its own timetable, and whether any of them will act fast enough to matter is not known. PJM filed the package on 13 August and asked for it to take effect on 12 October, according to MGRID's review of the docket, with IRAS applying to large loads entering service after 1 June 2027.