EL26-67-001 · 2026-07-20 · Exelon CorporationThe FirstEnergy Transmission Companies

Exelon Corporation and FirstEnergy Service Company submit Request for Rehearing of the 06/18/2026 Order

UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
 
PJM Interconnection, L.L.C., et al.   
)  
 
Docket No. EL26-67-000 
 
REQUEST FOR REHEARING OF EXELON CORPORATION AND  
FIRSTENERGY SERVICE COMPANY 
 
Pursuant to Federal Power Act (“FPA”) section 3131 and Rule 7132 of the Rules of Practice 
and Procedure of the Federal Energy Regulatory Commission (“FERC” or “Commission”), Exelon 
Corporation3 and FirstEnergy Service Company4 (together “Exelon and FirstEnergy”) request 
rehearing of the Commission’s June 18 Order Instituting Proceeding Under Section 206 of the 
Federal Power Act (“Show Cause Order”)5 insofar as the Commission found that PJM’s Open 
Access Transmission Tariff (“PJM Tariff”) appears to be unjust and unreasonable without new 
transmission services that would be available to “large load” customers, specifically what the 
Show Cause Order refers to as “flexible large loads.”6  The Commission’s findings that the PJM 
Tariff appears to be unjust and unreasonable without these new transmission service options is 
arbitrary and capricious and not based upon reasoned decision making.   
 
1  
16 U.S.C. § 825l(a). 
2  
See 18 C.F.R. § 385.713. 
3  
Exelon Corporation submits this rehearing request on behalf of its affiliates Atlantic City Electric Company, 
Baltimore Gas and Electric Company, Commonwealth Edison Company (“ComEd”), Commonwealth Edison 
Company of Indiana, Inc., Delmarva Power & Light Company, PECO Energy Company, and Potomac Electric 
Power Company. 
4  
FirstEnergy Service Company submits this rehearing request as agent for its affiliates American Transmission 
Systems, Incorporated, Jersey Central Power & Light Company, Mid-Atlantic Interstate Transmission LLC, 
Keystone Appalachian Transmission Company, The Potomac Edison Company, Monongahela Power Company 
and Trans-Allegheny Interstate Line Company (collectively, the “FirstEnergy Transmission Companies”). 
5  
PJM Interconnection, L.L.C., et al., 195 FERC ¶ 61,211 (2026). 
6  
See id. at P 86.

2 
 
In the Show Cause Order, the Commission preliminarily found that PJM’s Tariff appears 
to be unjust and unreasonable because it “does not include transmission services that reflect 
Eligible Customers taking transmission service on behalf of flexible large loads that are willing 
and able to limit their use of the transmission system under certain conditions.”7  The Commission 
noted that the existing transmission services in PJM consist of Network Integration Transmission 
Service and firm and non-firm Point-to-Point Transmission Service.  While the Commission stated 
that these remain just and reasonable options, the Commission directed PJM to address whether 
its Tariff remains just and reasonable without allowing Eligible Customers taking transmission 
service on behalf of “flexible large loads” the option of taking one or more of the three new 
transmission services that the Commission directed in its December 18, 2025 order on Co-Located 
Load in PJM.8 
Exelon and FirstEnergy seek rehearing of these findings for the same reasons they sought 
rehearing of the December 18 Co-Located Load Order’s requirement to adopt these new 
transmission services for Co-Located Load customers.  As with the December 18 Co-Located Load 
Order, the purported purpose of the Commission’s findings at issue here is to improve the 
availability of service to new large load customers and ensure that service to such customers does 
not impose unnecessary costs on existing customers.  But the creation of these new forms of 
transmission service will not hasten or improve service and instead merely reduce transmission 
charges for large loads at the expense of other customers.  Requiring new transmission services 
for “flexible large loads” or other large load customers will not resolve any actual inadequacy in 
 
7  
Id. 
8  
Id. at 87 (citing PJM Interconnection, L.L.C., 193 FERC ¶ 61,217 (2025) (“December 18 Co-Located Load 
Order”)).  This request for rehearing refers to the proceedings addressed by the December 18 Co-Located Load 
Order (Docket Nos. EL25-49, et al.) as the “PJM Co-Located Load Proceedings.”

3 
 
the PJM Tariff and instead will provide an unreasonable and unduly preferential gift to a favored 
class. 
I. 
Statement of Issues/Specification of Error. 
In accordance with 18 C.F.R. § 385.713(c)(1) and (2), the Exelon and FirstEnergy provide 
the following specification of errors and statement of issues, including citations to representative 
Commission and judicial precedent. 
1. The Burden Under FPA Section 206 Has Not Been Met: The Existing Rate Has 
Not Been Shown to Be Unjust and Unreasonable.  See 16 U.S.C. § 824e(a); Pub. 
Citizen, Inc. v. FERC, 7 F.4th 1177, 1183 (D.C. Cir. 2021) (explaining that “[t]he 
burden of proving” that a rate is unjust or unreasonable is placed on “the party that 
initiated the proceeding”). 
a. There is No Evidence In the Record That Flexible Large Loads or Any 
Other Large Loads Are Unable to Obtain Reliable, Timely, and 
Reasonably Priced Service Using the Existing Network Service 
Construct.  Therefore, the Commission Fails To Satisfy the 
Requirement Under the Administrative Procedure Act (“APA”) That 
Its Decision Be Supported With Substantial Evidence. 
i. The APA requires the Commission to “examine the relevant 
data and articulate a satisfactory explanation for its action 
including a ‘rational connection between the facts found and the 
choice made,’” and to base its decision on substantial evidence; 
because FERC has failed to do so, its decision is arbitrary and 
capricious.  Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. 
Co. (“State Farm”), 463 U.S. 29, 43 (1983) (citation omitted); see 
Fla. Gas Transmission Co. v. FERC (“Florida Gas”), 604 F.3d 636, 
639 (D.C. Cir. 2010) (“[T]he Commission ‘must be able to 
demonstrate that it has made a reasoned decision based upon 
substantial evidence in the record.’”) (citation omitted); Consol. 
Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229 (1938) (explaining 
that substantial evidence means “more than a mere scintilla”); see 
also 5 U.S.C. § 706. 
ii. The PJM Tariff provides two transmission service options 
(Network Integration Transmission Service and Point-to-Point 
Transmission Service) and includes provisions to explain how 
those services work and how Network Customers will be served.  
See PJM Tariff at §§ 31.1, 31.2, 31.3, 31.6 and 32; see also generally 
PJM Tariff , OATT Definitions.

4 
 
iii. To the extent that parties have argued they are unable to 
interconnect or are experiencing delays, that is false and any 
delay is of their own making.  See, e.g., Exelon Dec. 8, 2025 
Comments at 3-4; Complaint Requesting Fast Track Processing of 
Constellation Energy Generation, LLC, Docket No. EL25-20, at Ex. 
5 Attach 1 (providing Exelon’s Nov. 12, 2024 Letter).  FERC 
arbitrarily and capriciously disregarded evidence that Network 
Service under the current tariff is feasible and has been used for 
co-location arrangements.  Compare PJM Interconnection, L.L.C., 
189 FERC ¶ 61,078 (2024) and PJM Interconnection, L.L.C., 
Docket No. ER24-2172-000, Application Attach. A, Amended ISA, 
at Schedule F, Part F.4 (June 1, 2024), with Press Release, Talen 
Energy, Talen Energy Expands Nuclear Energy Relationship with 
Amazon 
(June 
11, 
2025), 
https://ir.talenenergy.com/news-
releases/news-release-details/talen-energy-expands-nuclear-
energy-relationship-amazon.  See also Exelon Dec. 8, 2025 
Comments at 6. 
iv. Ignoring data in the record regarding the ability of large loads 
to interconnect to the transmission system violates the APA and 
renders FERC’s decision arbitrary and capricious.  See State 
Farm, 463 U.S. at 43. 
v. There is no evidence in the record that the cost of Network 
Service adversely impacts flexible large loads or any other large 
loads.  Nor is there evidence to support that existing Network 
Service imposes unnecessary upgrades on all customers.  Nor is 
there evidence that new forms of transmission service will allow 
for faster interconnection.  See Florida Gas, 604 F.3d at 639 
(“[T]he Commission ‘must be able to demonstrate that it has made 
a reasoned decision based upon substantial evidence in the 
record.’”) (citation omitted); Consol. Edison Co. of N.Y., 305 
U.S. at 229 (explaining that substantial evidence means “more than 
a mere scintilla”); see also 5 U.S.C. § 706. 
vi. The Commission has not met its burden under FPA section 206 
because it acknowledges that the existing transmission services 
remain just and reasonable options.  See June 18, 2026 Order, 195 
FERC ¶ 61,209 at P 195 (finding Network Service charged on a 
gross demand basis to be “one just and reasonable transmission 
service option”). 
b. The Commission Did Not Engage in Reasoned Decision Making 
Because It Did Not Explain its Departure from FERC Precedent 
Regarding the Reasonableness of the Existing Network Service.  See 
F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009) (“[T]he 
requirement that an agency provide reasoned explanation for its action

5 
 
would ordinarily demand that it display awareness that it is changing 
position.  An agency may not, for example, depart from a prior policy sub 
silentio or simply disregard rules that are still on the books.”); New England 
Power Generators Ass’n v. FERC, 881 F.3d 202, 211 (D.C. Cir. 2018) 
(“Although case-by-case adjudication sometimes results in decisions that 
seem at odds but can be distinguished on their facts, it is the agency’s 
responsibility to provide a reasoned explanation of why those facts 
matter.”); W. Deptford Energy, LLC v. FERC, 766 F.3d 10, 20 (D.C. Cir. 
2014) (“It is textbook administrative law that an agency must ‘provide[ ] a 
reasoned explanation for departing from precedent or treating similar 
situations differently,’ and Commission cases are no exception.”) (citations 
omitted); Cal. Pub. Utils. Comm’n v. FERC, 879 F.3d 966, 977 (9th Cir. 
2018) (“FERC departed from this policy without acknowledgment or 
explanation.  This departure was arbitrary and capricious.”); Sw. Airlines 
Co. v. FERC, 926 F.3d 851, 856 (D.C. Cir. 2019) (“‘A full and rational 
explanation’ becomes ‘especially important’ when, as here, an agency 
elects to ‘shift [its] policy’ or ‘depart[ ] from its typical manner of’ 
administering a program. . . . [FERC] must at least ‘acknowledge’ its 
seemingly inconsistent precedents and either offer a reason ‘to distinguish 
them’ or ‘explain its apparent rejection of their approach’ . . . . But however 
the agency justifies its new position, what it may not do is ‘gloss[ ] over or 
swerve[ ] from prior precedents without discussion.’”) (most alterations in 
original) (citations omitted); see also 16 U.S.C. § 824d(b) (prohibiting a 
public utility from making or granting an “undue preference or advantage” 
or from maintaining “any unreasonable difference in rates, charges, service, 
facilities, or in any other respect, . . . as between classes of service”); 
TransCanada Power Mktg. Ltd. v. FERC, 811 F.3d 1, 12–13 (D.C. Cir. 
2015) (remanding because FERC did not adequately explain its position). 
i. The Commission has a long-standing policy of rejecting 
attempts by network transmission customers to avoid paying 
their load ratio share of system cost.  See, e.g., Nat’l R.R. 
Passenger Corp. v. PPL Elec. Utils. Corp., 171 FERC ¶ 61,237 at 
PP 40–41, denying clarification & addressing arguments raised on 
reh’g, 173 FERC ¶ 61,043 at PP 13–14 (2020); see Promoting 
Wholesale Competition Through Open Access Non-Discriminatory 
Transmission Services by Public Utilities; Recovery of Stranded 
Costs by Public Utilities and Transmitting Utilities, Order No. 888-
A, FERC Stats. & Regs. ¶ 31,048, 62 Fed. Reg. 12,274, 12,324 
(Mar. 14, 1997), order on reh’g, Order No. 888-B, 81 FERC ¶ 
61,248 (1997), order on reh’g, Order No. 888-C, 82 FERC ¶ 61,046 
(1998), aff’d in relevant part sub nom. Transmission Access Pol’y 
Study Grp. v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d sub nom. 
New York v. FERC, 535 U.S. 1 (2002); see also, e.g., Fla. Mun. 
Power Auth. v. FERC, 411 F.3d 287 (D.C. Cir. 2005); Fla. Power 
& Light Co., 113 FERC ¶ 61,290 (2005), aff’d on rehearing, 116 
FERC ¶ 61,012 (2006), aff’d on appeal sub nom. Fla. Mun. Power

6 
 
Agency v. FERC, 264 F. App’x 4 (D.C. Cir. 2008) (per curiam); 
Idaho Power Co., 106 FERC ¶ 61,329 (2004); Ameren Servs. Co. v. 
Prairieland Energy Inc., 131 FERC ¶ 61,125 (2010); Ariz. Pub. 
Serv. Co., 151 FERC ¶ 61,191 (2015); Preventing Undue 
Discrimination and Preference in Transmission Service, Order No. 
890, 119 FERC ¶ 61,119 (“Order No. 890”), order on reh’g, Order 
No. 890-A, 121 FERC ¶ 61,297 (2007), order on reh’g, Order No. 
890-B, 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-
C, 126 FERC ¶ 61,228, order on clarification, Order No. 890-D, 
129 FERC ¶ 61,126 (2009). 
c. Flexible Large Loads and Other Large Loads Rely Upon the Entire 
Embedded Transmission System to Serve Their Full Gross Load.  
Therefore, FERC’s Decision is Arbitrary and Capricious Because the 
Embedded Transmission System Costs Should Be Charged For Those 
Transmission Services.  See Decl. of David Weaver, PE, Attachment 1 to 
Exelon Comments, Docket No. EL25-20 (Dec. 12, 2024); see also PJM 
Interconnection, L.L.C., Docket No. EL25-20-000, Indicated Transmission 
Owners June 3, 2025 Answer, Declaration of Danielle S. Powers, at P 29. 
i. The Commission’s failure to consider the benefits of grid 
interconnection makes the Show Cause Order arbitrary and 
capricious.  See State Farm, 463 U.S. at 43. 
2. The Burden Has Not Been Met Under FPA Section 206: FERC’s Proposed 
Replacement Rate is Not Just and Reasonable.  See 16 U.S.C. § 824e(a); 
Advanced Energy Mgmt. All. v. FERC, 860 F.3d 656, 663 (D.C. Cir. 2017) (“If the 
Commission finds that a rate is ‘unjust, unreasonable, unduly discriminatory or 
preferential, the Commission shall determine the just and reasonable rate . . . and 
shall fix the same by order,’” and “[i]t is the Commission’s job—not the 
petitioner’s—to find a just and reasonable rate.”) (alterations in original) (citation 
omitted); Emera Maine v. FERC, 854 F.3d 9, 21 (D.C. Cir. 2017); Atl. City Elec. 
Co. v. FERC, 295 F.3d 1, 10 (D.C. Cir. 2002).  The Show Cause Order failed to 
address the fact that reliability is relevant to the inquiry of whether a rate is 
just and reasonable.  See Constellation Mystic Power, LLC v. FERC, 45 F.4th 
1028, 1035 (D.C. Cir. 2022) (“The reasonableness of a rate is assessed in light of 
the FPA’s goals of promoting reliable service at reasonable rates and developing 
plentiful energy supplies.”); NAACP v. FPC, 425 U.S. 662, 669–70 (1976) (“[T]he 
principal purpose of [the FPA is] to encourage the orderly development of plentiful 
supplies of electricity . . . at reasonable prices.”). 
a. Allowing Special Treatment For Flexible Large Loads Violates the 
FPA’s Requirement That There Be No Undue Preference Or 
Unreasonable Difference In Rates Between Classes of Service.  See 16 
U.S.C. § 824d(b).

7 
 
i. To the extent that the Commission suggests that the 
transmission provider may move forward with interconnection 
before studies are completed, such course of action would 
jeopardize reliability and would be in tension with NERC 
reliability standards.  See, e.g., See NERC, FAC-002-4 – Facility 
Interconnection 
Studies 
(2022), https://www.nerc.com/globalassets/standards/reliability-
standards/fac/fac-002-4.pdf; NERC, 181 FERC ¶ 61,126 (2022) 
(approving FAC-002-4). 
ii. There is no lawful basis to require tariff changes to impose new 
forms of service that give certain large load customers a reduced 
share of embedded costs compared to all other users when they 
receive the same benefits.  See Coal. of MISO Transmission 
Customers v. FERC, 45 F.4th 1004, 1009 (D.C. Cir. 2022). 
b. The Commission’s Emphasis on Control Technologies and Protection 
Systems Is In Tension With the Commission’s Open Access Policies and 
Therefore Is Arbitrary and Capricious.  The Commission Also Erred 
In Failing to Account for the Fact that Protective Systems Can and 
Have Failed.  See NERC, Characteristics and Risks of Emerging Large 
Loads: Large Loads Task Force White Paper, at 13 (July 2025), 
https://www.nerc.com/globalassets/who-we-are/standing-
committees/rstc/whitepaper-characteristics-and-risks-of-emerging-large-
loads.pdf. 
i. The Commission erred in proposing a policy in tension with its 
open access policies.  See Promoting Wholesale Competition 
Through Open Access Non-Discriminatory Transmission Services 
by Public Utilities; Recovery of Stranded Costs by Public Utilities 
and Transmitting Utilities, Order No. 888-A, FERC Stats. & Regs. 
¶ 31,048, 62 Fed. Reg. 12,274 (Mar. 14, 1997), order on reh’g, 
Order No. 888-B, 81 FERC ¶ 61,248 (1997), order on reh’g, Order 
No. 888-C, 82 FERC ¶ 61,046 (1998), aff’d in relevant part sub 
nom. Transmission Access Pol’y Study Grp. v. FERC, 225 F.3d 667 
(D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1 
(2002). 
c. The Show Cause Order is Arbitrary and Capricious in Abandoning the 
Main Construct of Service to Load, Which is That Customers Share In 
the Embedded Costs of the System.  See Florida Gas, 604 F.3d at 639 
(“[T]he Commission ‘must be able to demonstrate that it has made a 
reasoned decision based upon substantial evidence in the record.’”) (citation 
omitted); Consol. Edison Co. of N.Y., 305 U.S. at 229 (explaining that 
substantial evidence means “more than a mere scintilla”); see also 5 U.S.C. 
§ 706.

8 
 
i. FERC’s order is arbitrary and capricious in abandoning the 
main construct of service to load, which is that customers share 
in the embedded costs of the system.  See State Farm, 463 U.S. at 
43; Coal. of MISO Transmission Customers, 45 F.4th at 1009 
(quoting S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 53 (D.C. Cir. 
2014) (per curiam)). 
ii. The Show Cause Order departs from traditional cost causation 
principles and fails to explain or justify its departure.  See, e.g., 
Nat’l R.R. Passenger Corp. v. PPL Elec. Utils. Corp., 173 FERC ¶ 
61,043, at PP 13–14 (2020); see also Fox Television Stations, Inc., 
556 U.S. at 515 (“[T]he requirement that an agency provide 
reasoned explanation for its action would ordinarily demand that it 
display awareness that it is changing position.  An agency may not, 
for example, depart from a prior policy sub silentio or simply 
disregard rules that are still on the books.”) (citation omitted). 
iii. The Commission provides no record evidence nor a reasoned 
explanation for why flexible large load should not be charged 
like other load, i.e., with the upgrade cost recovered as part of 
the transmission rates charged to all customers.  Transmission 
owners are permitted to earn a reasonable return on the 
investments necessary to construct, operate, and maintain 
transmission facilities, including those network upgrades 
required to serve co-located load.  See, e.g., Fed. Power Comm’n 
v. Hope Nat. Gas Co., 320 U.S. 591 (1944); Bluefield Water Works 
& Improvement Co. v. Pub. Service Comm’n of W. Va., 262 U.S. 
679 (1923). 
d. There is No Evidence that the New Services That the Commission 
Proposes to Extend to Flexible Large Load Will Promote Efficiency or 
Change Siting. 
i. The Commission’s decision to require options for contract 
demand service (“CD Service”) does not change how the study 
process or the regional planning process should work.  See PJM 
Tariff §§  31.1-31.3, 31.6, 32. 
e. The 
Commission’s 
Disregard 
of 
Reliability 
Considerations 
Underscores that its Proposed Replacement Rate is Not Just and 
Reasonable.  See Constellation Mystic Power, LLC, 45 F.4th at 1035 (“The 
reasonableness of a rate is assessed in light of the FPA’s goals of promoting 
reliable service at reasonable rates and developing plentiful energy 
supplies.”); NAACP v. FPC, 425 U.S. at 669–70 (“[T]he principal purpose 
of [the FPA is] to encourage the orderly development of plentiful supplies 
of electricity . . . at reasonable prices.”).

9 
 
3. FERC Exceeded Its Jurisdiction.  See 16 U.S.C. § 824(b). 
a. FERC’s Proposed Replacement Rate Violates the Major Questions 
Doctrine.  See West Virginia v. EPA, 597 U.S. 697, 723 (2022); Whitman 
v. Am. Trucking Ass’ns, 531 U.S. 457, 468 (2001) (“Congress, we have held, 
does not alter the fundamental details of a regulatory scheme in vague terms 
or ancillary provisions—it does not, one might say, hide elephants in 
mouseholes.”); see also Midship Pipeline Co., v. FERC, 45 F.4th 867, 877 
(5th Cir. 2022) (vacating part of the Commission’s order and remanding the 
remainder because “[t]he FERC’s interpretation of the NGA to give the 
agency power to determine ‘the reasonable cost’ of remediation efforts 
‘change[d] the plot line’ of its enabling legislation, and was therefore 
erroneous” and “[t]he FERC lacks such authority under the NGA, and it 
likewise lacked authority to order an ALJ to make such a determination 
indirectly”) (quoting West Virginia v. EPA, 597 U.S. at 723); see Atl. City 
Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) (As a federal agency, 
“FERC is a ‘creature of statute,’ having ‘no constitutional or common law 
existence or authority, but only those authorities conferred upon it by 
Congress. Thus, if there is no statute conferring authority, FERC has 
none.”) (citation omitted). 
 
b. The Commission’s Proposed Approach Would Infringe on State Retail 
Authority. 
i. The Commission’s new approach would infringe on state 
jurisdiction and is distinguishable from wholesale demand 
response programs.  See 16 U.S.C. § 824(b); see also FERC v. 
Elec. Power Supply Ass’n, 577 U.S. 260, 270, 278–79 (2016); 
FERC, Energy Primer: A Handbook for Energy Market Basics, at 
41 (Jan. 17, 2024), https://www.ferc.gov/news-events/news/ferc-
staff-issues-2024-energy-primer-handbook-energy-market-basics. 
ii. The Commission is unable to do indirectly what it cannot do 
directly.  Cf. Nat’l Fuel Gas Supply Corp. v. FERC, 909 
F.2d 1519, 1522 (D.C. Cir. 1990) (“once want of power to do this 
directly were established, the existence of power to achieve the same 
end indirectly through the conditioning power might well be 
doubted” (quoting Sunray Mid-Continent Oil Co. v. FPC, 364 
U.S. 137, 152 (1960) and citing Richmond Power & Light v. 
FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (the Commission may 
not achieve indirectly through conditioning power of Federal Power 
Act what it is otherwise prohibited from achieving directly)); Am. 
Gas Ass’n v. FERC, 912 F.2d 1496, 1510 (D.C. Cir. 1990) (“[T]he 
Commission may not use its § 7 conditioning power to do 
indirectly . . . things that it cannot do at all.”); see also FERC v. Elec. 
Power Supply Ass’n, 577 U.S. at 288 (“The FPA ‘leaves no room 
either for direct state regulation of the prices of interstate

10 
 
wholesales’ or for regulation that ‘would indirectly achieve the same 
result.’”) (citation omitted). 
II. 
The Burden Under FPA Section 206 Has Not Been Met: The Existing Rate Has 
Not Been Shown To Be Unjust And Unreasonable. 
 
The FPA requires that the rates and charges of a public utility “in connection with the 
transmission or sale of electric energy subject to the jurisdiction of the Commission, and all rules 
and regulations affecting or pertaining to such rates or charges shall be just and reasonable.”9  
“[A]ny such rate or charge that is not just and reasonable is . . . unlawful.”10  Under FPA section 
206, the Commission may, by its own motion or upon complaint from a third party, remedy any 
“rate [or] charge” or “any rule, regulation, practice, or contract affecting such rate [or] charge” 
found to be “unjust [or] unreasonable.”11  “The burden of proving an unjust or unreasonable rate 
rests with the party that initiated the proceeding—that is, the Commission or the third-party 
complainant.”12  In other words, a respondent to a FPA section 206 complaint is not required to 
make an affirmative showing that its existing rate is still just and reasonable.   
For the reasons below, neither FERC nor any other party have met the burden of 
demonstrating that PJM’s current rate is unjust and unreasonable so as to require new forms of 
transmission service for flexible large load or other large load customers.   
A. There is No Evidence In The Record That Flexible Large Loads or Other 
Large Loads Are Unable to Obtain Reliable, Timely, And Reasonably Priced 
Service Using The Existing Network Service Construct.  Therefore, the 
Commission Fails To Satisfy The Requirement Under The APA That Its 
Findings Be Supported With Substantial Evidence. 
 
 
9  
16 U.S.C. § 824d(a). 
10  Id. 
11  Id. § 824e(a). 
12  Pub. Citizen, Inc. v. FERC, 7 F.4th 1177, 1183 (D.C. Cir. 2021).

11 
 
Under the APA, the Commission “must examine the relevant data and articulate a 
satisfactory explanation for its action including a ‘rational connection between the facts found and 
the choice made’”13 and must base its decision on substantial evidence in the record.14  Substantial 
evidence means “more than a mere scintilla,” that is, “such relevant evidence as a reasonable mind 
might accept as adequate to support a conclusion.”15  The Commission’s findings in the Show 
Cause Order regarding the need for new transmission services does not meet this standard. 
The totality of the Commission’s reasoning for requiring that new forms of transmission 
service be offered to flexible large loads is set forth in Paragraphs 85-87 of the Show Cause Order, 
in which the Commission simply states that there is evidence that flexible large loads can “quickly 
and verifiably adjust their consumption in response to system conditions and price signals” and 
can “potentially defer or reduce the need for Network Upgrades, among other benefits.”16  
From here, the Commission concludes that the existing PJM Tariff may be unjust and 
unreasonable because it does not offer flexible large loads the same transmission services as 
required by the Commission in the December 18 Co-Located Load Order.  However, as in that 
Order, the Commission’s finding in the Show Cause Order is unsupported by evidence that the 
current tariff service options are inadequate.  Under the current PJM Tariff, there are two 
transmission service options: (1) Network Integration Transmission Service (“NITS” or “Network 
 
13  State Farm, 463 U.S. at 43 (citation omitted). 
14  See, e.g., Fla. Gas Transmission Co. v. FERC, 604 F.3d 636, 639 (D.C. Cir. 2010) (“[T]he Commission ‘must be 
able to demonstrate that it has made a reasoned decision based upon substantial evidence in the record.’” (quoting 
Pac. Gas & Elec. Co. v. FERC, 373 F.3d 1315, 1319 (D.C. Cir. 2004))); see also 5 U.S.C. § 706.  
15  Consol. Edison Co. of N.Y., 305 U.S. at 229. 
16  Show Cause Order at P 85.

12 
 
Service”);17 and (2) Point-to-Point Transmission Service.18  There is no inability to determine how 
to serve load in PJM; the PJM Tariff already has provisions explaining how Network Service works 
and how loads of Network Customers will be served.  The starting point is Section 31.1 of the PJM 
Tariff, which (mirroring the Commission’s own pro forma Open Access Transmission Tariff 
(“OATT”) requires that Network Loads are to be specified in the Service Agreement.  The PJM 
Tariff sets forth in Sections 31.2 and 31.3 the procedures for identifying new Network Loads that 
will be served by the Network Customer.  If, and to the extent that, study is required of the request, 
the requirements of that study are spelled out in Section 32 of the PJM Tariff.  And, in recognition 
of the fact that loads change after commencement of service, Section 31.6 provides the process by 
which to report on changing loads.  Further, there are application procedures for studying any new 
service in Section 29 of the PJM Tariff, which require specification of all aspects of the requested 
service, including capabilities and operating restrictions on all proposed network resources.  These 
tariff provisions have been in place for decades, and already require that service requests should 
be assessed and analyzed based on their particular features; thus they already provide mechanisms 
for factoring in and assessing the individualized characteristics of the proposed service.   
The Show Cause Order does not even begin to explain how the existing Network Service 
construct and existing PJM Tariff rules and precedent fail to provide a mechanism for loads of all 
sorts, including flexible large loads.  The Commission states that Eligible Customers taking 
 
17  Under the PJM Tariff, “Network Transmission Service” “mean[s] transmission service provided pursuant to the 
rates, terms and conditions set forth in Tariff, Part III, or transmission service comparable to such service that is 
provided to a Load Serving Entity that is also a Transmission Owner.”  PJM Tariff, OATT Definitions – L – M – 
N, at 13-14.  The PJM Tariff defines “Network Integration Transmission Service” as “the transmission service 
provided under Tariff, Part III.  There are two types of firm Network Integration Transmission Service:  Regional 
Network Integration Transmission Service and firm Cross-Border Network Integration Transmission Service.  
Non-firm Network Integration Transmission Service includes Secondary Service.”  Id. at 12–13. 
18  Under the PJM Tariff, “Point-To-Point Transmission Service” “mean[s] the reservation and transmission of 
capacity and energy on either a firm or non-firm basis from the Point(s) of Receipt to the Point(s) of Delivery 
under Tariff, Part II.”  Id., OATT Definitions – O – P – Q, at 10.

13 
 
transmission service on behalf of Eligible Load should be allowed to “choose a transmission 
service that aligns with their use of the transmission system and therefore aligns the charges for 
service with the benefits received.”19  However, the Commission never addresses, much less 
explains, how the existing NITS and Point-to-Point options provide inadequate optionality to 
Eligible Customers taking service on behalf of large loads, relative to existing load customers in 
PJM.  Large load customers have been served under open access tariffs for decades and there is 
simply no evidence offered in the order that such customers are forced to operate inefficiently on 
account of the existing OATT transmission service offerings.  Indeed, as discussed below, the 
Commission has consistently rejected arguments that different ratemaking should be applied even 
where there are limits to the amount of transmission system use.20 
The Commission in the Show Cause Order held that NITS and Point-to-Point service 
options remain just and reasonable.21  But nevertheless, the Commission preliminarily finds that 
flexible large load customers should be entitled to more new options.22  In short, the Commission 
asserts that the PJM Tariff may be unjust and unreasonable without these new service options, but 
provides no evidence to support the conclusion that the existing service options fail to address the 
needs of flexible large loads.  That is not a permissible basis to make findings or take action under 
FPA section 206.   
B. The Commission Did Not Engage in Reasoned Decision Making Because It Did 
Not Explain its Departure from FERC Precedent or Refute that, Because the 
Existing PJM Tariff Provides Service on the Same Basis for All Customers, the 
Existing PJM Tariff Does Not Grant an Undue Preference.   
 
19  Show Cause Order at P 86. 
20  See Fla. Power & Light Co., 113 FERC ¶ 61,290 (2005), aff’d on rehearing, 116 FERC ¶ 61,012 (2006), aff’d on 
appeal sub nom. Fla. Mun. Power Agency v. FERC, 264 F. App’x 4 (D.C. Cir. 2008) (per curiam). 
21  Show Cause Order at P 86. 
22  June 18, 2026 Order at P 68.

14 
 
 
As an initial matter, picking and choosing customers to receive preferential rate treatment 
runs contrary to the FPA’s requirement that “[n]o public utility shall, with respect to any 
transmission or sale subject to [FERC’s] jurisdiction . . . (1) make or grant any undue preference 
or advantage to any person or subject any person to any undue prejudice or disadvantage, or (2) 
maintain any unreasonable difference in rates, charges, service, facilities, or in any other respect, 
either as between localities or as between classes of service.”23   
The Commission has a long-standing policy of rejecting attempts by network transmission 
customers to avoid paying their load ratio share of system cost.  As the Commission recognized in 
the December 18 Co-Located Load Order, citing the Amtrak case, the Commission “has rejected 
cost causation arguments made by network customers that sought to lower their load ratio share 
based on actual use of the transmission system.”24  This policy has long persisted for very good 
reason.  The “assessment of [Network Integration Transmission Service] is not based on actual use 
over a particular transmission path, but rather based on the network customer’s right to use the 
entire system” and its effects on that system.25   
The Amtrak case, which rejected an attempt by a network customer in PJM to pay for less 
than its full gross load, was not an outlier, but instead reflected decades of Commission precedent, 
rejecting challenges to uniform application of the rule that Network Service would be based on the 
entire gross load of the network customer, regardless of arguments (such as those advanced by 
 
23  16 U.S.C. § 824d(b). 
24  December 18 Co-Located Load Order at P 196 & n.412 (citing Nat’l R.R. Passenger Corp. v. PPL Elec. Utils. 
Corp, 171 FERC ¶ 61,237, at P 41 (2020), denying clarification and addressing reh’g, Nat’l R.R. Passenger Corp. 
v. PPL Elec. Utils. Corp., 173 FERC ¶ 61,043 (2020) (“Amtrak”); PJM Interconnection, L.L.C., 169 FERC ¶ 
61,041, at P 60 (2019)). 
25  Nat’l R.R. Passenger Corp. v. PPL Elec. Utils. Corp., 173 FERC ¶ 61,043, at PP 13–14 (2020).

15 
 
Amtrak) that the customer could purportedly limit use of the system.  For example, this exact issue 
was addressed in Order No. 888-A and resulting appeals.  In Order No. 888-A, the Commission 
held that customers cannot “split” their load at a delivery point—if some of the load takes Network 
Service, all of the load must be designated for Network Service: 
The concept of allowing a “split system” or splitting a discrete load 
is antithetical to the concept of network service.  A request for 
network service is a request for the integration of a customer’s 
resources and loads.  Quite simply, a load at a discrete point of 
delivery cannot be partially integrated—it is either fully integrated 
or not integrated.  Furthermore, such a split system creates the 
potential for a customer to “game the system” thereby evading some 
or all of its load-ratio cost responsibility for network services.26 
That ruling was expressly upheld on appeal by the U.S Court of Appeals for the District of 
Columbia Circuit (“D.C. Circuit”), which accepted the Commission’s reasoning, finding that 
objections were “not well-taken.”27   
The issue was likewise addressed in a long series of cases involving Florida Municipal 
Power Agency (“FMPA”) and transmission service it was taking from Florida Power and Light.  
As recounted by the D.C. Circuit in 2005, years of litigation in that case involved the attempt by 
FMPA to avoid paying for Network Service based on its overall gross load, with the Commission 
consistently rejecting all arguments by FMPA against such load splitting.28  In the 2005 decision, 
the court remanded one argument by FMPA, which is that physical constraints on the transmission 
system made it physically impossible for its entire load to be served by the Florida Power and 
 
26  Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Services by Public 
Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Order No. 888-A, 78 FERC 
¶ 61,220 (1997), order on reh’g, Order No. 888-B, 81 FERC ¶ 61,248 (1997), order on reh’g, Order No. 888-C, 
82 FERC ¶ 61,046 (1998), aff’d in relevant part sub nom. Transmission Access Pol’y Study Grp. v. FERC, 225 
F.3d 667 (D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1 (2002). 
27  Transmission Access Pol’y Study Grp., 225 F.3d at 726. 
28  Fla. Mun. Power Auth. v. FERC, 411 F.3d 287 (D.C. Cir. 2005) (describing history of case back to 1993).

16 
 
Light system.29  On remand, the Commission found that even in the case of physical impossibility 
of serving the entire load, the gross load construct was most appropriate, rejecting arguments that 
a network customer should pay for any less than its entire system load.30 
The Commission has consistently followed this precedent.31  For example, in Idaho Power, 
the Commission rejected Bonneville Power Administration’s (“BPA”) attempt to remove certain 
of its load from its load ratio share.32  The Commission explained that, contrary to Order No. 888, 
“BPA’s proposal would essentially leave the behind the meter loads . . . as part of BPA’s network 
load served by Idaho Power’s transmission service, but eliminate the requirement that such loads 
be metered, i.e., included in BPA’s load ratio share, because Idaho Power’s transmission service 
may only be needed in rare instances.”33  Similarly, in Order No. 890,34 commenters complained 
that assigning transmission-related costs to customers that reduce their use of the transmission 
provider’s system to serve load is inconsistent with the Commission’s cost-causation principles. 
The Commission rejected such arguments, stating that its existing policy already provides 
 
29  Id. at 292 (remanding because “FERC . . . failed to explain why network customers should be charged by the 
transmission provider for network service that the provider is physically constrained from offering and, relatedly, 
why physical impossibility should not be recognized as an exception to the general rule against permitting partial 
load ratio pricing for network customers”). 
30  Fla. Power & Light, 113 FERC  ¶ 61,290 (2005), aff’d on rehearing, 116 FERC ¶ 61,012 (2006), aff’d on appeal, 
264 F. App’x 4 (D.C. Cir. 2008). 
31  See, e.g., Idaho Power Co., 106 FERC ¶ 61,329 (2004) (“Idaho Power”); Ameren Servs. Co. v. Prairieland Energy 
Inc., 131 FERC ¶ 61,125 (2010) (finding that network customer failed to comply with the tariff by not designating 
its total load as network load); Ariz. Pub. Serv. Co., 151 FERC ¶ 61,191 (2015) (finding that a network customer's 
request to designate less than its entire load as network load violated both the transmission provider’s OATT and 
long standing Commission policy, which require network customers to designate their entire load as network load 
to receive network service). 
32  Idaho Power, 106 FERC ¶ 61,329 at P 14. 
33  Id. 
34  Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, 119 FERC ¶ 61,119 
(“Order No. 890”), order on reh'g, Order No. 890-A, 121 FERC ¶ 61,297 (2007), order on reh'g, Order No. 890-
B, 123 FERC ¶ 61,299 (2008), order on reh'g, Order No. 890-C, 126 FERC ¶ 61,228, order on clarification, 
Order No. 890-D, 129 FERC ¶ 61,126 (2009).

17 
 
customers with the opportunity to reduce network service costs to the extent a customer is not 
relying on the transmission system to meet its energy needs (i.e., by taking point-to-point 
transmission service instead of network service).35 
The Show Cause Order’s preliminary finding that flexible large load should be entitled to 
new transmission services based on less than their entire load departs from these decades of 
precedent and, contrary to the APA, has failed adequately to explain such departure.36  The 
Commission’s prior determinations of the fairness of load ratio allocation (based on gross load—
even in the case of purported physical impossibility of service to full load) of embedded costs hold 
true.  There is no reasoned basis for these distinctions. 
The Declaration of Danielle S. Powers (“Powers Declaration”), submitted by the Indicated 
Transmission Owners in the PJM Co-Located Load Proceedings, explains why the assessment of 
Network Service is not based on actual use over specific transmission paths.37  All customers have 
different usage of the grid.  Many customers’ reliance upon the grid varies during different times 
of the year and can be distinguished from other customers’ uses.  These customers may have 
distinct load shapes or load factors, but they pay the same rate for Network Service as do high load 
factor customers.  Such customers pay the full Network Service rate, but because Network Service 
charges are allocated based on contribution to the system coincident peak, some customer charges 
 
35  See Order No. 890, 119 FERC ¶ 61,119. 
36  See  Fox Television Stations, Inc., 556 U.S. at 515 (“the requirement that an agency provide reasoned explanation 
for its action would ordinarily demand that it display awareness that it is changing position. An agency may not, 
for example, depart from a prior policy sub silentio or simply disregard rules that are still on the books.”).  At 
paragraph 211 of the June 18, 2026 Order, the Commission says that the current load-splitting proposal is different 
from prior situations because PJM need only plan for the specified contract demand rather than the full load, but 
this argument is not a difference from prior cases at all, such as the FPL case where there was no contention that 
FPL was redesigning its system to serve the full load of FMPA, or the Amtrak case where the entire premise of 
the argument was that Amtrak made only rare and limited use of the system. 
37  See PJM Interconnection, L.L.C., Docket No. EL25-20-000, Indicated TOs June 3, 2025 Answer, Declaration of 
Danielle S. Powers at P 29.

18 
 
may be lower on average than others if their operations occur disproportionately outside of the 
peak hours.  No additional rate discount is necessary or given.  Up until now, the Commission has 
consistently applied this approach of not carving out special rates for different customer classes 
for good reason—every customer can attempt to make arguments why their usage should result in 
a decrease of their share of the embedded costs of the transmission system.  Utilities have an 
obligation to serve load and that load needs to be able to call on service regardless of whether they 
actually utilize the system to the maximum allowable extent since weather and other factors are 
unpredictable.  Hence, actual usage does not reflect the benefit.  Entertaining such arguments 
would frustrate the rate design that the Commission has applied across the board and that was put 
in place following Order No. 888.38 
The existing PJM Tariff effectuates the principle that those that benefit from the 
transmission system should contribute on a load ratio basis to the embedded costs of the system 
and is consistent with the pro forma OATT in providing for Network Service and Point-to-Point 
Service, an important component of Order No. 888.39  Under the APA, the Commission must 
explain why circumstances have changed such that this proceeding requires departure from past 
efforts by customers to pay for less than gross load.40  The Commission made no serious attempt 
 
38  See, e.g., Recovery of Stranded Costs by Pub. Utils. and Transmitting Utils., Order No. 888, 75 FERC ¶ 61,080 
(1996), order on reh’g, Order No. 888-A, 78 FERC ¶ 61,220, order on reh’g, Order No. 888-B, 81 FERC ¶ 61,248 
(1997), order on reh’g, Order No. 888-C, 82 FERC ¶ 61,046 (1998), aff’d in relevant part sub nom. Transmission 
Access Pol’y Study Grp. v. FERC, 225 F.3d 667 (D.C. Cir. 2000) (TAPS), aff’d sub nom. New York v. FERC, 535 
U.S. 1 (2002). 
39  See, e.g., id. 
40  See Fox Television Stations, Inc., 556 U.S. at 515 (“the requirement that an agency provide reasoned explanation 
for its action would ordinarily demand that it display awareness that it is changing position.  An agency may not, 
for example, depart from a prior policy sub silentio or simply disregard rules that are still on the books.”); see 
also Constellation Mystic Power, LLC 45 F.4th at 1057 (finding the Commission’s decision to be arbitrary and 
capricious and that “the Commission’s ‘failure to provide an intelligible explanation . . . amounts to a failure to 
engage in reasoned decisionmaking’”) (citation omitted); New England Power Generators Ass’n, Inc. v. FERC, 
881 F.3d 202, 211 (D.C. Cir. 2018) (“Although case-by-case adjudication sometimes results in decisions that 
seem at odds but can be distinguished on their facts, it is the agency’s responsibility to provide a reasoned 
(cont'd)

19 
 
to do so.  Nor has the Commission distinguished why other existing customers will not qualify for 
discounts—many of whom can argue that they impose lesser demand on the grid by some measure.  
That failure to provide explanation renders FERC’s finding arbitrary and capricious and violative 
of the APA.41  Ultimately, this is not reasoned decision making and will create a nightmare as other 
customers in PJM and beyond raise a host of similar arguments that their transmission rates should 
be modified based on their allegedly different use of the system, which is a reason why the 
Commission never mandated this in the past.   
C. The Loads Rely Upon The Entire Embedded Transmission System To Serve 
Their Full Gross Load.  Therefore, FERC’s Decision is Arbitrary and 
Capricious Because The Embedded Transmission System Costs Should Be 
Charged For Those Transmission Services. 
Notwithstanding well-established Commission policy and judicial precedent to the 
contrary, the Show Cause Order preliminarily finds that flexible large loads should be entitled to 
a preferential transmission rate.  Not only is this new rate unduly discriminatory (as discussed 
herein), but it is based on a false premise that the combination of transmission system burdens and 
user benefits of flexible loads are so insignificant as to justify the establishment of a lower, 
preferential rate.  The Commission is wrong, with respect to both the actual burdens on the system 
and the benefits to flexible large loads of being interconnected to the grid. 
 
explanation of why those facts matter.” (citing BP Energy Co. v. FERC, 828 F.3d 959, 968 (D.C. Cir. 2016) 
(vacating finding of no undue discrimination where Commission identified differences between two natural-gas 
companies but failed to adequately explain why they provide a rational basis for the difference in treatment))); 
W. Deptford Energy, LLC v. FERC, 766 F.3d 10, 20 (D.C. Cir. 2014) (“It is textbook administrative law that an 
agency must ‘provide[ ] a reasoned explanation for departing from precedent or treating similar situations 
differently,’ . . . and Commission cases are no exception . . . .”) (alteration in original) (citations omitted). 
41  See, e.g., Cal. Pub. Utils. Comm’n, 879 F.3d at 977 (“FERC departed from this policy without acknowledgment 
or explanation. This departure was arbitrary and capricious.”); Sw. Airlines Co., 926 F.3d at 856 (“‘A full and 
rational explanation’ becomes ‘especially important’ when, as here, an agency elects to ‘shift [its] policy’ or 
‘depart[ ] from its typical manner of’ administering a program. . . .  [FERC] must at least ‘acknowledge’ its 
seemingly inconsistent precedents and either offer a reason ‘to distinguish them’ or ‘explain its apparent rejection 
of their approach’ . . . But however the agency justifies its new position, what it may not do is ‘gloss[ ] over or 
swerve[ ] from prior precedents without discussion.’”) (alterations in original) (citation omitted).

20 
 
As for benefits, the Commission has recognized that co-located loads benefit from black 
start and load following service,42 and that such service properly should be charged based on gross 
load.  Flexible large loads are likewise reliant on black start and load following. Load following 
services are supplied from a diverse range of the interconnected generation facilities located 
throughout the system.  These services cannot be provided without use of all the transmission 
system’s resources and personnel.  Moreover, because it is a universal rule that generators cannot 
operate every hour of every year and that unexpected outages can and do occur, transmission 
interconnections provide an avenue for such loads to readily acquire back-up power when co-
located generation facilities are not available.   
In addition, in assessing flexible large loads, the Commission fails to consider the many 
advantages to such loads when they connect to the transmission system, regardless of whether they 
are able to limit their demand under certain circumstances.  These advantages become apparent 
when one compares islanded projects to similar projects that are interconnected to the transmission 
grid.  Islanded projects require extensive back-up generation to assure reliable sources of power.  
It is very difficult and expensive to supply islanded generation with black start capabilities or 
instantaneous load following.  All back-up generation on an islanded project will sit idle when not 
needed to serve the islanded load, thereby forgoing significant revenues from selling the surplus 
power into the wholesale market.  These lost opportunity sales revenues alone could likely cover 
the fully embedded costs of Network Service.  Ultimately, islanded generation projects are more 
risky and therefore more difficult to finance.  Grid interconnection is valuable, which is why large 
loads, including those co-located with generation, have not proposed islanded configurations.  In 
preliminarily finding that traditional Network Service without the option of additional services is 
 
42  See December 18 Co-Located Load Order at PP 209, 219.

21 
 
unjust and unreasonable for flexible large load, the Commission considered none of these benefits 
of grid interconnection to such loads.  Failure to consider the benefits of grid interconnection 
makes this finding arbitrary and capricious and unreasoned.43 
III. 
The Commission’s Suggested Replacement Rate Would Not Be Just and 
Reasonable. 
 
Under FPA section 206,44 there are two steps: only after the Commission finds a rate to be 
unjust and unreasonable, may it set a replacement rate.45  Even if the Commission has established 
that the current PJM Tariff is unjust and unreasonable with respect to the transmission services 
available to flexible large load, it has not demonstrated that its proposed replacement rate—
extending the services that it directed in the PJM Co-Located Load Proceeding to flexible large 
load—is just and reasonable.  
A. Allowing Special Treatment For Flexible Large Load Would Violate The 
FPA’s Requirement That There Be No Undue Preference Or Unreasonable 
Difference In Rates Between Classes Of Service.  
As explained above, FPA section 205 prohibits any public utility charging transmission 
rates from “mak[ing] or grant[ing] any undue preference or advantage to any person or subject any 
person to any undue prejudice or disadvantage” or “maintain[ing] any unreasonable difference in 
rates, charges, service, facilities, or in any other respect, either as between localities or as between 
classes of service.”46  Requiring extension of the new transmission services that the Commission 
 
43  See State Farm, 463 U.S. at 43. 
44  16 U.S.C. § 824e(a).  
45  See id; see also Advanced Energy Mgmt. All., 860 F.3d at 663 (“If the Commission finds that a rate is ‘unjust, 
unreasonable, unduly discriminatory or preferential, the Commission shall determine the just and reasonable 
rate … and shall fix the same by order,’” and “[i]t is the Commission’s job—not the petitioner’s—to find a just 
and reasonable rate.”) (alterations in original) (citation omitted); Emera Maine, 854 F.3d at 21; Atl. City Elec. 
Co., 295 F.3d at 10. 
46  16 U.S.C. § 824d(b).

22 
 
has required for Co-Located Load to flexible large load would establish rates that grant an undue 
preference or advantage to such loads, for the same reasons that Exelon and FirstEnergy explained 
in the PJM Co-Located Load Proceedings.   
There already exist mechanisms (such as demand response at the state and federal levels) 
to address when customers can scale back their load or otherwise reduce their withdrawals when 
called upon.  If flexible large loads wish to be compensated for being interruptible, then they should 
rely upon PJM’s demand response rules, or retail rules in the various states, and the Show Cause 
Order fails to explain why those rules are inadequate here.  The point of FPA section 206 is not 
for the Commission to declare what it thinks would be better tariff options—it is to ensure that the 
tariff on file is just and reasonable.  Similarly, the PJM Tariff already has in place provisions to 
provide compensation to those customers that can ease transmission congestion—to the extent that 
a basis for the Commission’s orders is that some uses of the system reduce grid usage thus easing 
congestion, the mechanisms are already there.  The Commission does not consider those existing 
tariff provisions. 
With respect to Interim NITS service, there is no basis for the Commission to require this 
new form of service prior to the completion of necessary network upgrades and studies to ensure 
reliability of the system.  The Commission has effectively conceded it has not yet done adequate 
analysis on this point in the PJM Co-Located Load Proceeding – ruling in Paragraphs 125 and 131 
of the June 18, 2026 Co-Located Load Order that it is “premature” to determine the extent, if any, 
that the new forms of service promote efficiency or impact reliability.  The Commission cannot 
have it both ways – if it is premature to consider if the new services promote efficiency, or 
adequately protect reliability, the Commission cannot rely on purported efficiency gains, to justify

23 
 
imposition of the new services, and cannot claim to have done so in a way that is protective of 
reliability.   
Second, the only issue that CD Services resolve is rate levels for embedded costs allocated 
to the loads taking such services.  The form of service does not dictate what studies should be 
conducted, or what upgrades might be necessary for the system.  Whether or not a customer seeks 
CD Service, studies should consider the actual circumstances of the proposed interconnection, 
which will be dictated by engineering and physics, and not by the rate level charged to the 
customer.  The notion that CD Service impacts issues such as where a customer interconnects 
depend on a fallacy that system studies consider rate levels rather than the details of the proposed 
interconnection. 
Interconnecting to the grid burdens the system by adding new loads and operating 
contingencies that must be addressed by system operators.  Grid interconnections also bring 
significant project benefits such as the ability to receive load following service from off-site 
generation.  The totality of these burdens and benefits—benefits which no doubt exceed the cost 
of Network Service based on gross load—easily justify charging flexible large loads, and indeed 
all large loads, the same rate as all other transmission customers.  To allow for preferential rate 
treatment would allow those customers to rely upon the grid and its benefits at a price that is 
subsidized by all other customers.  That cannot be said to be just and or reasonable.47  Such a 
 
47  See Coal. of MISO Transmission Customers, 45 F.4th at, 1009 (alterations in original) (quoting S.C. Pub. Serv. 
Auth. v. FERC, 762 F.3d 41, 53 (D.C. Cir. 2014) (per curiam)) (“The cost-causation principle requires that ‘[t]he 
cost of transmission facilities . . . be allocated to those within the transmission planning region that benefit from 
those facilities in a manner that is at least roughly commensurate with estimated benefits.’”).

24 
 
decision is not grounded in reasoned decision making and is not supported by substantial 
evidence.48   
B. The Commission’s Emphasis On Control Technologies and Protection 
Systems Is In Tension With The Commission’s Open Access Policies And 
Therefore Is Arbitrary And Capricious.  The Commission Also Erred In 
Minimizing The Fact That Such Systems Can And Have Failed. 
 
As Exelon, FirstEnergy and other Transmission Owners have explained in the PJM Co-
Located Load Proceeding, protective systems can provide value, but they are no panacea.  Such 
systems do not operate instantaneously and without failure.  If a load unexpectedly draws excess 
supply from the grid, for even a moment, the transmission system sees a rapid demand spike, which 
may stress and harm the system.49  Moreover, as the Commission acknowledged, “PJM maintains 
that it is always possible that any protection system in an isolated (but not islanded) Co-Location 
Arrangement could mis-operate, be disabled, or degrade, and that, in the few instances where such 
schemes exist on the PJM system, PJM has observed these schemes fail, and the load has taken 
grid service.”50  This concern is no less applicable to flexible loads that would depend on such 
systems to ensure that their actual use does not exceed their planned use. 
As the Commission recognizes from PJM’s comments, “if the protection system fails, the 
large load would instantly take significant energy from the system” and “though a few such 
configurations may seem tolerable, the risk increases with large quantities of such 
 
48  See Florida Gas, 604 F.3d at 639 (“[T]he Commission ‘must be able to demonstrate that it has made a reasoned 
decision based upon substantial evidence in the record.’”) (citation omitted); Consol. Edison Co. of N.Y., 305 
U.S. at 229 (explaining that substantial evidence means “more than a mere scintilla”); see also 5 U.S.C. § 706. 
49  Id. 
50  December 18, 2025 Co-Located Load Order at P 44.

25 
 
configurations.”51  To address this risk, the Commission “direct[s] PJM to apply a penalty rate.”52  
Assessing penalties, however, only addresses the issue after the fact and does not remediate the 
reliability implications of faulty protective systems.   
As previously discussed, because the Commission has not addressed these issues in making 
its preliminary finding that flexible loads should be entitled to take the same transmission services 
that the Commission directed in the PJM Co-Located Load Proceeding, it has not engaged in 
reasoned decision making and fails to satisfy the APA requirements. 
C. CD Service Will Not Promote Efficiency Or Change Siting. 
To be clear, under any circumstance, project development teams for new load, whether that 
load is co-located or not, already have a strong incentive to site their facilities on the grid at a 
location that minimizes the need for transmission upgrades.  Project developers understand that 
additional work can add cost, increase complexity, risk project delay, and result in lost opportunity.  
In addition, and as discussed above, wise siting decisions will minimize the need for system 
upgrades, which will hasten interconnection.  That benefit is real.  But it has nothing to do with 
the proposed CD Service.  This is because the impacts to the grid are based on physics and 
engineering.  Whether the service paid for is based on net load or gross load does not change that 
planning and siting depend on the physics and engineering of the grid.  
The Commission’s preliminary finding regarding the availability of CD Service does not 
change how the study process should work.  Regardless of cost allocation, ensuring there is a 
reliable grid is essential and understanding what load amount the system needs to support is 
necessary.  If transmission providers are forced to pretend a 500 MW load is only 50 MW, or even 
 
51  Id. P 17. 
52  Id. P 212.

26 
 
that it is zero, and pretend away the physics and engineering impacts, it will threaten reliability 
and resource adequacy and therefore cannot be said to be just and reasonable. 
While protective systems can be beneficial, any suggestion that regional planning needs 
are automatically reduced by the establishment of CD Service is also not supported by evidence.  
No loads should be taken out of the broader planning process—to do so would only threaten 
reliability of the system.  Grid operators must plan for such eventualities to ensure system 
reliability.53   
D. The Commission’s Disregard of Reliability Considerations Underscores That 
The Proposed Replacement Rate is Not Just and Reasonable 
The new transmission service options that the Commission proposes to extend to flexible 
large load reflect the fact that the Commission overlooked important reliability concerns.  The 
Commission’s ruling in the June 18, 2026 Co-Located Load Order that the issue is premature, and 
its failure to meaningfully address reliability issues in the Show Cause Order, highlights the fact 
that the Commission has not yet dealt with this issue.54  Protective systems, even when fully 
functioning, are intended to keep net load at zero or below, but as the Commission has held in the 
Co-Located Load Proceeding, it is the gross load that is being followed by resources elsewhere on 
the grid every minute of the day, and thus using and impacting the system every minute of the 
day.55  The suggestion that protective systems that only address net load obviate reliability 
concerns ignores physical reality.  
The Commission’s preliminary finding that Interim NITS should be offered to flexible load 
overlooks potential resource adequacy risks.  This service is, by definition, offered before needed 
 
53  See PJM Tariff §§ 31.1-31.3, 31.6, 32. 
54  June 18, 2026 Order at P 131. 
55  See id.

27 
 
transmission upgrades are completed and it is unclear from the Show Cause Order how it will be 
determined whether the load may be reliably served.  The purpose of this interim service is “more 
rapid interconnection and operation of Co-Located Loads” and the only reliability check is a 
determination by PJM that it can provide “some level of interim service reliably.”56  Among other 
things, we still do not know how PJM will determine whether it can provide “some level of interim 
service reliably” which is an issue that has been left for later development and filings.  Because 
“[t]he reasonableness of a rate is assessed in light of the FPA’s goals of promoting reliable service 
at reasonable rates and developing plentiful energy supplies,”57 and given that it is still unknown 
how one could reasonably determine what level of service can be provided before studies are 
conducted, it cannot be said that these transmission service options are just and reasonable.58  The 
Commission has failed to seriously take into account reliability implications in its finding that 
these new transmission services should be adopted for flexible large loads, and its decision is 
therefore not reasoned decision making and is arbitrary and capricious. 
IV. 
FERC Exceeded Its Jurisdiction. 
A. FERC’s Proposed Replacement Rate Violates the Major Questions Doctrine. 
 
56  Id. P 200.  
57  Constellation Mystic Power, LLC, 45 F.4th at 1035. 
58  Cf. Ameren Servs. Co. v. FERC, 880 F.3d 571, 580–81 (D.C. Cir. 2018) (finding that FERC “ma[de] no real 
attempt to holistically assess all of the various risks and benefits to the transmission owner caused by the addition 
of the upgrade facilities,” that “FERC inadequately considered [the] argument that all costs, and risks, are not 
baked in—that, in fact, shareholders are forced to accept incremental exposure to loss with no corresponding 
benefit” and therefore, that FERC’s “failure to meaningfully respond to it makes FERC’s decision arbitrary and 
capricious”) (footnote omitted); Advanced Energy Mgmt. All., 860 F.3d at 664–65 (explaining the Commission’s 
rationales that “support[ed] the Commission’s finding that the energy market rules were unjust and unreasonable,” 
which included a rationale that “existing generator outage provisions ‘impede PJM’s ability to ensure reliability’ 
because they do not give PJM the authority to rescind approval for a planned outage when there is an emergency”) 
(citation omitted); Cent. Hudson Gas & Elec. Corp. v. FERC, 783 F.3d 92, 111 (2d Cir. 2015) (explaining that 
FERC, in creating the Lower Hudson Zone, considered long-term benefits that would follow accurate price 
signals, including that it would “alleviate the risk of reliability problems in the long run”).

28 
 
There is no basis to change the PJM Tariff under FPA section 206 when the purpose of the 
change is to provide preferential treatment or a preferred service to a certain category of customers.  
Such action would violate the major questions doctrine.  If Congress wanted to give the 
Commission authority to direct its preferred transmission service to benefit certain categories of 
customers, it could have done so.59  It did not do so.  FERC, like all agencies, “ha[s] only those 
powers given to [it] by Congress, and ‘enabling legislation’ is generally not an ‘open book to which 
the agency [may] add pages and change the plot line.”60  The Commission lacks authority under 
the FPA to order a new type of transmission service with the sole purpose to benefit some 
categories of load and to treat those favored types of load differently from other loads that have 
similar system impacts and usage.  Accordingly, FERC proposal to require new transmission 
services be adopted for flexible large loads—because it favors a narrow category of customers 
(i.e., a “subset” of large loads that “are willing and able to limit their energy withdrawals from the 
transmission system under certain conditions”) without reasoned explanation—violates the 
requirement in the FPA that no rate by a public utility grants an undue preference or advantage or 
unreasonable difference in rates.61   
B.  The Commission’s New Approach Infringes On State Retail Authority.   
 
 
59  Cf. Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 468 (2001) (“Congress, we have held, does not alter the 
fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, 
hide elephants in mouseholes.”); see Atl. City Elec. Co., 295 F.3d at 8 (As a federal agency, “FERC is a ‘creature 
of statute,’ having ‘no constitutional or common law existence or authority, but only those authorities conferred 
upon it by Congress. Thus, if there is no statute conferring authority, FERC has none.”) (citation omitted). 
 
60  
West Virginia v. EPA, 597 U.S. 697, 723 (2022) (third alteration in original) (citation omitted); see also Midship 
Pipeline Co. v. FERC, 45 F.4th 867, 877 (5th Cir. 2022) (vacating part of the Commission’s order and remanding 
the remainder because “[t]he FERC’s interpretation of the NGA to give the agency power to determine ‘the 
reasonable cost’ of remediation efforts ‘change[d] the plot line’ of its enabling legislation, and was therefore 
erroneous” and “[t]he FERC lacks such authority under the NGA, and it likewise lacked authority to order an ALJ 
to make such a determination indirectly”) (second alteration in original) (quoting West Virginia v. EPA, 597 U.S. 
at 723). 
61  16 U.S.C. § 824d(b).

29 
 
The states, not the Commission, have jurisdiction to decide when and in what 
circumstances retail load will be curtailed, and how utilities should charge and treat retail 
customers in those circumstances.  The Commission has jurisdiction over “the transmission of 
electric energy in interstate commerce and to the sale of electric energy at wholesale in interstate 
commerce,” and over “all facilities for such transmission or sale of electric energy.”62  Except as 
otherwise provided in the FPA, the states retain jurisdiction over “any other sale of electric energy” 
and “over facilities used for the generation of electric energy or over facilities used in local 
distribution or only for the transmission of electric energy in intrastate commerce, or over facilities 
for the transmission of electric energy consumed wholly by the transmitter.”63   
States decide how the retail obligation to serve should be met.  For example, states might 
require the provision of backup service to retail customers who lose supply from their contracted 
supplier, would regulate the distribution system costs associated with such service that would be 
charged to the retail customer, and would regulate the costs and terms of the backup service.  
Rather than honoring the states’ freedom and flexibility to exercise their jurisdiction over such 
questions, the Commission’s new rule appears to create a new federal construct that defines the 
extent and terms of service in such situations.  That is, the Commission’s new rules leave it entirely 
up to the customer to specify a contract demand service level that it will purportedly not exceed, 
even if state law mandates that the local utility provide the customer with backup service in the 
event of an outage.  The Commission’s conclusion that the customer will not take additional 
service lies in direct conflict with the states’ backup service mandates.  The Commission does not 
have authority under the FPA to dictate the terms of retail service in that fashion.   
 
62  16 U.S.C. § 824(b). 
63  Id.

30 
 
Unlike wholesale demand response programs, which “allow[] any state regulatory body to 
prohibit consumers in its retail market from taking part in wholesale demand response programs,” 
thereby “not requir[ing] any “‘action[ ] that would violate State laws or regulations,’” the 
Commission’s new forms of transmission services provide no such limitation.64  As the Supreme 
Court has explained, however, “if indirect or tangential impacts on wholesale electricity rates 
sufficed, FERC could regulate now in one industry, now in another, changing a vast array of rules 
and practices to implement its vision of reasonableness and justice,” a result that the Court could 
not “imagine . . . was what Congress had in mind.”65  That is the problem here with FERC’s 
proposal to extend the new transmission services that it devised in the PJM Co-Located Load 
Proceeding to flexible large load. 
As the Supreme Court explained, the FPA 
“limit[s] FERC’s sale jurisdiction to that at wholesale,” reserving 
regulatory authority over retail sales (as well as intrastate wholesale 
sales) to the States.  FERC cannot take an action transgressing that 
limit no matter how direct, or dramatic, its impact on wholesale 
rates.  Suppose, to take a far-fetched example, that the Commission 
issued a regulation compelling every consumer to buy a certain 
amount of electricity on the retail market.  Such a rule would 
necessarily determine the load purchased on the wholesale market 
too, and thus would alter wholesale prices.  But even given that 
ineluctable consequence, the regulation would exceed FERC’s 
authority, as defined in § 824(b), because it specifies terms of sale 
at retail—which is a job for the States alone.66 
FERC’s CD Services similarly interfere with States’ regulation of the terms of sale at retail, 
dictating the terms and circumstances of service to end use customers who lose their contracted 
retail power supplier—an area that is directly within the States’ domain.  The Commission is 
 
64  FERC v. Elec. Power Supply Ass’n, 577 U.S. 260, 275 (2016) (third alteration in original) (citation omitted). 
65  Id. at 278. 
66  Id. at 279–80 (alteration in original) (citations omitted).

31 
 
unable to do indirectly what it cannot do directly, which is what it does when it intrudes on state 
regulatory authority over retail service in this fashion.67 
The Commission should leave retail service questions to the retail regulator.  The 
imposition of CD Service rates to usurp these questions exceeds the Commission’s lawful 
authority. 
V. 
Conclusion 
Because neither the Commission nor any other complainant have satisfied their burden 
under FPA section 206 to show that PJM’s existing Tariff is unjust and unreasonable with respect 
to flexible large load (or any other type of load) and the Commission has not engaged in reasoned 
decision making in the Show Cause Order the Commission should grant rehearing and revoke its 
preliminary finding in the Show Cause Order that the new transmission service offerings that it 
devised in the PJM Co-Located Load Proceeding should be extended to flexible large loads, or 
any other large loads.   
 
 
 
 
 
 
67  Cf. Nat’l Fuel Gas Supply Corp. v. FERC, 909 F.2d 1519, 1522 (D.C. Cir. 1990) (“once want of power to do this 
directly were established, the existence of power to achieve the same end indirectly through the conditioning 
power might well be doubted”) (quoting Sunray Mid-Continent Oil Co. v. FPC, 364 U.S. 137, 152 (1960) and 
citing Richmond Power & Light v. FERC, 574 F.2d 610, 620 (D.C. Cir. 1978) (the Commission may not achieve 
indirectly through conditioning power of Federal Power Act what it is otherwise prohibited from achieving 
directly)); Am. Gas Ass’n, 912 F.2d at 1510 (“[T]he Commission may not use its § 7 conditioning power to do 
indirectly . . . things that it cannot do at all.”); see also FERC v. Elec. Power Supply Ass’n, 577 U.S. at 288 (“The 
FPA ‘leaves no room either for direct state regulation of the prices of interstate wholesales’ or for regulation that 
‘would indirectly achieve the same result.’”) (citation omitted).

32 
 
Respectfully submitted, 
 
/s/ William Sauer 
William Sauer 
Vice President, Federal Regulatory 
Affairs  
Exelon Corporation  
701 Ninth St. N.W.  
Washington, DC 20001  
Telephone: 202-868-7499  
Email: william.sauer@exeloncorp.com   
/s/ Bradley R. Perkins  
Bradley R. Perkins 
Vice President and Deputy General Counsel 
Exelon Corporation 
Chase Building 
10 S. Dearborn, 52nd Floor 
Chicago, IL 60603 
(312)394-2632 
Telephone: 312-394-2632 
Email: bradley.perkins@exeloncorp.com 
 
 
On behalf of Exelon Corporation 
 
 
/s/ Amanda P. Parker 
Amanda P. Parker 
Corporate Counsel 
FirstEnergy Service Company 
341 White Pond Drive 
Akron, OH 44320 
 
Telephone: (330) 384-4592 
Email: aparker@firstenergycorp.com  
 
 
 
On behalf of The FirstEnergy 
Transmission Companies

CERTIFICATE OF SERVICE 
 
I hereby certify that I have this day served the foregoing document upon each person 
designated on the official service list in the above captioned dockets. 
 
Dated at Chicago, IL this 20th day of July, 2026. 
 
/s/ Geneva Kennedy  
Geneva Kennedy  
Exelon Corporation