{"document":{"slug":"filing-20260717-5246","title":"The Pennsylvania Office of Consumer Advocate submits Request for Clarification or, in the alternative, Rehearing of the 06/18/2026 Order","issued":"2026-07-17","accession":"20260717-5246","docket":"EL26-67-001","group":"PJM filings","filer":"Pennsylvania Office of Consumer Advocate","kind":"request","file":"sources/originals/20260717-5246_01.pdf","url":"https://elibrary.ferc.gov/eLibrary/filelist?accession_Number=20260717-5246","sha256":"7f9b820dfcbe88d14667ea108f52c7934bcd8e45f661fc3d66ef933aa08b85e9","pages":28,"tokens":8843,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":238,"text":"1 \nUNITED STATES OF AMERICA \nBEFORE THE \nFEDERAL ENERGY REGULATORY COMMISSION \n \n \n) \nPJM Interconnection, L.L.C.  \n) \n \n) \nAEP Appalachian Transmission Company, Inc. \n) \n \nDocket No. EL26-67 \net al.  \n) \n \n) \n \n \n \nRequest for Clarification \nOr—in the Alternative—Rehearing \nof the \nPennsylvania Office of Consumer Advocate \n \nBefore the Federal Energy Regulatory Commission (Commission or FERC), the \nPennsylvania Office of Consumer Advocate (PA OCA)1 respectfully requests clarification—or, in \nthe alternative, rehearing—of the Commission’s June 18 Order Instituting Proceeding (Order) \nunder Section 206 of the Federal Power Act (FPA) in Docket No. EL26-67.2 \nI. \nSummary of Request for Clarification or Rehearing \nClarification: \n1. \nThe Order proposes pro forma transmission cost recovery agreements. These \nagreements will help solve some—but not all—of the FERC-recognized unjust and \nunreasonable transmission cost shifting caused by large loads. FERC should clarify \nthat wholesale cost shifting will occur in a manner that FERC’s proposed cost \nrecovery agreements do not fully address because FERC’s proposed agreements \nwill simply guarantee collection of revenue contributions under existing cost \n \n1 The PA OCA is an independent state office within the Pennsylvania Office of Attorney General. Pennsylvania statute \nempowers the PA OCA to represent the interest of utility consumers before the Pennsylvania Public Utility Commission, \nFERC, and state and federal courts. 71 P.S. § 309-1 et seq. \n2 16 U.S.C. § 825l(b) (providing for FPA rehearing requests); 18 C.F.R. § 385.713 (providing FERC rules for \nrehearing requests)."},{"page":2,"startToken":238,"endToken":477,"text":"2 \nallocation methods. However, the unjust and unreasonable cost shifting also results \nfrom costs being allocated under existing regional cost allocation methods to \ntransmission customers not serving large loads. Agreements guaranteeing the \ncollection of a revenue contribution from Eligible Customers for Network \nUpgrades needed to serve large loads is untethered from review or consideration of \nthe actual cost of providing transmission service induced by individual large loads. \nFERC should clarify that existing regional cost allocation methods result in unjust \nand unreasonable rates when they produce rates where transmission customers not \nserving large loads are paying for Network Upgrades that they do not cause or \ncommensurately benefit from.  \n2. \nTo address the entire wholesale cost-shifting problem, FERC should clarify that \nparties in EL26-67 may develop an actionable record on regional wholesale cost \nallocation methods for Network Upgrades caused by large loads. That record should \nnot be limited to the cost recovery agreements proposed in the Order but instead \nshould encompass all aspects of wholesale transmission cost shifting caused by \nlarge loads in PJM, including but not limited to the use of expansion rates \n(described further below) and crediting mechanisms. \nIn the Alternative, Rehearing: \n3. \nTo the extent that FERC denies clarification, the PA OCA respectfully requests \nrehearing because the Order violates the Federal Power Act and Administrative \nProcedure Act. It does so because the Commission—without reasoned \nexplanation—fails to remedy a significant part of the unjust and unreasonable cost-"},{"page":3,"startToken":477,"endToken":861,"text":"3 \nshifting that FERC expressly identified in the Order, by refusing to address regional \ncost allocation. \n4. \nTo the extent that FERC denies clarification, or interprets the Order to preclude \nparties from developing an actionable record on regional wholesale cost allocation \nmethods for Network Upgrades caused by large loads, the PA OCA requests \nrehearing because the Order violates the Federal Power Act and Administrative \nProcedure Act because the Commission, without reasoned explanation, fails to \npermit record development to remedy a significant part of the unjust and \nunreasonable cost-shifting that FERC expressly identified in the Order. \nTo effectuate the Order’s express purpose to protect consumers from unjust and \nunreasonable cost shifts,3 FERC should examine regional wholesale cost allocation methods for \nNetwork Upgrades.4 And to examine regional wholesale cost allocation properly, FERC needs to \ndevelop a record on that subject.5 By doing so, FERC would further the consumer protection \n \n3 Order, PP 66, 77, 107 (preliminarily finding PJM’s Tariff unjust and unreasonable based on transmission cost shifts \ncaused by large loads). \n4 Id. (Chang, Comm’r, concurring at PP 6, 8) (identifying that FERC should examine unjustified cost shifts at the \nwholesale level that result from large loads); Advance Notice of Proposed Rulemaking at P 25, Interconnection of \nLarge Loads to the Interstate Transmission System, Docket No. RM26-4 (Oct. 27, 2025) (proposing that load and \nhybrid facilities should be responsible for 100 percent of the network upgrades assigned to them through \ninterconnection studies); Proclamation No. 11014, 91 Fed. Reg. 11439 (Mar. 4, 2026); Ratepayer Protection Pledge, \nTHE WHITE HOUSE (Mar. 4, 2026), https://www.whitehouse.gov/releases/2026/03/ratepayer-protection-pledge/ \n(“Companies will pay for all new power delivery infrastructure upgrades required to service their data centers, \nincluding adequate network upgrade costs to ensure that these expenses are not passed on to the ordinary \nhousehold.”); Mun. Light Bds. Of Reading and Wakefield v. FPC, 450 F.2d 1341, 1348 (D.C. Cir. 1971) (stating that \nthe FPA’s “primary aim is the protection of consumers from excessive rates and charges”). \n5 Order (Chang, Comm’r, concurring at P 8) (“[T]he Commission needs a robust record in each docket and each region \nto ensure we establish the right cost shift protections for wholesale customers, including but not limited to the \ncommitments outlined in the Ratepayer Protection Pledge”)."},{"page":4,"startToken":861,"endToken":1213,"text":"4 \npurposes expressed in the Order,6 the ANOPR,7 the FPA,8 and the White House’s Ratepayer \nProtection Pledge.9  \nII. \nStatement of Issues \nRequests for Clarification: \n1. \nThe PA OCA requests FERC’s clarification that the Order’s pro forma cost recovery \nagreements are partial and nonexclusive solutions to the wholesale transmission \ncost allocation problem. The agreements will help solve some—but not all—of the \nOrder’s stated transmission cost shifting problem caused by large loads. This \nclarification should specify the other aspects of wholesale transmission cost shifting \nthat are—or may be—caused by Eligible Customers serving large loads. FERC’s \nclarification should specify an additional preliminary conclusion that existing \nregional cost allocation methods may result in unjust and unreasonable wholesale \ntransmission cost shifting between Eligible Customers serving large loads and other \ntransmission customers because under existing methods other transmission \ncustomers pay for Network Upgrade costs that they do not cause or \ncommensurately benefit from. FERC made a preliminary finding “that PJM’s Tariff \nappears to be unjust and unreasonable because it lacks adequate mechanisms to \nmitigate the risk of cost shifting among transmission customers, which may result \n \n6 Order, PP 66, 77, 107 (preliminarily finding PJM’s Tariff unjust and unreasonable based on transmission cost shifting \nconcerns). \n7 Advance Notice of Proposed Rulemaking at P 25, Interconnection of Large Loads to the Interstate Transmission \nSystem, Docket No. RM26-4 (Oct. 27, 2025) (proposing that load and hybrid facilities should be responsible for 100 \npercent of the network upgrades assigned to them through interconnection studies). \n8 See, e.g., Mun. Light Bds. Of Reading and Wakefield v. FPC, 450 F.2d 1341, 1348 (D.C. Cir. 1971) (stating that the \nFPA’s “primary aim is the protection of consumers from excessive rates and charges”). \n9 Proclamation No. 11014, 91 Fed. Reg. 11439 (Mar. 4, 2026); Ratepayer Protection Pledge, THE WHITE HOUSE (Mar. \n4, 2026), https://www.whitehouse.gov/releases/2026/03/ratepayer-protection-pledge/ (“Companies will pay for all \nnew power delivery infrastructure upgrades required to service their data centers, including adequate network upgrade \ncosts to ensure that these expenses are not passed on to the ordinary household.”)."},{"page":5,"startToken":1213,"endToken":1476,"text":"5 \nin unjust and unreasonable rates for transmission service.” Order, P 66. The cost \nrecovery agreements address part of this problem, but other aspects of the problem \nremain unaddressed: regional cost allocation methods. As Commissioner Chang \nidentified in her concurrence, “bilateral agreements that simply provide \ntransmission revenue contributions untethered from any assessment of the actual \ncost of providing transmission service induced by individual large loads may be \ninsufficient to adequately protect other customers against unjustified cost shifts.” \nOrder (Chang, Comm’r, concurring at P 8). Thus, FERC should clarify and define \nthe unjust and unreasonable wholesale cost-shifting that exists in regional cost \nallocation methods, which may be beyond the scope of the proposed cost recovery \nagreements. \n2. \nThe PA OCA requests FERC’s clarification that parties in EL26-67 may develop an \nactionable record on regional wholesale cost allocation methods for Network \nUpgrades caused by large loads. FERC made a preliminary finding “that PJM’s \nTariff appears to be unjust and unreasonable because it lacks adequate mechanisms \nto mitigate the risk of cost shifting among transmission customers, which may result \nin unjust and unreasonable rates for transmission service.” Order, P 66. FERC \nrecognized that the PJM Tariff allocates the costs of Network Upgrades driven by \nlarge-load interconnections to transmission customers that “neither caused the need \nfor nor benefit commensurately from” those upgrades in violation of the Federal \nPower Act (FPA). Order at PP 79, 81. FERC further noted “that there may be a \nvariety of possible approaches to protect customers from significant cost shifts \nassociated with Network Upgrades triggered by large loads.” Id. P 107. But the"},{"page":6,"startToken":1476,"endToken":1733,"text":"6 \nOrder creates ambiguity whether parties can develop an actionable record on PJM’s \nwholesale cost allocation methods for Network Upgrades caused by large loads. \nFERC stated that its “preliminary finding [to prevent unjust and unreasonable cost \nshifting among transmission customers] is not intended to alter or call into question \nexisting regional cost allocation methods for Network Upgrades, but instead is \nfocused on helping to prevent cost shifting among transmission customers.” Order, \nP 81. Parties could read FERC’s statement in two relevant ways: (1) the \n“preliminary finding is not intended to alter or call into question existing regional \ncost allocation methods for Network Upgrades,” but parties may develop a record \non this subject—and the Commission may act on it; or (2) the “preliminary finding \nis not intended to alter or call into question existing regional cost allocation methods \nfor Network Upgrades,” and FERC has thus foreclosed parties from developing a \nrecord on this subject. The PA OCA requests clarification that the first reading—\nthat parties in EL26-67 may develop an actionable record on regional wholesale \ncost allocation methods for Network Upgrades caused by large loads—is correct. \nThe PA OCA further requests that FERC disavow the second reading because that \nreading would result in unjust and unreasonable cost allocation among transmission \ncustomers by ignoring wholesale cost shifts for Network Upgrades that these \ncustomers neither caused nor commensurately benefit from. \n \nRequests for Rehearing: \n1. \nTo the extent FERC does not clarify that the Order’s cost recovery agreements are \npartial and nonexclusive solutions to the wholesale transmission cost allocation"},{"page":7,"startToken":1733,"endToken":1995,"text":"7 \nproblem—or interprets the Order in a manner that does not sufficiently address the \nunjust and unreasonable transmission cost-shifting problem caused by Eligible \nCustomers serving large loads—the PA OCA requests rehearing. In that case, and \nto the extent the Commission’s determinations are final, the Commission’s \ndeterminations in the Order would violate the Federal Power Act and \nAdministrative Procedure Act because they would fail to solve a significant part of \nthe unjust and unreasonable cost-shifting that FERC expressly identified, and  \nwould do so without a reasoned explanation. FERC has exclusive jurisdiction over \nwholesale transmission cost allocation. And PJM’s existing rules for wholesale \ntransmission cost allocation impose cost shifts from Eligible Customers serving \nlarge loads to other transmission customers not serving large loads. Thus, \nconsumers in Pennsylvania and other states could be stuck with the burdensome \nresults stemming from unjust and unreasonable transmission rates if FERC chooses \nto ignore regional cost allocation under the FPA. FERC made a preliminary finding \n“that PJM’s Tariff appears to be unjust and unreasonable because it lacks adequate \nmechanisms to mitigate the risk of cost shifting among transmission customers, \nwhich may result in unjust and unreasonable rates for transmission service.” Order, \nP 66. The cost recovery agreements address part of this problem, but other aspects \nof the problem remain unaddressed: regional cost allocation. As Commissioner \nChang identified in her concurrence, “bilateral agreements that simply provide \ntransmission revenue contributions untethered from any assessment of the actual \ncost of providing transmission service induced by individual large loads may be \ninsufficient to adequately protect other customers against unjustified cost shifts.”"},{"page":8,"startToken":1995,"endToken":2280,"text":"8 \nOrder (Chang, Comm’r, concurring at P 8). It would be arbitrary, capricious, and \ncontrary to the FPA for the Commission to find that transmission customers “neither \ncaused the need for nor benefit commensurately from” Network Upgrades for large \nloads but fail to remedy the PJM Tariff to correct and prevent the full extent of those \nunjust and unreasonable cost shifts. Thus, the PA OCA requests rehearing to ensure \nthat FERC addresses the entire wholesale cost-shifting problem. See Order, PP 79, \n81. 16 U.S.C. § 825l(b); 5 U.S.C. § 706(2)(A); South Carolina Pub. Serv. Auth. v. \nFERC, 762 F.3d 41, 84-87 (D.C. Cir. 2014) (in the electric transmission context, \n“the Commission has ‘clear’ authority to reallocate capacity and production \ncosts.”); Motor Vehicle Mfrs. Ass’n. of United States, Inc. v. State Farm Mut. \nAutomobile Ins. Co., 463 U.S. 29, 43 (1983) (agency must “examine the relevant \ndata and articulate a . . . rational connection between the facts found and the choice \nmade”); Ill. Commerce Comm’n v. FERC, 576 F.3d 470, 476-77 (7th Cir. 2009) \n(summarizing cost causation and beneficiary pays principles); Mississippi Power \n& Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 371 (1988) (“States may \nnot alter FERC-ordered allocations . . . by substituting their own determinations of \nwhat would be just and fair.”); Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, \n165 (2016) (explaining that states may not “second-guess the reasonableness of \ninterstate wholesale rates” under FPA). \n \n2. \nTo the extent that FERC does not clarify, or denies, that parties in EL26-67 may \ndevelop an actionable record on regional wholesale cost allocation methods for \nNetwork Upgrades caused by large loads—the PA OCA requests rehearing. FERC"},{"page":9,"startToken":2280,"endToken":2574,"text":"9 \nhas exclusive jurisdiction over wholesale transmission cost allocation. And PJM’s \nexisting rules for wholesale transmission cost allocation impose cost shifts from \nEligible Customers serving large loads to other transmission customers not serving \nlarge loads. Thus, consumers in Pennsylvania could be stuck with the burdensome \nresults stemming from unjust and unreasonable transmission rates if FERC chooses \nto ignore regional cost allocation for Network Upgrades under the FPA. If FERC’s \nOrder does not allow parties to develop an actionable record on unjust and \nunreasonable regional wholesale cost allocation methods for Network Upgrades \ncaused by large loads, FERC will have sidestepped its statutory duty and failed to \nprovide a reasoned explanation for contradicting the express intent of its Order. It \nwould be arbitrary, capricious, and contrary to the FPA for the Commission to find \nthat transmission customers “neither caused the need for nor benefit \ncommensurately from” Network Upgrades for large loads but fail to remedy the \nPJM Tariff to correct and prevent the full extent of those unjust and unreasonable \ncost shifts. Thus, the PA OCA requests rehearing to ensure that FERC addresses the \nentire wholesale cost-shifting problem. See Order, PP 79, 81. 16 U.S.C. § 825l(b); \n5 U.S.C. § 706(2)(A); South Carolina Pub. Serv. Auth. v. FERC, 762 F.3d 41, 84-\n87 (D.C. Cir. 2014) (in the electric transmission context, “the Commission has \n‘clear’ authority to reallocate capacity and production costs.”); Motor Vehicle Mfrs. \nAss’n. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, \n43 (1983) (agency must “examine the relevant data and articulate a . . . rational \nconnection between the facts found and the choice made”); Ill. Commerce Comm’n \nv. FERC, 576 F.3d 470, 476-77 (7th Cir. 2009) (summarizing cost causation and"},{"page":10,"startToken":2574,"endToken":2860,"text":"10 \nbeneficiary pays principles); Mississippi Power & Light Co. v. Mississippi ex rel. \nMoore, 487 U.S. 354, 371 (1988) (“States may not alter FERC-ordered allocations \n. . . by substituting their own determinations of what would be just and fair.”); \nHughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 165 (2016) (explaining that \nstates may not “second-guess the reasonableness of interstate wholesale rates” \nunder FPA). \nIII. \nRequest for Clarification \nA. \nFERC should clarify that PJM’s existing regional cost allocation results in \nunjust and unreasonable transmission cost shifting for Network Upgrades \ncaused by service to large loads and that FERC’s proposed cost recovery \nagreements address a different aspect of unjust and unreasonable cost shifting. \nThe PA OCA requests FERC’s clarification that the Order’s pro forma cost recovery \nagreements will help solve some—but not all—of the Order’s stated unjust and unreasonable \ntransmission cost shifting caused by the influx of large loads to the grid. Specifically, FERC’s \nproposed cost recovery agreements secure the collection of revenue contributions from Eligible \nCustomers serving large loads under existing regional cost allocation methods. FERC’s \nclarification should specify an additional preliminary conclusion that existing regional cost \nallocation methods may result in unjust and unreasonable wholesale transmission cost shifting \nbetween Eligible Customers serving large loads and other transmission customers, because—under \nexisting methods—other transmission customers pay for Network Upgrade costs that they do not \ncause or commensurately benefit from. FERC made a preliminary finding “that PJM’s Tariff \nappears to be unjust and unreasonable because it lacks adequate mechanisms to mitigate the risk \nof cost shifting among transmission customers, which may result in unjust and unreasonable rates \nfor transmission service.”10 FERC further identified that these unjust and unreasonable rates burden \n \n10 Order, P 66."},{"page":11,"startToken":2860,"endToken":3146,"text":"11 \ntransmission customers that “neither caused the need for nor benefit commensurately from” \nNetwork Upgrades for large loads.11 The cost recovery agreements address part of this problem, \nbut other aspects of the problem remain unaddressed. \nAs Commissioner Chang identified in her concurrence, “bilateral agreements that simply \nprovide transmission revenue contributions untethered from any assessment of the actual cost of \nproviding transmission service induced by individual large loads may be insufficient to adequately \nprotect other customers against unjustified cost shifts.”12 \nUnjust and unreasonable wholesale transmission cost shifts from large loads in PJM can \nmanifest through unjust and unreasonable cost allocation of both RTEP projects and Supplemental \nProjects, not just by speculative large loads failing to pay their existing share under existing cost \nallocation methods. Indeed, wholesale Network Upgrade cost allocation happens at the regional \nlevel, under PJM’s Tariff Schedule 12 and Appendix A, and PJM’s Tariff, Section 34.1 and \nAttachment H, as explained below. These PJM Tariff provisions establish cost responsibility \nmethods for Network Upgrades for RTEP projects and Supplemental Projects, respectively. \nAccordingly, FERC should examine regional cost allocation for both RTEP projects and \nSupplemental Projects in this proceeding.  \nFor Network Upgrades designated as Supplemental Projects, PJM’s Tariff, Section 34.1, \nand Attachment H establish rates and cost responsibility for Network Integration Transmission \nService (NITS). Supplemental Project costs are allocated or assigned within the PJM zone in which \nthey are built. Pursuant to the FERC formula rate, the eligible costs of Supplemental Projects are \nincluded in the transmission owner’s revenue requirement. Attachment H calculates the NITS rate \n(expressed in dollars per megawatt), which is charged to all transmission customers within the \n \n11 Order, PP 79, 81. \n12 Order (Chang, Comm’r, concurring at P 8)."},{"page":12,"startToken":3146,"endToken":3493,"text":"12 \nzone, by dividing the allowable revenue requirement by the zone’s coincident peak demand.13 Each \nnetwork customer taking NITS service is charged the zonal NITS rates by PJM. Pursuant to PJM \nTariff, Section 34.1, a network customer’s monthly demand rate under the PJM tariff is calculated, \nin part, based on the NITS rates times the customer’s NSPL. \nA state cannot reach beyond its borders to sub-allocate charges that the PJM Tariff assigns \nto transmission customers in other states.14 Similarly, a state cannot protect ratepayers from costs \nof Network Upgrades designated as Supplemental Projects in a PJM Transmission Zone that spans \nmore than one state. It appears that the following seven zones include substantial territories in at \nleast two states: American Electric Power (AEP), Allegheny Power Systems (AP), American \nTransmission Systems, Inc. (ATSI), Delmarva Power & Light (DP&L), Dominion, Duke Energy \nOhio and Kentucky (DEO&K), and Potomac Electric Power (PEPCO). These seven multi-state \nZones comprise 52 percent of PJM’s peak load.15 Two other Zones (EKPC and JCP&L) have small \nprotrusions into a second state. Because large loads occupy small geographic footprints, even these \nmodest extensions into a second state could enable significant cost shifts that a state commission \nwould be incapable of remedying. Thus, across more than half of PJM, retail sub-allocation cannot \nundo cost shifts that have already occurred among transmission customers through the PJM Tariff. \nFor Network Upgrades selected through the Regional Transmission Expansion Plan \n(RTEP) process, PJM’s Tariff Schedule 12 and Appendix A include the cost allocation and cost \nresponsibility assignments. Under PJM’s Tariff Schedule 12, PJM determines cost responsibility \nfor Network Upgrades in a two-step process. First, PJM determines a transmission owner’s zonal \n \n13 Transmission Rate Cases in PJM, David Gardiner and Associates (Feb. 2024), https://www.dgardiner.com/wp-\ncontent/uploads/2024/04/CAPS-DGA_PJM-Transmission-Handbook-Vol-7.pdf.  \n14 Cf. Order, PP 70-72 (encouraging state “sub-allocation” without recognizing states’ limits regarding wholesale \ntransmission costs). \n15 See PJM Network Service Peak Loads for 2026, PJM (last visited July 17, 2026), https://www.pjm.com/-\n/media/DotCom/markets-ops/settlements/network-service-peak-loads-2026.pdf."},{"page":13,"startToken":3493,"endToken":3850,"text":"13 \ncost responsibility. To determine a zone’s cost responsibility, PJM sorts RTEP facilities into two \ncategories: Regional Facilities or Lower Voltage Facilities. For Regional Facilities, PJM \ndetermines zonal cost responsibility for RTEP facilities using a hybrid methodology involving a \n50/50 split of each zone’s load factor and distribution factor (DFAX). For Lower Voltage Facilities, \nPJM determines the zonal cost responsibility based solely on the DFAX method. After PJM \nestablishes the zonal cost responsibility for the RTEP facilities, PJM then engages in further cost \nallocation to recover the costs from network customers. Specifically, PJM recovers the zonal \nrevenue requirement by charging a Transmission Enhancement Charge (TEC) to each network \ncustomer based on the customer’s network service peak load (NSPL) in the zone. The TEC appears \nas a separate line item on the network customer’s PJM bill. The revenue that PJM collects from \nthe network customers is then credited to the transmission owner in the amount equal to the \ntransmission owner’s established formula revenue requirement for the subject RTEP facilities.16 \nFurther, regarding RTEP projects, the Maryland Office of People’s Counsel has filed a \nComplaint under FPA section 206 addressing alleged wholesale cost shifting.17 That Complaint \nalleges that PJM’s Tariff is currently shifting wholesale RTEP costs in an unjust and unreasonable \nmanner. Dozens of parties have intervened in that docket, which illustrates the timeliness and \nrelevance of wholesale transmission cost allocation in PJM that extends beyond the cost recovery \nagreements’ reach. \nThus, FERC should clarify and define the unjust and unreasonable wholesale cost-shifting \nthat exists beyond the reach of the proposed cost recovery agreements. FERC should clarify in a \n \n16 PJM OATT Sch. 12. In the transmission owner’s formula rates, the transmission owner determines the revenue \nrequirement associated with each RTEP project included in its transmission rate base and gives that to PJM to \ndetermine cost allocation and billing.  The TEC-eligible revenue requirement is excluded from the zonal revenue \nrequirement used by the transmission owner to determine the NITS rate. \n17 Amended Complaint, Maryland Office of People’s Counsel v. PJM Interconnection, LLC, Docket No. EL26-63 \n(May 22, 2026), https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20260522-5245."},{"page":14,"startToken":3850,"endToken":4146,"text":"14 \nway that permit parties in this proceeding to develop a record that would support requiring PJM \nand the PJM Transmission Owners to change their cost allocation provisions to account for \nNetwork Upgrades, including both regional and supplemental projects. \nB. \nFERC should clarify that the Order allows parties to develop a robust, \nactionable record on the entire unjust and unreasonable cost-shifting problem \nwithin FERC’s authority under the FPA—including regional cost allocation \nmethods for Network Upgrades caused by large loads. \nThe PA OCA requests FERC to clarify that parties can build an actionable record on the \nentire unjust and unreasonable cost shifting problem within FERC’s statutory domain, not just part \nof it. In the Order, the Commission recognized that Network Upgrades driven by large-load \ninterconnections to transmission customers can include Supplemental Projects or RTEP projects.18 \nFERC has preliminarily identified transmission cost shifts—caused by large loads—as unjust and \nunreasonable,19 given that the costs of Network Upgrades driven by large-load interconnections \nare shifted to transmission customers that “they neither caused the need for nor benefit \ncommensurately from.”20  To address the entirety of the unjust and unreasonable cost shifting \nproblem, the Commission must examine and remedy the regional allocation methods for Network \nUpgrades caused by large loads—in addition to the cost shifting protections addressed in the \nCommission’s Order. As explained above, wholesale Network Upgrade cost allocation happens at \nthe regional, PJM level. \nBut there is a source of confusion: in the Order, FERC stated that its “preliminary finding \n[to prevent unjust and unreasonable cost shifting among transmission customers] is not intended \nto alter or call into question existing regional cost allocation methods for Network Upgrades, but \n \n18 Id. at P 72. \n19 Order, PP 66, 77, 107. \n20 Order at PP 79, 81."},{"page":15,"startToken":4146,"endToken":4546,"text":"15 \ninstead is focused on helping to prevent cost shifting among transmission customers.”21 Parties \nseeking to impose large loads’ costs onto everyday ratepayers may try to use FERC’s statement to \npreclude advocates from developing a record on necessary modifications to “existing regional cost \nallocation methods for Network Upgrades.”  \nParties could read FERC’s statement in two relevant ways: (1) the “preliminary finding is \nnot intended to alter or call into question existing regional cost allocation methods for Network \nUpgrades,” but parties may develop a record on this subject—and the Commission may act on it; \nor (2) the “preliminary finding is not intended to alter or call into question existing regional cost \nallocation methods for Network Upgrades,” and FERC has thus foreclosed parties from developing \na record on this subject. FERC should clarify that the first reading is correct. \nFurther, FERC should disavow the second reading because that reading would result in \nunjust and unreasonable cost shifting among transmission customers by ignoring wholesale cost \nshifts, as explained below. By rejecting the second reading, FERC would uphold the Order’s \nexpress consumer protection purposes.22 \nThus, to effectuate the Order’s express purpose to protect consumers from unjust and \nunreasonable cost shifts,23 FERC should examine and remedy PJM’s regional cost allocation \nmethods for Network Upgrades.24 And to examine and remedy regional wholesale cost allocation \n \n21 Id. at P 81. \n22 Order, PP 66, 77, 107 (preliminarily finding PJM’s Tariff unjust and unreasonable based on transmission cost \nshifting concerns). \n23 Order, PP 66, 77, 107 (preliminarily finding PJM’s Tariff unjust and unreasonable based on transmission cost shifts \ncaused by large loads). \n24 Id. (Chang, Comm’r, concurring at PP 6, 8) (identifying that FERC should examine unjustified cost shifts at the \nwholesale level that result from large loads); Advance Notice of Proposed Rulemaking at P 25, Interconnection of \nLarge Loads to the Interstate Transmission System, Docket No. RM26-4-000 (Oct. 27, 2025) (proposing that load and \nhybrid facilities should be responsible for 100 percent of the network upgrades assigned to them through \ninterconnection studies); Proclamation No. 11014, 91 Fed. Reg. 11439 (Mar. 4, 2026); Ratepayer Protection Pledge, \nTHE WHITE HOUSE (Mar. 4, 2026), https://www.whitehouse.gov/releases/2026/03/ratepayer-protection-pledge/ \n(“Companies will pay for all new power delivery infrastructure upgrades required to service their data centers, \nincluding adequate network upgrade costs to ensure that these expenses are not passed on to the ordinary"},{"page":16,"startToken":4546,"endToken":5181,"text":"16 \nproperly, FERC needs to develop a record on that subject.25 By doing so, FERC would further the \nconsumer protection purposes expressed in the Order,26 the ANOPR,27 the FPA,28 and the White \nHouse’s Ratepayer Protection Pledge.29 \nPublic participation and reasoned decision-making are cornerstones of federal rulemaking \nin the United States, including within administrative agencies such as FERC.30 Throughout this \nprocess, FERC should continue to value “the importance of public involvement and transparency \nin its decision-making processes.”31 FERC should do so by allowing parties to develop a robust, \nactionable record on regional cost allocation methods for Network Upgrades caused by large loads. \nAnd this record should support requiring PJM and the PJM Transmission Owners to change their \n \nhousehold.”); Mun. Light Bds. Of Reading and Wakefield v. FPC, 450 F.2d 1341, 1348 (D.C. Cir. 1971) (stating that \nthe FPA’s “primary aim is the protection of consumers from excessive rates and charges”). \n25 See, e.g., New Eng. Power Generators Ass’n v. FERC, 881 F.3d 202, 210-11 (D.C. Cir. 2018); La. PSC. V. FERC, \n20 F.4th 1, 6-7 (D.C. Cir. 2021) (citing 5 U.S.C. § 706(2)(A) and Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43)); see also \nOrder (Chang, Comm’r, concurring at P 8) ([T]he Commission needs a robust record in each docket and each region \nto ensure we establish the right cost shift protections for wholesale customers, including but not limited to the \ncommitments outlined in the Ratepayer Protection Pledge”). \n26 Order, PP 66, 77, 107 (preliminarily finding PJM’s Tariff unjust and unreasonable based on transmission cost shifting \nconcerns). \n27 Advance Notice of Proposed Rulemaking at P 25, Interconnection of Large Loads to the Interstate Transmission \nSystem, Docket No. RM26-4-000 (Oct. 27, 2025) (proposing that load and hybrid facilities should be responsible for \n100 percent of the network upgrades assigned to them through interconnection studies). \n28 See, e.g., Mun. Light Bds. Of Reading and Wakefield v. FPC, 450 F.2d 1341, 1348 (D.C. Cir. 1971) (stating that the \nFPA’s “primary aim is the protection of consumers from excessive rates and charges”). \n29 Proclamation No. 11014, 91 Fed. Reg. 11439 (Mar. 4, 2026); Ratepayer Protection Pledge, THE WHITE HOUSE \n(Mar. 4, 2026), https://www.whitehouse.gov/releases/2026/03/ratepayer-protection-pledge/ (“Companies will pay for \nall new power delivery infrastructure upgrades required to service their data centers, including adequate network \nupgrade costs to ensure that these expenses are not passed on to the ordinary household.”). \n30 See, e.g., Liquid Energy Pipeline Ass’n v. FERC, 109 F.4th 543, 547 (D.C. Cir. 2024) (noting importance of public \nparticipation and reasoned decision-making in APA notice-and-comment rulemaking). Cf. JOHN RAWLS, A THEORY \nOF JUSTICE 221-25 (1st ed. 1971) (describing principle of equal participation in canonical work of American political \nphilosophy). \nIf the public forum is to be free and open to all, and in continuous session, everyone should be able \nto make use of it. All citizens should have the means to be informed about political issues. They \nshould be in a position to assess how proposals affect their well-being and which policies advance \ntheir conception of the public good. Moreover, they should have a fair chance to add alternative \nproposals to the agenda for political discussion. The liberties protected by the principle of \nparticipation lose much of their value whenever those who have greater private means are permitted \nto use their advantages to control the course of public debate. Id. at 225 (emphasis added). \n31 Sierra Club v. FERC, 97 F.4th 16, 21 n.1 (D.C. Cir. 2024) (quoting Nat’l Fuel Extension Order, 179 FERC ¶ \n61,226, at P 9 (June 29, 2022), reh’g denied by Nat’l Fuel Gas Supply Corp., 180 FERC ¶ 62099 (Aug. 30, 2022))."},{"page":17,"startToken":5181,"endToken":5482,"text":"17 \ncost allocation provisions to account for Network Upgrades, including both regional and \nsupplemental projects. \nIn the ANOPR docket, RM26-4, the Department of Energy proposed that FERC should \nallocate 100 percent of Network Upgrade costs to large load customers.32 It would be arbitrary and \ncapricious for the Commission to now limit the record development in this proceeding to a discrete \nsubset of cost shifting without reasoned decision-making as to why other aspects of wholesale cost \nallocation are precluded from record development.  \nSeveral parties in the ANOPR docket raised the existing cost allocation issues and \npresented just and reasonable solutions to remedy it, in supplemental comments submitted \nfollowing the reply comment period. This demonstrates consensus among various parties that \nwholesale cost allocation is unjust and unreasonable, relevant, and unresolved. Specifically, parties \nin RM26-4 filed the following Supplemental Comments on the topic: \n• March 30, 2026: WIRES’ Supplemental Comments with attached Whitepaper titled \n“The Risks of Cost Shifts in Serving Large Loads Under a Framework with Direct \nAllocation of Transmission Costs” (WIRES Whitepaper);33 \n• April 15, 2026: Harvard Electricity Law Initiative’s (ELI’s) Supplemental \nComments;34 \n• May 12, 2026: Transmission Access Policy Study Group’s (TAPS’) Supplemental \nComments;35 \n• June 6, 2026: FirstEnergy Service Company’s (FirstEnergy’s) Supplemental \nComments with attached Whitepaper titled “A Provent Framework for a New \nAmerican Problem” (FirstEnergy Whitepaper);36 \n• June 8, 2026: Maven Solutions’ Supplemental Comments ;37 and \n \n32 ANOPR at P 25 (see Principal Eight proposing that load and hybrid facilities should be responsible for \n100 percent of the network upgrades assigned to them through the interconnection studies). \n33 WIRES Supplemental Comments, RM26-4 (Mar. 30, 2026). \n34 Harvard ELI Supplemental Comments, RM26-4 (Apr. 15, 2026). \n35 TAPS Supplemental Comments, RM26-4 (May 12, 2026). \n36 FirstEnergy Supplemental Comments, RM26-4 (Jun. 6, 2026). \n37 Maven Solutions Supplemental Comments, RM26-4 (Jun. 8, 2026)."},{"page":18,"startToken":5482,"endToken":5826,"text":"18 \n• June 15, 2026 : Joint Supplemental Comments of the PA OCA, Delaware Division \nof the Public Advocate (DE DPA), and State of New Jersey, Division of the Rate \nCounsel.38 \n \nFor Supplemental Projects, the unjust and unreasonable wholesale cost allocation and cost \nshifting problem results from a gap between the rolled-in NITS costs recovered from large loads \nunder PJM’s existing Tariff, and the incremental costs that this method fails to properly allocate to \nEligible Customers serving large loads for Network Upgrades caused by the large loads’ \nintegration to the grid. In response to this problem, FirstEnergy filed supplemental comments in \nRM26-4 proposing a just and reasonable rate solution,39 which the PA OCA supported through \nsupplemental comments, referred to hereafter as the “Expansion Rate Policy”.40 FirstEnergy noted \nthat “[t]he electric transmission cost-shift now emerging across the United States is structurally \nidentical to a problem the natural gas industry confronted three decades ago—and one FERC \nalready solved.”41 Moreover, FirstEnergy and the PA OCA emphasized agreement among the large \n“hyperscaler” firms and the White House that those firms will “bear the costs of the power-delivery \ninfrastructure required to support their facilities.”42 \nThe Expansion Rate Policy proposal would require Eligible Customers serving large loads \nto pay an embedded cost rate and separate expansion rate. All transmission customers within the \nzone, including Eligible Customers, would be charged a NITS rate for the embedded costs of the \nsystem that excludes Network Upgrades driven by large load interconnections. In addition, Eligible \nCustomers serving large loads would be charged a separate expansion rate to recover the Network \nUpgrades driven by large load interconnections. The separate expansion rate would be expressed \n \n38 Joint Consumer Advocates Supplemental Comments, RM26-4 (Jun. 15, 2026). \n39 See generally FirstEnergy Supplemental Comments. \n40 See Joint Consumer Advocates Supplemental Comments, RM26-4 (Jun. 15, 2026), \nhttps://elibrary.ferc.gov/eLibrary/docinfo?accession_number=20260615-5141. \n41 FirstEnergy Supplemental Comments, App’x at 2. \n42 Id., App’x at 3 (citing Ratepayer Protection Pledge, THE WHITE HOUSE (Mar. 4, 2026), \nhttps://www.whitehouse.gov/releases/2026/03/ratepayer-protection-pledge/)."},{"page":19,"startToken":5826,"endToken":6187,"text":"19 \nthrough a pro forma cost recovery agreement between PJM, the relevant transmission owner, and \nthe Eligible Customer taking transmission service on behalf of large loads that recover the costs \nof the Network Upgrades. \nThe agreement would specify the depreciation of the capital costs over the term of \nagreement and use of the transmission owner’s return on equity, capital structure, and debt \nassumptions to mirror those already embedded in the incumbent zonal transmission rate, to avoid \npreferential treatment or punitive pricing. Further, the agreement would require the Eligible \nCustomer to maintain creditworthy collateral support equal to the remaining unrecovered balance \nof the expansion facilities over the life of agreement to protect existing transmission customers \nfrom residual exposure. At the end of term of agreement, after the expansion facilities have been \nfully recovered through the expansion rate, the expansion facilities would transition into the \ntransmission owner’s integrated system rate base. \nAs the Joint Consumer Advocates explained in Supplemental Comments, the Expansion \nRate Policy articulated the FirstEnergy Supplemental Comments is consistent with the \nCommission’s Transmission Pricing Policy.43 The Commission’s Transmission Pricing Policy \nclearly provides that the use of a disaggregated approach is “or” pricing because it does not charge \nthe same customer for the same facilities twice.44 Because a line-by-line incremental rate would \nexclude the expansion transmission facilities from the embedded network rate base recovered in \nNITS, the Eligible Customer serving the large load would be charged once for using the expansion \n \n43 Inquiry Concerning the Commission’s Pricing Policy for Transmission Services Provided by Public Utilities \nUnder the Federal Power Act, 69 FERC ¶ 61,086, n. 34 (1994) (Transmission Pricing Policy). The Commission \nclarified: “Under a line-by-line pricing method, the costs of each transmission line, or segment, are allocated to \nindividual transmission transactions, based on the usage each transaction makes of each line or segment.” Id. at n.30. \n44 NorthWestern Corp., 147 FERC ¶ 61,171, P 53 (2014) (“[A] public utility may charge the higher of: (1) an \naverage-cost transmission rate reflecting the average cost of the transmission grid, including the costs of expanding \nthe grid, or (2) an incremental-cost transmission rate reflecting the costs of the particular service involved”)."},{"page":20,"startToken":6187,"endToken":6477,"text":"20 \nfacilities (via the incremental rate) and once for using the existing transmission network (via the \nembedded rate).45 Hence, there is no violation of the prohibition against “and” pricing. \nThe Expansion Rate Policy proposal is a practical solution that would help in part to \nremedy unjust and unreasonable cost shifts for other transmission customers for Supplemental \nProjects, in addition to the other cost shifting protections discussed in the Commission’s Order. \nAnd it serves as an excellent example of the record-development necessary to enable reasoned \ndecision-making addressing all aspects of wholesale transmission cost shifting. Accordingly, \nFERC should clarify that the Order allows parties to develop a robust, actionable record on regional \ncost allocation methods for Network Upgrades caused by large loads—including methods for \nRTEP Projects and Supplemental Projects. \nIV. \nRequest for Rehearing \nA. \nFERC’s Order violates the Federal Power Act and Administrative Procedure \nAct to the extent FERC interprets the Order to sufficiently address the \nwholesale transmission cost-shifting problem caused by large loads. \nThe Order’s pro forma cost recovery agreements will help solve some—but not all—of the \nOrder’s stated transmission cost shifting problem caused by large loads. Other aspects of wholesale \ntransmission cost shifting are, or may be, caused by large loads. FERC made a preliminary finding \n“that PJM’s Tariff appears to be unjust and unreasonable because it lacks adequate mechanisms to \nmitigate the risk of cost shifting among transmission customers, which may result in unjust and \nunreasonable rates for transmission service.”46 FERC further identified that these unjust and \nunreasonable rates burden transmission customers that “neither caused the need for nor benefit \ncommensurately from” Network Upgrades for large loads.47 The cost recovery agreements address \n \n45 Id.  \n46 Order, P 66. \n47 Order, PP 79, 81."},{"page":21,"startToken":6477,"endToken":6815,"text":"21 \npart of this problem, but other aspects of the problem remain unaddressed: regional cost allocation \nmethods. \nAccordingly, Commissioner Chang identified in her concurrence that “bilateral agreements \nthat simply provide transmission revenue contributions untethered from any assessment of the \nactual cost of providing transmission service induced by individual large loads may be insufficient \nto adequately protect other customers against unjustified cost shifts.”48 As explained in Section \nIII.A, PJM’s existing rules for wholesale transmission cost allocation impose unjust and \nunreasonable rates on transmission customers because (1) transmission customers not serving large \nloads are required to pay for Network Upgrade costs that they do not cause or commensurately \nbenefit from, and (2) Eligible Customers serving large loads are not required to pay 100 percent \nof the Network Upgrades needed to accommodate the integration of the large loads to the grid. For \nexample, FirstEnergy—a utility company that serves as a PJM Transmission Owner—identified \nthat: \nUnder the Federal Energy Regulatory Commission’s current rules, when a utility \nconstructs new high-voltage transmission lines and substations to connect a single \nnew data center, the cost of that infrastructure is spread across all customers in the \nsurrounding region. Ordinary families and small businesses see their electric bills \nrise to support facilities that were built to serve the new data center facilities.49 \n \nThe existing, unjust and unreasonable wholesale cost allocation means that existing consumers in \nPennsylvania and other states could be stuck with the burdensome results of paying for increased \ncosts caused by large load integration. This will occur if FERC derogates its duty under the FPA. \nFurther, states may not re-allocate FERC’s wholesale cost allocations.50 States can only \nexercise their retail authority to re-allocate costs at the retail level. \n \n48 Order (Chang, Comm’r, concurring at P 8). \n49 FirstEnergy Supplemental Comments, App’x at 2. \n50 Cf. Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 165 (2016) (explaining that states may not “second-guess \nthe reasonableness of interstate wholesale rates” under FPA); see also Mississippi Power & Light Co. v. Mississippi"},{"page":22,"startToken":6815,"endToken":7263,"text":"22 \nFERC is the only regulatory agency that can solve the entirety of the unjust and \nunreasonable cost-shifting problem, because FERC has exclusive jurisdiction over wholesale \ntransmission cost allocation.51 Wholesale Network Upgrade cost allocation happens at the regional \nlevel, under PJM’s Tariff Schedule 12 and Appendix A, and PJM’s Tariff, Section 34.1 and \nAttachment H. These Tariff provisions establish cost allocation and assignment methods for \nNetwork Upgrades, as the PA OCA described above in Section III.A. FERC regulates PJM’s Tariff \nand the wholesale costs that transmission customers pay—the states cannot regulate PJM’s Tariff. \nAnd FERC has the power to reallocate wholesale transmission costs to ensure just and reasonable \ntransmission rates. In fact—in the transmission context—“the Commission has ‘clear’ authority to \nreallocate capacity and production costs.”52 \nIf FERC’s interprets the Order to sufficiently address the wholesale transmission cost-\nshifting problem caused by large loads, FERC will have sidestepped its statutory duty and \ncontradicting the express purpose of its Order. It would be arbitrary, capricious, and contrary to \nthe FPA for the Commission to find that transmission customers “neither caused the need for nor \nbenefit commensurately from” Network Upgrades for large loads, and then restrict the remedy to \naddress merely a portion of the unreasonable cost shifts.53 Thus, to address the unjust and \nunreasonable wholesale cost-shifting that exists beyond the reach of the states and the proposed \ncost recovery agreements, FERC should grant the OCA’s rehearing request. \n \nex rel. Moore, 487 U.S. 354, 371 (1988) (“States may not alter FERC-ordered allocations . . . by substituting their \nown determinations of what would be just and fair.”). \n51 16 U.S.C. § 824(b)) (providing that the FPA “shall apply to the transmission of electric energy in interstate commerce \nand to the sale of electric energy at wholesale in interstate commerce.”). \n52 South Carolina Pub. Serv. Auth. v. FERC, 762 F.3d 41, 84 (D.C. Cir. 2014) (first citing La. Pub. Serv. Comm'n v. \nFERC, 522 F.3d 378, 389-90 (D.C. Cir. 2008); then citing Miss. Indus. v. FERC, 808 F.2d 1525, 1540 (D.C. Cir. 1987); \nand then citing FirstEnergy Serv. Co. v. FERC, 758 F.3d 346, 354-55 (D.C. Cir. 2014)). \n53 See Order, PP 79, 81; 5 U.S.C. § 706(2)(A); Motor Vehicle Mfrs. Ass’n. of United States, Inc. v. State Farm Mut. \nAutomobile Ins. Co., 463 U.S. 29, 43 (1983) (holding federal administrative agency must “examine the relevant data \nand articulate a . . . rational connection between the facts found and the choice made”); see also Ill. Commerce Comm’n \nv. FERC, 576 F.3d 470, 476-77 (7th Cir. 2009) (summarizing cost causation and beneficiary pays principles)."},{"page":23,"startToken":7263,"endToken":7749,"text":"23 \nB. \nFERC’s Order violates the Federal Power Act and Administrative Procedure \nAct to the extent that it precludes development of a robust, actionable record \non regional wholesale cost allocation methods for Network Upgrades caused \nby large loads. \nTo the extent that FERC does not clarify, or denies, that parties in EL26-67 may develop \nan actionable record on regional wholesale cost allocation methods for Network Upgrades caused \nby large loads—the Order violates the Federal Power Act and Administrative Procedure Act.54 \nFERC should grant rehearing and must not foreclose parties from developing an actionable record \non regional wholesale cost allocation methods for Network Upgrades caused by large loads. \nPJM’s existing rules for wholesale transmission cost allocation impose unjust and \nunreasonable rates on transmission customers because (1) transmission customers not serving large \nloads are required to pay for Network Upgrade costs that they do not cause or commensurately \nbenefit from, and (2) Eligible Customers serving large loads are not required to pay 100 percent \nof the Network Upgrades needed to accommodate the integration of the large loads to the grid. For \nexample, FirstEnergy—a utility company that serves as a PJM Transmission Owner—identified \nthat: \nUnder the Federal Energy Regulatory Commission’s current rules, when a utility \nconstructs new high-voltage transmission lines and substations to connect a single \nnew data center, the cost of that infrastructure is spread across all customers in the \nsurrounding region. Ordinary families and small businesses see their electric bills \nrise to support facilities that were built to serve the new data center facilities.55 \n \n \n54 See 16 U.S.C. § 824d (public utility rates and charges for transmission must be just and reasonable); 5 U.S.C. § \n706(2)(A); Motor Vehicle Mfrs. Ass’n. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 \n(1983) (holding federal administrative agency must “examine the relevant data and articulate a . . . rational connection \nbetween the facts found and the choice made”); see also Ill. Commerce Comm’n v. FERC, 576 F.3d 470, 476-77 (7th \nCir. 2009) (summarizing cost causation and beneficiary pays principles); New Eng. Power Generators Ass’n v. FERC, \n881 F.3d 202, 210-11 (D.C. Cir. 2018) (identifying FERC must reach conclusions that are “reasoned, principled, and \nbased upon the record”); La. PSC. V. FERC, 20 F.4th 1, 6-7 (D.C. Cir. 2021) (citing 5 U.S.C. § 706(2)(A) and Motor \nVehicle Mfrs. Ass’n, 463 U.S. at 43) (stating that if FERC “does not provide a rational explanation for its action based \non relevant data, then that action is arbitrary and capricious.”); Order (Chang, Comm’r, concurring at P 8) ([T]he \nCommission needs a robust record in each docket and each region to ensure we establish the right cost shift protections \nfor wholesale customers, including but not limited to the commitments outlined in the Ratepayer Protection Pledge”). \n55 FirstEnergy Supplemental Comments, App’x at 2."},{"page":24,"startToken":7749,"endToken":8073,"text":"24 \nThis is no tangential matter. To the contrary, Network Upgrade cost allocation has been \ncentral to the public discourse in and around this proceeding and the related ANOPR docket. In \nthe ANOPR that initiated this regulatory effort on large load interconnections, U.S. Secretary of \nEnergy Chris Wright proposed that load and hybrid facilities should be responsible for 100 percent \nof the network upgrades assigned to them through interconnection studies.56 And the White House \nagreed with “hyperscaler” AI data center developers Amazon, Google, Meta, Microsoft, OpenAI, \nOracle, and xAI that “companies will pay for all new power delivery infrastructure upgrades \nrequired to service their data centers, including adequate network upgrade costs to ensure that \nthese expenses are not passed on to the ordinary household.”57 Moreover, wholesale transmission \ncost allocation became the central topic of supplemental comments in the latter part of RM26-4, \nleading into this proceeding. \nSpecifically, parties in RM26-4 filed the following Supplemental Comments on the topic: \n• March 30, 2026: WIRES’ Supplemental Comments with attached Whitepaper titled \n“The Risks of Cost Shifts in Serving Large Loads Under a Framework with Direct \nAllocation of Transmission Costs” (WIRES Whitepaper);58 \n• April 15, 2026: Harvard Electricity Law Initiative’s (ELI’s) Supplemental \nComments;59 \n• May 12, 2026: Transmission Access Policy Study Group’s (TAPS’) Supplemental \nComments;60 \n• June 6, 2026: FirstEnergy Service Company’s (FirstEnergy’s) Supplemental \nComments with attached Whitepaper titled “A Provent Framework for a New \nAmerican Problem” (FirstEnergy Whitepaper);61 \n \n56 Advance Notice of Proposed Rulemaking at P 25, Interconnection of Large Loads to the Interstate Transmission \nSystem, Docket No. RM26-4 (Oct. 27, 2025). \n57 \nRatepayer \nProtection \nPledge, \nTHE \nWHITE \nHOUSE \n(Mar. \n4, \n2026), \nhttps://www.whitehouse.gov/releases/2026/03/ratepayer-protection-pledge/; Proclamation No. 11014, 91 Fed. Reg. \n11439 (Mar. 4, 2026). \n58 WIRES Supplemental Comments, RM26-4 (Mar. 30, 2026). \n59 Harvard ELI Supplemental Comments, RM26-4 (Apr. 15, 2026). \n60 TAPS Supplemental Comments, RM26-4 (May 12, 2026). \n61 FirstEnergy Supplemental Comments, RM26-4 (Jun. 6, 2026)."},{"page":25,"startToken":8073,"endToken":8490,"text":"25 \n• June 8, 2026: Maven Solutions’ Supplemental Comments ;62 and \n• June 15, 2026 : Joint Supplemental Comments of the PA OCA, Delaware Division \nof the Public Advocate (DE DPA), and State of New Jersey, Division of the Rate \nCounsel.63 \n \n It would be arbitrary and capricious if the Commission limits the record development in \nthis proceeding to an incomplete segment of cost shifting without reasoned decision-making as to \nwhy parties cannot develop a record on the rest of the cost-allocation problem. \nFERC is the only regulatory agency that can solve the entirety of the unjust and \nunreasonable cost-shifting problem, because FERC has exclusive jurisdiction over wholesale \ntransmission cost allocation.64 Wholesale Network Upgrade cost allocation happens at the regional \nlevel, under PJM’s Tariff Schedule 12 and Appendix A, and PJM’s Tariff, Section 34.1 and \nAttachment H. These Tariff provisions establish cost allocation and assignment methods for \nNetwork Upgrades, as the PA OCA described above in Section III.A. FERC regulates PJM’s Tariff \nand the wholesale costs that transmission customers pay—the states cannot. And FERC has the \npower to reallocate wholesale transmission costs to ensure just and reasonable transmission rates. \nIn fact—in the transmission context—“the Commission has ‘clear’ authority to reallocate capacity \nand production costs.”65 \nIf FERC’s Order does not allow parties to develop an actionable record on regional \nwholesale cost allocation methods for Network Upgrades caused by large loads, FERC will have \n \n62 Maven Solutions Supplemental Comments, RM26-4 (Jun. 8, 2026). \n63 Joint Consumer Advocates Supplemental Comments, RM26-4 (Jun. 15, 2026). \n64 16 U.S.C. § 824(b)) (providing that the FPA “shall apply to the transmission of electric energy in interstate commerce \nand to the sale of electric energy at wholesale in interstate commerce.”). Cf. Hughes v. Talen Energy Mktg., LLC, 578 \nU.S. 150, 165 (2016) (explaining that states may not “second-guess the reasonableness of interstate wholesale rates” \nunder FPA); see also Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 371 (1988) (“States \nmay not alter FERC-ordered allocations . . . by substituting their own determinations of what would be just and fair.”). \n65 South Carolina Pub. Serv. Auth. v. FERC, 762 F.3d 41, 84 (D.C. Cir. 2014) (first citing La. Pub. Serv. Comm'n v. \nFERC, 522 F.3d 378, 389-90 (D.C. Cir. 2008); then citing Miss. Indus. v. FERC, 808 F.2d 1525, 1540 (D.C. Cir. 1987); \nand then citing FirstEnergy Serv. Co. v. FERC, 758 F.3d 346, 354-55 (D.C. Cir. 2014))."},{"page":26,"startToken":8490,"endToken":8748,"text":"26 \nsidestepped its statutory duty and failed to provide a reasoned explanation for contradicting the \nexpress purpose of its Order. It would be arbitrary, capricious, and contrary to the FPA for the \nCommission to find that transmission customers “neither caused the need for nor benefit \ncommensurately from” Network Upgrades for large loads, and then fail to build the record \nnecessary to remedy the PJM Tariff and prevent unjust and unreasonable cost shifts.66 FERC \noffered no reasonable explanation for this decision. FERC should grant rehearing and must not \nforeclose parties from developing an actionable record on regional wholesale cost allocation \nmethods for Network Upgrades caused by large loads. \nV. \nConclusion \nThe Order correctly finds that the PJM Tariff shifts the costs of Network Upgrades for large \nloads to transmission customers that neither caused nor benefit from them. The OCA respectfully \nrequest that the Commission clarify its Order, or in the alternative grant rehearing, to permit record \ndevelopment on regional cost allocation to protect transmission customers from paying costs for \nNetwork Upgrades that they do not cause or commensurately benefit from. \n \n66 See Order, PP 79, 81; 5 U.S.C. § 706(2)(A); Motor Vehicle Mfrs. Ass’n. of United States, Inc. v. State Farm Mut. \nAutomobile Ins. Co., 463 U.S. 29, 43 (1983) (holding federal administrative agency must “examine the relevant data \nand articulate a . . . rational connection between the facts found and the choice made”); see also Ill. Commerce Comm’n \nv. FERC, 576 F.3d 470, 476-77 (7th Cir. 2009) (summarizing cost causation and beneficiary pays principles)."},{"page":27,"startToken":8748,"endToken":8806,"text":"27 \nCounsel for: \nDarryl Lawrence \nConsumer Advocate \nPennsylvania Office of Consumer Advocate \n555 Walnut Street \n5th Floor, Forum Place \nHarrisburg, PA 17101-1923 \n717-783-5048 \nDated: July 17, 2026 \nRespectfully submitted, \n \n \n \n/s/ Josiah Harmar \nJosiah Harmar \nAssistant Consumer Advocate \nPA Attorney ID # 338426 \nJHarmar@paoca.org \nMelanie Joy El Atieh \nDeputy Consumer Advocate \nPA Attorney ID # 209323 \nMElAtieh@paoca.org"},{"page":28,"startToken":8806,"endToken":8843,"text":"CERTIFICATE OF SERVICE \nI certify that today I served this document on this proceeding’s official service list. \n \nHarrisburg, Pennsylvania; July 17, 2026. \n \n/s/ Josiah Harmar \n \nJosiah Harmar \nAssistant Consumer Advocate \nPA Attorney ID # 338426 \nJHarmar@paoca.org"}],"sections":[{"p":1,"at":0,"title":"Opening text","method":"opening text","endPage":1,"endAt":665,"startToken":0,"endToken":90},{"p":1,"at":665,"title":"I. Summary of Request for Clarification or Rehearing","method":"printed heading","endPage":4,"endAt":114,"startToken":90,"endToken":882},{"p":4,"at":114,"title":"II. Statement of Issues","method":"printed heading","endPage":10,"endAt":423,"startToken":882,"endToken":2637},{"p":10,"at":423,"title":"III. Request for Clarification","method":"printed heading","endPage":10,"endAt":456,"startToken":2637,"endToken":2641},{"p":10,"at":456,"title":"A. FERC should clarify that PJM’s existing regional cost allocation results in","method":"printed heading","endPage":14,"endAt":262,"startToken":2641,"endToken":3889},{"p":14,"at":262,"title":"B. FERC should clarify that the Order allows parties to develop a robust,","method":"printed heading","endPage":20,"endAt":897,"startToken":3889,"endToken":6316},{"p":20,"at":897,"title":"IV. Request for Rehearing","method":"printed heading","endPage":20,"endAt":925,"startToken":6316,"endToken":6320},{"p":20,"at":925,"title":"A. FERC’s Order violates the Federal Power Act and Administrative Procedure","method":"printed heading","endPage":23,"endAt":4,"startToken":6320,"endToken":7264},{"p":23,"at":4,"title":"B. FERC’s Order violates the Federal Power Act and Administrative Procedure","method":"printed heading","endPage":26,"endAt":714,"startToken":7264,"endToken":8598},{"p":26,"at":714,"title":"V. Conclusion","method":"printed heading","endPage":26,"endAt":718,"startToken":8598,"endToken":8599},{"p":26,"at":718,"title":"Conclusion","method":"printed heading","endPage":28,"endAt":0,"startToken":8599,"endToken":8806},{"p":28,"at":0,"title":"CERTIFICATE OF SERVICE","method":"printed heading","endPage":28,"endAt":266,"startToken":8806,"endToken":8843}]}