The Independent Market Monitor has filed a complaint asking FERC to determine that PJM has the authority to hold off on large load interconnections if they would jeopardize transmission security or resource adequacy (EL26-30).
“The question is clear. If PJM has an obligation to provide reliable service to all PJM loads, is it just and reasonable for PJM to add new loads that it cannot serve reliably? The answer to that question is no,” the Monitor wrote in the Nov. 25 complaint.
It argues the proposals PJM and stakeholders made in the recent Critical Issue Fast Path (CIFP) process rest on the faulty assumption that the RTO does not have the ability to turn away large loads even when there is not sufficient capacity to serve them.
The Monitor’s proposal, which received the second-greatest amount of support out of a dozen, would establish a queue for large loads, preventing them from coming online until they could be served reliably. The queue could be bypassed by loads bringing their own generation, with an expedited study process for those resources. (See PJM Stakeholders Reject All CIFP Proposals on Large Loads.)
“The solutions offered by PJM and most stakeholders simply assume that PJM must agree to add large loads to the system when the loads cannot be served reliably because PJM does not have the required capacity resources. From another perspective, the position of PJM and market participants assumes that PJM does not have the authority to require that large new data center loads can be served reliably before those loads are added to the system,” the Monitor wrote.
The Monitor wrote that data center load is the primary driver of a reliability gap that is expected to grow over the coming years. It states that the 2026/27 Base Residual Auction (BRA) was short of the reliability requirement by 200 MW; those tight conditions also caused a $7.3 billion, or 82.1%, increase in auction revenues which would not have occurred without that load growth. (See PJM Capacity Prices Hit $329/MW-day Price Cap.)
PJM spokesperson Jeff Shields said the RTO is reviewing the complaint and does not have any comments before it submits a formal response.
“We have said that higher pricing is being driven by a supply and demand crunch, with the dominant driver on the demand end being data center electricity needs,” Shields added.
Monitor Joe Bowring told RTO Insider the complaint would clarify PJM’s authority to its Board of Managers before it decides on how to proceed with filing governing document changes in the wake of the CIFP.
The complaint makes the case that Order 2000 requires RTOs to maintain a reliable transmission network, which PJM has accomplished through its capacity market and Regional Transmission Expansion Plan (RTEP). If a large load cannot be served while maintaining the reserve margin, PJM should be able to deny interconnection until that can be accomplished.
“Interconnecting large new data center loads when adequate capacity is not available is not providing reliable service. The obligation to provide service is the obligation to provide reliable service. The obligation to provide service is not met if customers are simply interconnected without adequate resources to meet their demand,” the Monitor wrote.
The Monitor made similar comments on a transmission security agreement between Amazon and PECO, arguing that utilities should be required to demonstrate there is sufficient capacity and transmission capability before bringing large loads online. The commission’s Nov. 21 order determined such a demonstration is not needed for agreements between customers and utilities (ER25-3492). (See FERC Approves PECO-Amazon Transmission Agreement for Pa. Data Center.)
