FERC Approves PJM Reliability Procurement, Delays Implementation to 2027

The Federal Energy Regulatory Commission on Sept. 29 approved PJM Interconnection’s proposed Reliability Backstop Procurement to secure additional electricity supply amid near-term reliability concerns, but suspended the measure for five months, delaying its effective date to Feb. 28, 2027. The action gives the regulator additional time to consider the procurement framework while placing the proposal under refund and further review provisions.

The one-time procurement was initially planned for Sept. 30. PJM will  now reassess the schedule and provide updated milestones to stakeholders. The grid operator also plans to provide an administrative update at its Market Implementation Committee meeting on Oct. 7.

The proposed procurement is intended as a temporary measure to address resource adequacy while the regional grid operator reviews broader changes to its electricity market, including investment incentives and the ability of new generation resources to meet rising demand. The process is also designed to support PJM’s Interim Resource Adequacy Service, which provides a transitional framework for securing additional capacity.

PJM developed the procurement alongside a separate bilateral contracting process that connects new electricity supply resources with new large electricity customers. Both mechanisms are intended to encourage additional generation and other eligible resources as electricity demand grows, particularly from large new loads. Only new supply resources can participate in the procurement and bilateral contracting processes, with participating resources required to begin commercial operations by June 1, 2032.

The procurement framework also includes provisions intended to prevent the same capacity from being secured through multiple mechanisms. Confirmed bilateral contracts involving new supply resources can therefore be used to reduce the amount of capacity subject to the initial procurement target.

The development comes as the grid operator begins processing a large pipeline of proposed generation under its new interconnection process. The first phase began Sept. 28 with 617 projects representing nearly 169 gigawatts of potential capacity. The new process is intended to reduce speculative projects and accelerate grid connections, although the full pipeline will not necessarily translate into operating generation. PJM currently has 49 gigawatts of generation with signed interconnection agreements, with some projects delayed by permitting and supply-chain challenges.