Topics in the text: Credit and exit · Cost allocation · Connecting load and generation
What the document says
Cost allocation · PDF pp. 1–32
Definitions: charges, collateral and obligations
The clean definitions distinguish daily RBP Charges from RBP Obligation, the retail regulator's allocation of unforced capacity MW among suppliers. Both settlement credits and charges may change sign.
the $/day value of the total RBP Settlement Credits, positive or negative PDF p. 17
A promise to pay is only as good as its security
Commissioner Judy Chang · Related public statement
In the separate Duke case, Chang dissented because Duke had not shown that its security requirements backed the full 15-year payment promise. The comparison bears on PJM’s proposed collateral; Chang was not evaluating PJM’s dollar amount.
The auction provisions place committed backstop capacity into PJM's existing auction system. The offer obligation runs through the term of the commitment and is subject to the stated exceptions.
all of the RBP UCAP MW that is committed in the Reliability Backstop Procurement through the term of the commitment PDF p. 34
Procurement target · PDF pp. 44–45
§18, §18.1: procurement size
The proposed one-time procurement begins in 2027. Its initial target cannot exceed either the updated 2028/29 auction shortfall or the reported large-load quantity expressed in unforced capacity.
the UCAP equivalent of the aggregate region-wide Large Load MW quantity reported by the Electric Distributor PDF p. 45
Demand flexibility · PDF pp. 46–47
§18.2: qualifying bilateral offsets
A qualifying new capacity resource must meet the tariff's eligibility requirements. The tariff allows several kinds of supporting evidence: a bilateral contract for at least five delivery years, qualifying self-supply, or a signed commitment for demand response or distributed generation.
signed bilateral contracts for Qualifying RBP Offset UCAP MW PDF p. 47
Retail jurisdiction · PDF pp. 48–49
§18.3: cost allocation and credits
Zonal shares reflect load growth and eligible offsets. If a distributor reports an allocation from its retail regulator, PJM uses those MW to bill suppliers. If it does not, capacity obligations supply the default shares.
Electric Distributors may report updated RBO MW to the Office of the Interconnection after the initial allocation is reported PDF p. 49
Registry reporting · PDF p. 50
§18.3A: the distributor's report
At least seven days before the procurement, each distributor outside a Fixed Resource Requirement service area must report the identity and quantity of incremental large load supported by an agreement. This report establishes backstop exposure, not registry membership.
the quantity and identity of incremental Large Load that is supported by an electric service obligation, construction commitment, or similar agreement PDF p. 50
Reliability and timing · PDF p. 51
§18.4: offer and selection windows
The proposed tariff gives sellers four weeks to submit offers and allows six weeks after that for clearing and selection. These intervals run from the actual procurement, not the filing date.
The Reliability Backstop Procurement offer submission window for RBP Sell Offers shall open for four weeks PDF p. 51
Seller eligibility · PDF pp. 52–58
§18.5: eligibility, selection and settlement
PJM sets eligibility and evidence requirements by resource type, then ranks offers by levelized cost. The $555/MW-day ceiling applies to the MW-weighted average levelized cost of the selected offers, not a guaranteed price for each resource.
The MW-weighted average of the levelized procurement cost of all selected RBP Sell Offers shall not exceed $555/MW-day UCAP PDF p. 57
Seller obligations · PDF pp. 59–60
§18.6: delivery and shortfall charges
Committed capacity has an auction offer obligation. Undelivered MW lose daily backstop settlement credits and can incur shortfall charges during the fixed 15-year period.
will not be compensated for the undelivered megawatts via RBP Settlement Credits PDF p. 60
Who pays after a generator starts operating?
FirstEnergy Service Company · Related public statement
FirstEnergy said the original shortfall charge stopped once a generator reached commercial operation. It questioned whether a seller then had sufficient incentive to perform throughout its 15-year term.
A supplier leaving PJM would still owe its allocated charges, even if another entity's departure caused the exit. A FERC rate filing must specify the terms and the amount.
subject to a rate filing with the Federal Energy Regulatory Commission that details the specific terms and amounts owed PDF p. 61
Constellation asks who benefits when an owner leaves
Constellation Energy Generation · Related public statement
Constellation asked FERC to clarify that it had not assigned the departing owner’s share to suppliers by default. In its view an exiting owner, rather than captive customers, should bear exit costs it causes.
Sellers post security before offering; losing sellers get it back within five business days after clearing. Suppliers assigned charges secure their share under a separate formula. A transfer does not release the original supplier's collateral until the successor posts and unpaid invoices are settled.
Any RBP Collateral posted by transferor shall be returned once Transferee has posted the RBP Collateral PDF p. 66
A promise to pay is only as good as its security
Commissioner Judy Chang · Related public statement
In the separate Duke case, Chang dissented because Duke had not shown that its security requirements backed the full 15-year payment promise. The comparison bears on PJM’s proposed collateral; Chang was not evaluating PJM’s dollar amount.