PJM moves backstop auction to September amid data center cost fight
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- PJM Interconnection is moving its planned backstop reliability auction from March to September to address rising data center demand, the grid operator announced Tuesday.
- PJM's board urged member states to "immediately" establish frameworks to shield residential and existing customers from auction costs, warning that costs could default to those customers if allocation rules aren't created.
- The revised auction will backfill shortfalls from PJM's next base capacity auction, which begins June 30 for the 2028/29 delivery year — likely lowering the procurement target from roughly 14.9 GW to about 9 GW, per Jefferies equity analysts.
- FERC Chair Laura Swett criticized PJM in April for originally scheduling the auction in March when the Trump administration and PJM-state governors had pushed for September, and suggested the grid operator may be "too big to function."
- PJM is merging its stakeholder processes for connect-and-manage rules and the backstop procurement, with final certainty on C&M rules potentially not arriving until "sometime" in 2027 due to possible FERC rehearings and legal challenges.
- The backstop auction is part of a two-part procurement PJM proposed in April, paired with a bilateral contracting window from September to March between large loads and suppliers; PJM spans 13 Mid-Atlantic and Midwest states plus D.C.
Why it matters: The board's letter is a shot across the bow at state regulators: if PJM-state lawmakers don't move quickly on hyperscaler cost allocation, roughly 9 GW of new capacity costs could land on residential and commercial ratepayers across 13 Mid-Atlantic and Midwest states and D.C.
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