ER26-3380-000 · 2026-08-21 · Pennsylvania Office of Consumer Advocate

Protest of the Pennsylvania Office of Consumer Advocate to PJM Interconnection, L.L.C.’s Reliability Backstop Procurement proposal

UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
 
 
 
PJM Interconnection, L.L.C. 
 
) 
) 
) 
) 
) 
 
 
Docket No. ER26-3380-000 
 
PROTEST OF  
THE PENNSYLVANIA OFFICE OF CONSUMER ADVOCATE 
 
RE: RELIABILITY BACKSTOP PROCUREMENT TO ADDRESS RESOURCE 
ADEQUACY CONCERNS STEMMING FROM NEW LOAD ADJUSTMENTS 
 
 
 
 
August 21, 2026

i 
 
Table of Contents 
 
I. 
Introduction ........................................................................................................................... 1 
II. 
Executive Summary .......................................................................................................... 1 
III. 
Summary of Cost Allocation Portion of PJM’s Tariff Filing ........................................ 4 
IV. 
FERC’s Exclusive Jurisdiction to Determine PLC and NSPL Value 
Methodologies ................................................................................................................................ 8 
A. 
NSPL Determinations for Transmission Costs Allocations to LSEs ................................ 10 
B. 
PLC Determinations for Capacity Cost Allocations to LSEs ............................................11 
V. 
Argument ............................................................................................................................. 14 
A. 
PJM’s proposal to have states determine the RBO methods for addressing cost 
allocation of RBP costs is unjust and unreasonable because it presents a jurisdictional 
problem that FERC must address. ............................................................................................ 14 
B. 
There is time to get cost allocation right – by the time cost allocation comes due for 
the first Delivery Year in which RBP Resources are expected to be in service (i.e., 
2028/2029). ............................................................................................................................... 17 
C. 
Potential Relief Options .................................................................................................... 17 
1. 
Option 1: Recognize and exercise exclusive jurisdiction over RBO value 
methodologies; FERC can declare its exclusive jurisdiction over determining the RBO 
methods and require jurisdictional transmission owners to make additional tariff filings 
that propose RBO methods for their transmission zones within PJM. ................................. 17 
2. 
Option 2: Relinquish exclusive jurisdiction over PLC methodologies; FERC can 
declare that states have exclusive jurisdiction to determine PLC and NSPL methods, 
and by extension the proposed RBO method, and require Electric Distributors that are 
signatories to the RAA to report them to PJM. ..................................................................... 19 
3. 
Option 3: Establish a new jurisdictional category for PLC methodologies for 
RBOs; FERC can legally distinguish PJM’s proposal for state utility commissions to 
determine the RBO method from the PLC and NSPL methods and declare that state 
utility commissions have exclusive jurisdiction to determine and approve the methods 
for determining RBO values for purposes of PJM cost allocation of RBP obligations to 
LSEs. ..................................................................................................................................... 22 
D. 
FERC should adopt Option 1 by affirming its exclusive jurisdiction over RBO 
methods and requiring each transmission owner to file Attachment M-2 amendments 
containing their proposed RBO method. .................................................................................. 22 
VI. 
Conclusion ....................................................................................................................... 25 
 
Appendix A

1 
 
UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
 
 
 
PJM Interconnection, L.L.C. 
 
) 
) 
) 
) 
) 
 
 
Docket No. ER26-3380-000 
 
I. 
Introduction 
Before the Federal Energy Regulatory Commission (FERC or Commission), the 
Pennsylvania Office of Consumer Advocate (PA OCA) files this Protest in response to the PJM 
Interconnection L.L.C.’s (PJM’s) July 31, 2026, Federal Power Act (FPA) Section 205 filing 
containing revisions to the PJM Open Access Transmission Tariff (Tariff) and the Reliability 
Assurance Agreement Among Load Serving Entities (RAA) to establish the Reliability Backstop 
Procurement (RBP)1—a one-time procurement of new capacity to address resource adequacy 
challenges in the PJM Region arising from insufficient commitments of capacity in the 2027/2028 
and 2028/2029 Reliability Pricing Model (RPM) Auctions, primarily driven by the unprecedented 
addition of large loads, most notably data centers. 
The PA OCA represents the interests of Pennsylvania utility consumers or ratepayers before 
FERC.2 “Ratepayers” refers to the millions of retail end users that are served by the PJM grid. 
II. 
Executive Summary 
Under FERC precedent, FERC possesses—and states lack—jurisdiction to determine or 
approve the methods that are used to develop peak load contribution (PLC) and network service 
 
1 Reliability Backstop Procurement to Address Resource Adequacy and Large Loads, PJM Interconnection, L.L.C., 
Docket 
No. 
ER26-3380 
(July 
31, 
2026) 
(PJM 
RBP 
Filing), 
https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20260731-5214. 
2 71 P.S. § 309-4.

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peak load (NSPL) values, which PJM uses for allocating capacity and transmission costs, 
respectively, to load serving entities (LSEs) within the PJM Region. Despite FERC’s longstanding 
exercise of authority over PLC and NSPL value determinations, PJM proposes in its RBP filing to 
address cost allocation of RBP obligations through “state and/or [state utility commission]-
determined allocation of RBP UCAP MW to LSEs within each zone/area.” PJM defines the 
allocation of MW made through this method as a new term, an LSE’s “RBP Obligation” or “RBO.” 
PJM’s proposal is unjust and unreasonable because for states to determine the RBO values, they 
would have to determine and approve methods for RBO PLCs—and the states lack jurisdiction to 
do so. FERC must address this jurisdictional problem by rejecting PJM’s proposal for the 
allocation of RBO MWs and costs. And FERC must mandate an alternative that either maintains, 
or expressly—with a reasoned explanation—re-delineates the current jurisdictional boundary 
concerning PLC determination and approval. FERC can establish legally durable jurisdictional 
clarity, as follows:  
Recognize and exercise exclusive jurisdiction over RBO value methodologies. FERC 
could (a) declare FERC’s exclusive jurisdiction to evaluate and approve RBO value 
methodologies, (b) determine PJM’s cost allocation proposal for RBP obligations is unjust and 
unreasonable because it unlawfully delegates the establishment of RBO methodologies to states, 
(c) require jurisdictional transmission owners within PJM to submit additional filings based on this 
docket to further define the methods they will use to determine individual customers’ RBO values 
within each transmission owner zone, (d) mandate that all PJM transmission owners–including 
those that have not yet filed Attachment M-2s to the PJM OATT—make Section 205 tariff filings 
for the RBO value methodologies in Attachment M-2s, and (e) set a time frame to resolve protests 
and comments to the transmission owners’ tariff filings regarding the RBO methodologies;

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Relinquish exclusive jurisdiction over PLC methodologies. FERC could (a) reverse its 
prior decisions that appear to establish FERC’s exclusive jurisdiction over determining PLC 
methods and jurisdictionally analogous NSPL methods, (b) declare that states or state utility 
commissions have exclusive jurisdiction to determine and approve the PLC and analogous NSPL 
methods, and by extension the RBO method, and (c) mandate Electric Distributors that are 
signatories to the RAA to report the state or state utility commission-approved PLC/NSPL/RBO 
methodologies to PJM as necessary inputs into PJM’s cost allocation methods used for wholesale 
capacity costs and transmission costs; or  
Establish a new jurisdictional category for PLC methodologies for RBOs. FERC could 
(a) legally distinguish PJM’s proposal for state utility commissions to determine the RBO method 
from FERC’s jurisdiction over the PLC and analogous NSPL methods, and (b) declare that state 
utility commissions have exclusive jurisdiction to determine and approve the methods for 
determining RBO values for purposes of PJM cost allocation of RBP obligations to LSEs.  
For the reasons explained below, FERC should grant the first relief option by finding 
that PJM’s RBO cost allocation proposal is unjust and unreasonable, exercising jurisdiction 
over how RBO costs are allocated to LSEs, and directing all transmission owners to make 
mandatory Attachment M-2 filings that define their RBO allocation methodologies. 
Regarding jurisdiction, the RBO method is indistinguishable from the PLC and analogous NSPL 
methods that are currently under FERC jurisdiction. Importantly, if FERC decides that the RBO 
value methodology used by PJM for RBP cost allocation is somehow distinguishable from the 
PLC/NSPL value methodologies used for capacity/transmission cost allocation, FERC would have 
to expressly declare that states have jurisdiction over the RBO methods. Further, FERC would

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have to offer a reasoned explanation for departing from its prior interpretations of the FPA in 
analogous contexts.  
If FERC does not expressly identify a clear jurisdictional path forward, state utility 
commissions could find that they lack authority to determine the RBO methods. This would result 
in regulatory confusion or worse—yearslong litigation over the RBO method. Without expressly 
defined jurisdictional roles, the result will be to default to PJM’s backup plan, which is to allocate 
RBP costs to all LSEs PJM-wide on a pro rata basis using existing PLC methods. However, pro 
rata RBP cost allocation to LSEs using PLC values is unjust and unreasonable because it will likely 
result in non-large load customers being allocated RBP costs, despite these ratepayers not having 
caused the costs. 
III. 
Summary of Cost Allocation Portion of PJM’s Tariff Filing 
In its filing, PJM proposes that the states or state utility commissions (PJM refers to state 
utility commissions as the “Relevant Electric Retail Regulatory Authority” or “RERRA”)3   
determine allocation of cleared RBP unforced capacity (UCAP) megawatts (MW) to LSEs, 
through the RBO methods, within each Electric Distributor’s zone/area, as reported by each 
Electric Distributor to PJM. If the Electric Distributors do not report the RERRA-approved RBO 
methods to PJM, PJM proposes to allocate RBP costs to LSEs using existing FERC-approved PLC 
values within the relevant transmission zone. 
More specifically, PJM proposes the following as to cost allocation: 
PJM is proposing that cost allocation to LSEs within an Electric 
Distributor’s zone/area be based on “the state and/or RERRA-determined 
allocation of cleared RBP UCAP MW to LSEs within each Electric Distributor’s 
zone/area, as reported by each Electric Distributor to [PJM].” PJM has thus created 
 
3 PJM RBP Tariff Filing at 174 (defining “Relevant Electric Retail Regulatory Authority” or “RERRA” according to 
its definition in PJM’s Operating Agreement); PJM, Intra-PJM Tariffs, OA § 1 (defining “Relevant Electric Retail 
Regulatory Authority” as “an entity that has jurisdiction over and establishes prices and policies for competition for 
providers of retail electric service to end-customers, such as the city council for a municipal utility, the governing 
board of a cooperative utility, the state public utility commission or any other such entity.”).

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a new defined term, the “RBP Obligation” or “RBO”, to refer to this state and/or 
RERRA-determined allocation of RBP UCAP MW to LSEs within each zone/area. 
The RBO is flexible. For example, it permits states and/or RERRAs to rely on their 
own, disparate definitions of data centers and large loads, and to determine which 
retail customers should be allocated RBP Charges, generally. PJM’s authority over 
wholesale markets does not extend to dictating the allocation of costs to retail load, 
data centers and other large loads and, for purposes of cost allocation to such data 
centers and other large loads, each state and/or RERRA may have its own 
methodology, developed in accordance with its unique needs and considerations.  
PJM’s proposal requires that Electric Distributors report, to PJM, the state 
and/or RERRA-determined allocations of RBP UCAP MW to LSEs in their 
zone(s)/area(s). To the extent that Electric Distributors report RBOs, the RBP 
Charge assessed daily to an LSE in the relevant zone/area will equal the LSE’s daily 
reported RBO MW in the zone/area divided by the total daily RBO MW in the 
zone/area, and multiplied by the total, daily RBP Charges allocated to the zone/area. 
In the unexpected event that RBOs are ultimately not reported to PJM, PJM 
will still need to proceed with settlement of the RBP Charges. In this case, PJM will 
rely on a back-up cost allocation methodology to determine allocation to LSEs. 
PJM’s back-up methodology applies PJM’s status quo method for allocating 
capacity costs pursuant to RAA, Schedule 8, which incorporates Load Adjustments 
for purposes of allocating capacity costs to LSEs. In other words, if no allocation 
is reported by the relevant Electric Distributors with allocated RBP UCAP MW, 
PJM will allocate RBP Charges based on the Peak Load Contribution submitted to 
PJM for the LSEs in the relevant zone/area. 
Importantly, PJM is not proposing a backup methodology for how RBP 
Charges should be allocated to non-jurisdictional, retail customers served by each 
of the LSEs in any Electric Distributor’s zone/area. Even if Electric Distributors do 
not report any state and/or RERRA-determined RBOs in their zone(s)/area(s), and 
even if PJM subsequently applies the status quo allocation methodology to PJM’s 
LSE customers, PJM would not, under the proposed methodology, determine any 
further allocation to retail customers served by those LSEs.  
PJM and the PJM states and/or RERRAs must cooperate to ultimately 
allocate wholesale costs to end use, retail customers. In the Commission’s 2007 
order on rehearing affirming its finding that PJM’s RPM market design was just 
and reasonable, the Commission noted that the “question of jurisdiction over 
resource adequacy is a complex matter that stands at ‘the confluence of state-federal 
jurisdiction.’” The proposed RBP methodology recognizes and respects this 
division of responsibility. While it is within PJM’s purview to allocate the costs of 
RBP Resources to LSEs, who are customers of PJM, the Commission has also 
recognized that it is beyond the scope of PJM’s authority to “address how LSEs 
[will subsequently] bill retail customers for such charges” as doing so would affect 
the “ability [of the PJM states and/or RERRAs] to allocate such charges.” Thus, 
PJM’s proposed methodology for allocating RBP Charges sets the table for states

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and/or RERRAs, by empowering them to make decisions about how to best further 
allocate RBP Charges to data centers and other retail customers.4 
PJM explains why it believes its cost allocation proposal is just and reasonable.5 It 
continues by stating that its proposal recognizes that allocation to retail customers, including data 
centers, is within the state utility commission’s purview.6 Specifically, PJM states: 
The proposed cost allocation methodology assigns RBP costs in a manner 
that respects the balance of authority between states, the Commission, and PJM. 
Even in its infancy, the RPM required that the Commission “recognize the 
traditional role of state and local entities in regulating resource adequacy” while 
also remaining “aware of [its] responsibilities under the FPA to ensure that 
adequate service is provided, and that wholesale rates are just and reasonable.” 
Thus, the Commission found that the appropriate course of action was to “defer to 
state and local entities’ decisions when possible on resource adequacy matters, but 
in doing so . . . not shirk our congressionally-mandated responsibilities.”  
First, the proposed cost allocation methodology empowers states and/or 
RERRAs to submit RBP RBOs, which PJM would then apply to the allocation of 
RBP Charges to LSEs. However, under the proposed allocation framework, PJM 
would retain a back-up methodology for allocated RBP Charges to LSEs, which 
would apply if no RBOs are reported for a particular zone/area. PJM’s proposed 
Tariff language expressly provides states and/or RERRAs with the opportunity, 
within PJM’s proposed cost allocation framework, to submit state-determined 
RBOs. This back up cost allocation methodology is needed, because if no RBOs 
are reported for a particular zone/area, PJM would still need to allocate the RBP 
costs in a manner that is just and reasonable.  
PJM’s approach finds support in the Commission’s 2025 order accepting 
Midcontinent Independent System Operator, Inc.’s (“MISO”) Revised Expedited 
Resource Addition Study (“ERAS”) Proposal. In that matter, Commission found 
that RERRA participation in the ERAS process was permissible and not an 
improper delegation of federal authority to the states, as the participation of 
RERRA: 
would be wholly pursuant to a Commission-jurisdictional process . 
. . proposed by MISO and approved by the Commission—not by 
state authorities—and under which a [Generator Interconnection 
Procedure] is on file with the Commission and any future revisions 
would be subject to Commission approval. Further, the ERAS 
process would remain subject to the Commission’s authority 
 
4 PJM RBP Transmittal Letter at 97-100 (citations omitted). 
5 Id. at 100-04. 
6 Id. at 104-08.

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pursuant to FPA sections 205 and 206. In contrast, in Talen, the 
Maryland Commission established a state program that operated 
outside a Commission-jurisdictional process and “interfered” with 
the Commission’s authority to establish interstate wholesale rates. 
Similarly, if accepted, PJM’s proposed cost allocation methodology would 
be set forth expressly in its Tariff, approved by and on file with the Commission. 
The Tariff would expressly permit states and/or RERRAs to participate in the cost 
allocation of RBP costs to LSEs by reporting RBOs, which would supplant PJM’s 
backup allocation methodology of RBP Charges to LSEs. Like MISO’s Revised 
ERAS Proposal, the proposed cost allocation methodology would nevertheless 
remain subject to the Commission’s authority pursuant to FPA sections 205 and 
206.  
Second, PJM’s proposed cost allocation methodology hews closely to the 
Commission’s most recent articulation of where the boundary between 
state/RERRA and federal jurisdiction exists with respect to large loads. Namely, 
while noting concerns “about the impact that large load additions can have on retail 
ratepayers, particularly the concern that other retail ratepayers may be forced to 
subsidize Network Upgrades needed to add large loads to the transmission 
system[,]” the Commission found that, in this realm, the scope of its regulatory 
authority is limited. “Specifically,” it is the PJM states that “have authority over 
how the wholesale costs of providing electricity, including transmission of such 
electricity, to those retail customers are recovered through retail rates.”  
PJM’s cost allocation framework recognizes the need to protect retail 
ratepayers from subsidizing new capacity procured to serve large loads while also 
recognizing PJM’s own jurisdictional limitations. As the Commission has found, it 
is the PJM states and/or RERRAs that have authority over how wholesale costs of 
these new capacity resources are recovered from retail customers through retail 
rates. In fact, PJM does not have a line of sight into the retail load and end-use 
customers served by each relevant LSE. PJM also recognizes that states may each 
define “large loads” and “data centers” differently. Thus, cost allocation 
methodology that provides PJM states and/or RERRAs with the ability to determine 
the specific RBOs that should be assigned to LSEs, as well as to cost allocate to 
end-use customers in their respective states in accordance with their laws and 
policies, supports the NEDC/PJM Governors’ Principles, which include the 
principle that the cost of new capacity should be allocated to data centers who have 
caused the need for additional capacity in the PJM Region.  
Third, PJM’s proposed framework is pragmatic. In the short time remaining 
before the September 30, 2026 RBP, it would simply be infeasible for PJM to obtain 
detailed information about the large loads and the various LSEs serving such large 
loads from every state and RERRA in the PJM Region. States and RERRAs are 
simply in a better position to identify and cost allocate RBP Charges to large loads, 
including data centers, and the LSEs that serve them. States and RERRAs have 
granular information about large loads within their borders. Accordingly, PJM’s

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proposed cost allocation methodology deliberately leaves states and RERRAs with 
the flexibility to protect their own customers by allocating the costs of the 
procurement accordingly. Furthermore, PJM’s proposal recognizes that state laws 
on the allocation of capacity costs to large loads, including data centers, are 
evolving. The proposal recognizes and relies on the pledges of the 13 governors of 
the PJM states to “[u]se all available authorities to ensure that their state public 
utility commissions design rate class structures to ensure that their states’ LSEs 
allocate their share of the cost to procure new capacity through the . . . [a]uctions 
to new data center loads that have not otherwise procured capacity or agreed to be 
curtailable.” However, to the extent that states and/or RERRAs do not provide such 
information, PJM will rely on Commission-approved cost allocation methodologies 
in place today to properly allocate costs to Electric Distributor zones/areas and 
LSEs.  
The proposed methodology addresses the consumer protection goals that 
have been raised by the National Energy Dominance Council, PJM’s 13 state 
governors, and other state and federal entities, while heeding the Commission’s 
recent articulation of the boundary between state and federal jurisdiction.7 
IV. 
FERC’s Exclusive Jurisdiction to Determine PLC and NSPL Value Methodologies  
In its filing, PJM does not recognize current FERC authority over PLC and NSPL value 
methodologies. As is established in more detail below in this section, FERC currently asserts 
jurisdiction over approving PLC and jurisdictionally analogous NSPL value methodologies, which 
are set by transmission owners through voluntary OATT Attachment M-2 filings, made pursuant 
to FPA Section 205. As a result, the PJM transmission owners, not Electric Distributors, establish 
methods for determining PLC and NSPL values within their transmission zones, not Electric 
Distributor zones. FERC currently permits the transmission owners to voluntarily file tariff 
attachments to PJM’s OATT, Attachment M-2s, which establish and specify these methods for 
determining PLC and NSPL values for individual retail customers for purposes of wholesale cost 
allocation to LSEs.  
FERC, PJM, and public utilities have placed PLC (capacity) and NSPL (transmission) 
methodologies into the same category. For example, when a utility files an Attachment M-2 with 
 
7 Id. (citations omitted).

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FERC to amend the PJM OATT, that Attachment M-2 includes both PLC and NSPL.8  Further, 
FERC describes PLC and NSPL methodologies together, as if they were conjoined twins, as 
follows: 
FirstEnergy’s Attachment M-2 governs the determination of Peak Load 
Contribution and Network Service Peak Load for each LSE in its respective 
transmission pricing zone for the PJM planning year. Under this attachment, certain 
FirstEnergy regulated affiliates provide PJM with the information necessary to 
determine the Peak Load Contribution and Network Service Peak Load each 
planning year for each wholesale LSE operating in the affiliates’ respective zones. 
To calculate the Peak Load Contributions, PJM first uses customer load data to 
calculate the five highest daily peaks for the summer period and then allocates an 
appropriate share to each EDC zone. Each EDC in PJM must then allocate a share 
of its PJM-assigned peak load to each customer on its system and aggregate these 
peak loads to the LSE level. PJM in turn uses the reported Peak Load Contributions 
to determine an LSE's capacity obligation. To calculate Network Service Peak 
Loads in the FirstEnergy zone, PJM first determines the FirstEnergy zone's highest 
transmission peak value. An LSE's Network Service Peak Load is equal to its total 
hourly load during the FirstEnergy zone’s highest peak value.9 
 
 
PLC and NSPL methodologies thus involve an analogous and indistinguishable 
interpretation of cooperative federalism under the FPA. Appendix A offers a graphical 
interpretation of this cooperative federalism arrangement.10 Accordingly, FERC’s NSPL precedent 
and related public utility commission interpretations of FERC’s precedent directly bear on PLCs 
and, by natural extension, PJM’s proposed RBP methodology for capacity. Because NSPL, PLC, 
and RBP methodologies appear to be indistinguishable for jurisdictional purposes, this Protest 
analyzes all three. 
 
8 See, e.g., PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 3 (2012). 
9 Id. 
10 Infra App’x A.

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A. 
NSPL Determinations for Transmission Costs Allocations to LSEs 
In AMTRAK v. PPL Elec. Utils. Corp.,11 FERC found that it has jurisdiction over 
determining NSPL methods and, ultimately, the NSPL values assigned to individual retail 
customers for purposes of PJM allocating transmission costs to LSEs, as follows: 
As an initial matter, we find that the Commission has jurisdiction over the matters 
raised in the complaint.  Amtrak challenges the NITS charges assessed by PJM and 
passed through to Amtrak by its retail supplier without mark-up, as well as the 
related PPL methodology for determining Network Service Peak Load 
Contributions, both of which fall within the Commission’s jurisdiction.12 
 
FERC explained that transmission owners’ tariff filings containing the PLC and NSPL 
methodologies are voluntary: 
While many transmission owners have filed their methodologies for determining 
both capacity and [NSPL] contributions in Attachment M-2 to the PJM Tariff, the 
Commission has recognized that such a filing is voluntary and not required by 
PJM.13 
 
The Pennsylvania Public Utility Commission (PA PUC) relied heavily on FERC’s decision 
in 2020 Amtrak to find that it lacked jurisdiction to determine or approve NSPL methods submitted 
by a transmission utility and EDC to PJM.14 Based on 2020 Amtrak, the PA PUC concluded that it 
does not have jurisdiction over the NSPL input into the Network Integration Transmission Service 
(NITS) charge or the method used to calculate the NSPL.15 In that litigation before the PA PUC, 
industrial consumers challenged the utility’s methodology in the creation of NITS tags and NSPL 
contribution, stating that it deviated from PJM’s allocation approach to determining coincident 
 
11 171 FERC ¶ 61,237 (June 18, 2020) (2020 Amtrak), order on reh’g, 173 FERC ¶ 61,043 (Oct. 15, 2020). 
12 2020 Amtrak Order at P 34 (emphasis added) (citing PJM, Intra-PJM Tariffs, OATT, 34.1 Monthly Demand Charge 
(1.0.0), § 34.1(a); N.Y. v. FERC, 535 U.S. 1, 20 (2002); Commonwealth Edison Company and Commonwealth Edison 
Company of Indiana, Inc., 133 FERC ¶ 61,118, at P 11 (2010 ComEd Order)).  
13 Id. at P 45. 
14 Petition of PPL Electric Utilities Corporation for Approval of Its Default Service Plan for the Period June 1, 2021 
Through May 31, 2025, No. P-2020-3019356, 2020 PA. PUC LEXIS 646, *69-74 (Pa. Pub. Util. Comm’n 2020) (PPL 
DSP V Order), https://www.puc.pa.gov/pcdocs/1687575.docx. 
15 Id. at *74.

11 
 
peak, it does not appear to be based on actual customer usage during peak events, and it is 
inconsistent with cost causation principles.16 The industrial customers further argued that the PA 
PUC has jurisdiction to regulate the methods through which Pennsylvania EDCs allocate 
transmission costs to individual customers, contending that because the NSPLs established by the 
EDC follow the customer, regardless of whether the customer takes default service supply from 
the EDC or competitive supply from a competitive supplier regulated by the PA PUC, the PA PUC 
should exercise jurisdiction over the NSPL calculation.17  
In that proceeding, the PA PUC concluded:  
We agree with the observation of [the EDC] that [the industrial customers] conflate 
the payment of NITS charges by an LSE, which are calculated using an NSPL[,] 
with the allocation of transmission charges to retail electric service customers, the 
latter occurring through either (a) [the EDC’s] [retail charge] for default service 
customers, or (b) the private electric supply service contract between [competitive 
supplier] and a shopping customer.18   
Given FERC’s decision in 2020 Amtrak, and further given the PA PUC’s finding of its lack 
of state jurisdiction to regulate a PA PUC-licensed competitive supplier’s contract price with a 
retail customer, the PA PUC concluded that it only has jurisdiction over the retail allocation method 
used by the LSE/default supplier to charge retail capacity rates to default service customers.19 The 
PA PUC interpreted FERC’s “jurisdiction over NITS charges and the methodology used to 
calculate NSPLs” to be “exclusive.”20 
B. 
PLC Determinations for Capacity Cost Allocations to LSEs 
Not only has FERC exercised jurisdiction over transmission NSPL, but also over capacity 
PLC methods that include granular retail inputs. FERC has done so by approving Attachment M-
 
16 Id. at *69-70. 
17 Id. at *71-73. 
18 Id. at *74. 
19 PPL DSP V Order, 2020 PA. PUC LEXIS 646, *74.. 
20 Id.

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2 filings from Pennsylvania transmission owners.21 Attachment M-2 filings amend the PJM Tariff, 
and FERC approves or rejects them accordingly.22  
In so doing, FERC views PJM’s settlement of RPM costs with LSEs as a sale of capacity 
(a wholesale product) from wholesale entities (such as generators) to PJM LSEs (also wholesale 
entities) under wholesale rates subject exclusively to the jurisdiction of FERC. As a result, FERC 
also asserts jurisdiction over the methods by which EDCs assign capacity obligations, and thus 
costs, to PJM LSEs, even if that method entails a “bottom-up” determination of the allocation of 
capacity 
obligations 
to 
LSEs/state-licensed 
competitive 
suppliers. These 
bottom-up 
determinations can entail assigning capacity obligations to individual retail accounts first (PLC 
values), then PJM determining the obligation of an LSE as the sum of the capacity obligations of 
the retails accounts which it serves. 
FERC described FirstEnergy’s Attachment M-2 as follows: 
FirstEnergy’s Attachment M-2 governs the determination of Peak Load 
Contribution and Network Service Peak Load for each LSE in its respective 
transmission pricing zone for the PJM planning year. Under this attachment, certain 
FirstEnergy regulated affiliates provide PJM with the information necessary to 
determine the Peak Load Contribution and Network Service Peak Load each 
planning year for each wholesale LSE operating in the affiliates’ respective zones.  
To calculate the Peak Load Contributions, PJM first uses customer load data to 
calculate the five highest daily peaks for the summer period and then allocates an 
appropriate share to each EDC zone. Each EDC in PJM must then allocate a share 
of its PJM-assigned peak load to each customer on its system and aggregate these 
 
21 See 2020 Amtrak, 171 FERC ¶ 61,237, at P 34 (2020) (noting that “many transmission owners have filed their 
methodologies for determining both capacity and [NSPL] contributions in Attachment M-2 to the PJM Tariff,” and 
that “the Commission has recognized that such a filing is voluntary and not required by PJM”). 
22 See, e.g., PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 1 (2012) (setting Attachment M-2 dispute for 
FPA hearing and settlement judge procedures). See also FirstEnergy Letter Order, PJM Interconnection, L.L.C., 
Docket Nos. ER24-284 & ER24-285 (Dec. 13, 2023), 
https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20231218-3074; PECO Letter Order, PJM 
Interconnection, L.L.C., Docket No. ER14-2340 (Aug. 7, 2014), 
https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20140807-3018; PPL Letter Order, PJM 
Interconnection, L.L.C., Docket Nos. ER22-991-000 & ER22-991-001 (May 11, 2022), 
https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20220511-3061.

13 
 
peak loads to the LSE level. PJM in turn uses the reported Peak Load Contributions 
to determine an LSE's capacity obligation.23 
 
 
When parties disputed FirstEnergy’s proposed revisions to its Attachment M-2, FERC 
responded by establishing evidentiary hearing and settlement procedures.24 In the relevant 
settlement procedures, FERC identified that “[t]he primary issue underlying the Partial Settlement 
[was] whether Attachments M-1 and M-2 are just and reasonable, and not unduly 
discriminatory.”25 FERC’s Settlement Judge reviewed them under the FPA’s legal standard, 
because they are a filed rate within PJM’s governing documents.26  
 
Accordingly, FERC currently regulates the process by which “certain FirstEnergy 
regulated affiliates provide PJM with the information necessary to determine the Peak Load 
Contribution” that involves “[e]ach EDC in PJM . . .  then allocat[ing] an appropriate share of its 
PJM-assigned peak load to each customer on its system and aggregat[ing] these peak loads to the 
LSE level.”27 
Based on the above, FERC currently asserts jurisdiction over approving PLC and NSPL 
value methodologies. 
 
23 PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 3 (2012) (emphasis added). 
24 Id. at P 1. 
25 PJM Interconnection, L.L.C., 144 FERC ¶ 63,011, at P 24 (2013). 
26 See 16 U.S.C. § 824d(d) (“[N]o change shall be made by any public utility in any such rate, charge, classification, 
or service, or in any rule, regulation, or contract relating thereto, except after sixty days’ notice to the Commission and 
to the public.”); see also Okla. Gas and Elec. Co. v. FERC, 11 F.4th 821, 829 (D.C. Cir. 2021) (identifying filed rate 
doctrine extends to matters directly affecting rates); PJM Power Providers Group v. FERC, 96 F.4th 390, 394 (3d. Cir. 
2024) (summarizing filed rate doctrine and applying it to PJM’s Tariff); Duquesne Light Co., 189 FERC ¶ 61,181, at 
n.109 (2024) (citing 16 U.S.C. § 824d(d))). 
27 PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 3 (2012).

14 
 
V. 
Argument 
A. 
PJM’s proposal to have states determine the RBO methods for addressing cost 
allocation of RBP costs is unjust and unreasonable because it presents a jurisdictional 
problem that FERC must address. 
FERC cannot delegate its FPA authority to the states.28 Likewise, the states cannot take the 
power that belongs to FERC under the FPA.29 PJM’s act of allocating wholesale costs to wholesale 
customers (LSEs)—including capacity and transmission costs—is FERC-jurisdictional under the 
FPA.30 As established above, FERC has even asserted its jurisdiction over the PLC and NSPL 
inputs that are a part of PJM’s allocation of capacity costs and transmission costs to LSEs.31 
Specifically, FERC has asserted its jurisdiction to approve the methods for determining PLC and 
NSPL values that are assigned to individual retail customers for purposes of PJM allocating 
capacity and transmission costs to LSEs serving those retail customers.32  
To be clear, the PLC and NSPL values—which are determined by the PLC/NSPL 
methodologies adopted by the PJM transmission owners and typically filed in Attachment M-2s to 
the PJM OATT—are assigned to individual retail customers to create capacity and transmission 
obligations, respectively, which PJM then sums to determine an aggregate amount for purposes of 
 
28 Cf. Mistretta v. United States, 488 U.S. 361, 372-73 (1989) (quoting American Power & Light Co. v. SEC, 329 U.S. 
90, 105 (1946)) (noting that the “Court has deemed [congressional delegations of statutory authority to be] 
‘constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and 
the boundaries of this delegated authority.’” (emphasis added)). Here, the boundary of Congress’s delegation includes 
the FPA’s bright line between federal and state jurisdiction. Miss. Power & Light Co. v. Mississippi ex rel. Moore, 487 
U.S. 354, 374 (1988) (“Congress has drawn a bright line between state and federal authority in the setting of wholesale 
rates and in the regulation of agreements that affect wholesale rates.”). 
29 See Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 153 (2016). 
30 See 16 U.S.C. § 824(b)(1) (explaining FPA’s jurisdictional bright line); Hughes, 578 U.S. at 153 (“The [FPA] . . . 
vests in [FERC] exclusive jurisdiction over wholesale sales of electricity in the interstate market” which is “a domain 
Congress reserved to FERC alone.”); South Carolina Pub. Serv. Auth. v. FERC, 762 F.3d 41, 84-87 (D.C. Cir. 2014) 
(in the electric transmission context, FERC “has ‘clear’ authority to reallocate capacity and production costs.”). 
31 See supra Part IV; PPL DSP V Order, 2020 PA. PUC LEXIS 646, *74 (Pa. Pub. Util. Comm’n 2020) (finding 
FERC’s “jurisdiction over NITS charges and the methodology used to calculate NSPLs” to be “exclusive” based on 
Amtrak 2020). But cf. 2020 Amtrak, 171 FERC ¶ 61,237 (June 18, 2020), order on reh’g, 173 FERC ¶ 61,043, at P 24 
(Oct. 15, 2020) (2020 Amtrak Rehearing Order) (finding that Amtrak’s “clarification on whether or not the calculation 
and application of Network Service Peak Load falls within the Commission’s exclusive jurisdiction” was “unnecessary 
to the result reached in this case and [was] therefore denied”). 
32 2020 Amtrak Rehearing Order, 173 FERC ¶ 61,043, at P 24 (2020).

15 
 
capacity and transmission cost allocation to LSEs serving those retail accounts. The PLC/NSPL 
values follow the retail customers as they shop between LSEs that are either state-licensed 
competitive suppliers or default suppliers within a restructured state. PJM sums or aggregates the 
capacity obligations of all the retail accounts that the LSE serves and then allocates the 
corresponding wholesale capacity costs or transmission costs to that LSE. This cost allocation 
method by PJM assigns costs to LSEs roughly commensurate with cost causers (i.e., the retail 
accounts that the LSEs serve). However, once the wholesale capacity costs are allocated to LSEs, 
FERC jurisdiction ends and state jurisdiction begins regarding how the LSE performs cost 
allocation to its retail customers. In vertically integrated states, the LSE is the transmission 
owner/Electric Distributor, and state utility commissions oversee the retail cost allocation. In 
restructured states, like Pennsylvania, the LSE is one of two entities: a state-licensed competitive 
supplier or the Electric Distributor; the PA PUC solely exercises jurisdiction over the retail 
allocation done by the Electric Distributor to default service customers. 
As established above, PJM proposes in its RBP filing that state utility commissions 
determine the methods for assigning RBO values to individual retail customers/data centers/large 
loads for purposes of PJM allocating RBO capacity costs to LSEs serving those retail customers. 
PJM’s RBO proposal presents a jurisdictional question that FERC must address: While 
FERC’s jurisdiction clearly covers the act of PJM allocating wholesale capacity costs and 
transmission costs to LSEs (i.e., by PJM summing the capacity/transmission obligations of all the 
retail accounts that the LSE serves based on PLC/NSPL values and assigning the aggregate costs 
to the LSEs),33 does FERC jurisdiction rightfully reach down to the methods for determining 
PLC/NSPL inputs, and by extension the RBO value inputs?  
 
33 Cf. Tri-State Generation and Transmission Association, Inc., 196 FERC ¶ 61,127 (2026) (approving proposal to 
“allocate the cost of interconnection facilities and any additional network upgrades that a transmission provider

16 
 
To support its proposal, PJM distinguishes between (1) the RBO methods for assigning 
RBO values to data centers and other large load retail customers for purposes of PJM’s allocation 
of RBP costs to LSEs, and (2) retail cost allocation methods used by LSEs in an Electric 
Distributor’s zone to price capacity to individual retail customers.34 While this distinction brings 
helpful clarity between the PLC/NSPL values used by PJM for allocating wholesale capacity costs 
to LSEs and retail cost allocation methods used by LSEs to charge capacity rates/prices to 
individual retail customers, it does not resolve the jurisdictional problem presented in PJM’s filing 
through PJM’s proposal for states to exercise jurisdiction to determine the RBO methods. 
Moreover, in its filing, PJM asserts that establishing RBO methods to allocate RBP costs 
to end use, retail customers requires cooperative federalism.35 It cites to a 2007 FERC Order where 
FERC distinguished between wholesale cost allocation methods and retail cost allocation 
methods.36 Again, the cite to this FERC order does not resolve the jurisdictional problem presented 
by PJM’s proposal. Rather, the quotes that PJM relies on from this 2007 FERC Order provide 
support for the PA OCA’s assertion that PJM’s proposal presents a jurisdictional problem, as FERC 
clearly recognized its complete authority over wholesale cost allocation methods. Furthermore, for 
cooperative federalism to function, there must be clear divisions between federal and state 
jurisdiction.  
 
directly assigns to Tri-State Merchant to the Utility Member, who may elect to pass those costs directly to its HIL 
Customer.”). 
34 PJM RBP Transmittal Letter at 99. 
35 Id. 
36 Id. at 99-100.

17 
 
B. 
There is time to get cost allocation right – by the time cost allocation comes 
due for the first Delivery Year in which RBP Resources are expected to be in service 
(i.e., 2028/2029).  
PJM states that its proposed RBO framework is pragmatic because in the short time 
remaining before the September 30, 2026 RBP, it would simply be infeasible for PJM to obtain 
detailed information about the large loads and the various LSEs serving such large loads from 
every state and RERRA in the PJM Region.37  
However, the important date for purposes of determining final RBO methods for PJM’s 
costa allocation of RBP costs to LSEs is when RBP obligations begin accruing for the first Delivery 
Year in which RBP Resources are expected to be in service.38 Hence, September 2026 is not the 
deadline. There is time for FERC to address this cost allocation jurisdictional problem and ensure 
that RBO methods are appropriately determined.  
C. 
Potential Relief Options 
1. 
Option 1: Recognize and exercise exclusive jurisdiction over RBO value 
methodologies; FERC can declare its exclusive jurisdiction over determining 
the RBO methods and require jurisdictional transmission owners to make 
additional tariff filings that propose RBO methods for their transmission zones 
within PJM. 
If the methods for determining NSPL and PLC contributions are rightfully transmission-
owner-determined under the FPA, for transmission zones within PJM, those methods are FERC 
jurisdictional and PJM and states do not have discretion or authority to interfere with them given 
that Attachment M-2s fall within transmission owner filing rights under FPA Section 205.39 The 
 
37 Id. at 107. 
38 Id. at 108. 
39 See supra Part IV; 16 U.S.C. § 824(b)(1) (explaining FPA’s jurisdictional bright line); cf. Tri-State Generation and 
Transmission Association, Inc., 196 FERC ¶ 61,127 (2026) (approving proposal to “allocate the cost of interconnection 
facilities and any additional network upgrades that a transmission provider directly assigns to Tri-State Merchant to 
the Utility Member, who may elect to pass those costs directly to its HIL Customer.”); Hughes v. Talen Energy Mktg., 
LLC, 578 U.S. 150, 153 (2016) (“The [FPA] . . . vests in [FERC] exclusive jurisdiction over wholesale sales of 
electricity in the interstate market” which is “a domain Congress reserved to FERC alone.”); South Carolina Pub. 
Serv. Auth. v. FERC, 762 F.3d 41, 84-87 (D.C. Cir. 2014) (in the electric transmission context, FERC “has ‘clear’ 
authority to reallocate capacity and production costs.”).

18 
 
methods for determining RBO values are analogous to the methods for determining NSPL and 
PLC contributions because they each require granularly determining retail customers’ 
contributions to a category of wholesale costs. Because the methods for determining RBO values 
are—for jurisdictional purposes—analogous to and indistinguishable from equivalent methods for 
determining NSPL and PLC contributions,40 this same legal analysis and conclusion naturally 
extend to the methods for determining RBO values that will be assigned to individual retail 
customers/data centers for purposes of PJM allocating RBP costs to LSEs serving those retail 
customers. A FERC decision providing that the states can oversee the RBO value methodologies, 
while FERC retains exclusive jurisdiction to oversee the PLC/NSPL value methodologies, would 
result in conflicting FPA interpretations and would therefore produce an unjust or absurd result.41 
Given the above, FERC can declare that it has exclusive jurisdiction to oversee RBO 
methods and find PJM’s cost allocation proposal regarding RBO methods unjust and unreasonable 
given that PJM proposes that state utility commissions determine and approve the RBO methods. 
As further relief, FERC should require jurisdictional transmission owners within PJM to submit 
additional 205 tariff filings based on this docket to propose the RBO method for determining 
individual retail customers’ RBO values within their respective transmission zones. As further 
relief, FERC should mandate that the transmission owners make the 205 filings as attachments to 
the PJM tariff and not permit such filings to be voluntary. The PA OCA further requests that FERC 
mandate that all jurisdictional transmission owners within PJM make Attachment M-2 filings for 
 
40 Cf. Scott Brewer, Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by 
Analogy, 109 HARV. L. REV. 925, 936 (1996) (“[E]xemplary, analogical reasoning is . . . thoroughly familiar - in 
Anglo-American legal systems, anyway - in statutory and constitutional cases.” (citing California v. Carney, 471 U.S. 
386 (1984)). 
41 Ramaprakash v. FAA, 346 F.3d 1121, 1125 (2003) (“An agency’s failure to come to grips with conflicting precedent 
constitutes ‘an inexcusable departure from the essential requirement of reasoned decision making.’” 
(quoting Columbia Broad. Sys. v. FCC, 454 F.2d 1018, 1027 (D.C. Cir. 1971))).

19 
 
PLC and NSPL methods, as this would improve transparency over cost allocation of capacity, 
transmission, and RBP costs within PJM.   
2. 
Option 2: Relinquish exclusive jurisdiction over PLC methodologies; 
FERC can declare that states have exclusive jurisdiction to determine PLC 
and NSPL methods, and by extension the proposed RBO method, and require 
Electric Distributors that are signatories to the RAA to report them to PJM. 
It is undisputed that FERC’s jurisdiction covers the act of PJM allocating wholesale costs 
to LSEs (i.e., by PJM summing the capacity/transmission obligations of all the retail accounts that 
the LSE serves based on PLC/NSPL values and assigning the aggregate costs to the LSEs). 
However, PJM’s filing raises the question of whether FERC’s jurisdiction rightfully reaches down 
to the methods for determining PLC/NSPL inputs, and by extension the methods for determining 
the RBO inputs. This question raises confusion about federal and state roles withing the FPA’s 
cooperative federalism, and about where the dividing lines of jurisdiction properly rest. PJM’s 
filing suggests that the answer is not that everything is FERC jurisdictional up to the point where 
PJM allocates to the LSEs. 
Indeed, this question recognizes that the PLC/NSPL/RBO methods are inputs to PJM’s cost 
allocation methods for capacity, transmission, and RBP costs, respectively. They are not PJM cost 
allocation methods in and of themselves. As inputs to PJM’s cost allocation methods for wholesale 
capacity and transmission costs, they are developed using individual retail customer data. As 
inputs, they assign values to individual retail customers that follows the individual retail customers 
as the customers shop among state-licensed competitive suppliers and default suppliers within a 
state. As inputs, they directly and substantially impact retail cost allocations of capacity and 
transmission costs to retail customers, 
Moreover, in establishing the PLC/NSPL methods, it is curious how transmission owners, 
which do not legally have direct relationships with retail customers from a rates perspective, would

20 
 
be the ones with the information to establish the methods for determining PLC/NSPL values for 
retail customers. It would seem, as PJM suggests, that individual Electric Distributors and state 
utility commissions are simply in a better position to establish methods to determine 
PLC/NSPL/RBO values that get assigned to retail customers, given that the Electric Distributors, 
not transmission owners, serve retail customers pursuant to state utility commission-approved 
tariffs, which establish the rate classifications that retail customers belong in. Additionally, Electric 
Distributors, not transmission owners, have granular information about retail customers within 
their borders. Accordingly, PJM’s proposal raises the question of whether the methods for 
determining and assigning PLC/NSPL/RBO values to individual retail customers is exclusively a 
state not federal power because state utility commissions have the authority to protect their retail 
customers by assigning these values recognizing state utility commission-approved tariffs and rate 
classifications.  
Furthermore, if this act of determining PLC/NSPL/RBO values and assigning them to 
individual retail customers is exclusively a state power, cooperative federalism would necessitate 
that state utility commission oversee the Electric Distributors’ determinations of the methods and 
that Electric Distributors, as a condition of being a signatory to the RAA, be required to report 
them to PJM so that PJM can perform its function to allocate wholesale capacity and transmission 
costs. 
Based on the above, if the methods of determining NSPL and PLC contributions are not 
rightfully transmission owner-determined under the FPA, those methods are not FERC 
jurisdictional and hence states can exercise jurisdiction over them. However, because the methods 
for determining RBO values are—for jurisdictional purposes—analogous to and indistinguishable

21 
 
from equivalent methods for determining NSPL and PLC contributions,42 this same legal analysis 
and conclusion would naturally extend to the methods for determining RBO values that PJM 
proposes will be assigned to individual retail customers/data centers for purposes of PJM allocating 
RBP costs to LSEs serving those retail customers. By introducing a new interpretation of FERC’s 
statutory authority under the FPA, PJM’s proposal would require complicated changes to PLC and 
NSPL methods that utilities have filed in Attachment M-2 of PJM’s Tariff.  
To depart from prior determinations, FERC must use reasoned decision making.43 PJM’s 
filing and the PA OCA’s Protest offers FERC a rationale for departing from its prior decisions over 
PLC/NSPL methods and declaring state jurisdiction to oversee and determine the methods for 
determining PLC/NSPL methods and by extension the RBO method proposed in PJM’s filing.  
If FERC believes that states have exclusive authority to oversee Electric Distributors’ 
determination of PLC/NSPL/RBO values, it should declare that unequivocally and provide 
reasoned decision making in doing so. As further relief, FERC should direct and oversee an orderly 
timely transition to replace the Attachment M-2 methodologies for setting PLC/NSPL values with 
Electric Distributor-reported methods. FERC and PJM should require Electric Distributors, as 
signatories to the RAA, and as a condition of the RAA, to report their state or state utility 
commission-approved PLC/NSPL/RBP value methodologies to PJM. PJM should only accept 
from Electric Distributors the state or state utility commission-approved tariffs or orders 
establishing the PLC/NSPL value methodologies for the Electric Distributors’ borders. 
 
42 Cf. Scott Brewer, Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by 
Analogy, 109 HARV. L. REV. 925, 936 (1996) (“[E]xemplary, analogical reasoning is . . . thoroughly familiar - in 
Anglo-American legal systems, anyway - in statutory and constitutional cases.” (citing California v. Carney, 471 U.S. 
386 (1984)).  
43 See Leggett & Platt, Inc. v. NLRB, 988 F.3d 487, 494 (D.C. Cir. 2021) (“Courts have long recognized that ‘any 
agency’s unexplained departure from prior agency determinations is inherently arbitrary and capricious in violation 
of APA § 706(2)(A).’” (citation omitted)); see also Loper Bright Enters. v. Raimondo, 603 U.S. 369, 388 (2024) 
(quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)) (giving weight to agency statutory interpretation’s 
“consistency with earlier and later pronouncements”).

22 
 
3. 
Option 3: Establish a new jurisdictional category for PLC 
methodologies for RBOs; FERC can legally distinguish PJM’s proposal for 
state utility commissions to determine the RBO method from the PLC and 
NSPL methods and declare that state utility commissions have exclusive 
jurisdiction to determine and approve the methods for determining RBO 
values for purposes of PJM cost allocation of RBP obligations to LSEs. 
The PA OCA has not identified a way to legally distinguish the RBO method from the PLC 
and NSPL methods that are currently under FERC jurisdiction; hence, this Protest addresses the 
first two options. Importantly, if FERC decides that the RBO value methodology used by PJM for 
RBP cost allocation is distinguishable from the PLC/NSPL value methodologies used for 
capacity/transmission cost allocation, FERC must expressly declare that states have jurisdiction 
over the RBO methods. Otherwise, without a clear jurisdictional path forward, when this issue 
comes before state utility commissions, such commissions could find that they lack authority to 
determine the RBO methods, resulting in this important issue not advancing with greater clarity as 
to the details defining the RBO method. The result will be to default to PJM’s backup plan, which 
is allocating RBP costs to all LSEs PJM-wide on a pro rata basis using existing PLC methods. 
However, cost allocation to LSEs on a pro rata basis using PLC values is unjust and unreasonable 
because it will likely result in non-large load customers being allocated RBP costs despite these 
ratepayers not having caused these costs.  
D. 
FERC should adopt Option 1 by affirming its exclusive jurisdiction over RBO 
methods and requiring each transmission owner to file Attachment M-2 amendments 
containing their proposed RBO method. 
FERC already exercises exclusive jurisdiction over PLC and NSPL methods that are 
indistinguishable from RBO methods for jurisdictional purposes, and FERC should expressly 
include RBO methods within this existing jurisdiction. FERC’s existing jurisdiction manifests at 
the state level in unavoidable ways. For example, the PA PUC interpreted FERC’s “jurisdiction

23 
 
over NITS charges and the methodology used to calculate NSPLs” to be “exclusive.”44 And 
FERC’s existing jurisdiction shows up at the federal level in unavoidable ways. For example, 
FERC addressed a dispute regarding FirstEnergy’s Attachment M-2—which contains both the PLC 
and NSPL methodologies—by establishing hearing and settlement procedures under the FPA’s 
Section 205 legal standard.45 Attachment M-2 falls under Section 205 because it is a filed rate 
within PJM’s governing documents.46 
The methods for determining RBO values are analogous to the FERC-jurisdictional 
methods for determining NSPL and PLC contributions because they each require granularly 
determining retail customers’ contributions to a category of wholesale costs. Because the methods 
for determining RBO values are—for jurisdictional purposes—analogous to and indistinguishable 
from equivalent methods for determining NSPL and PLC contributions,47 existing FERC 
jurisdiction naturally extends to the methods for determining RBO values that will be assigned to 
individual retail customers/data centers for purposes of PJM allocating RBP costs to LSEs serving 
those retail customers. 
If FERC were to insist upon state jurisdiction in this context, that could create cascading 
confusion and litigation risk. By introducing a new interpretation of FERC’s statutory authority 
 
44 PPL DSP V Order, No. P-2020-3019356, 2020 PA. PUC LEXIS 646, *69-74 (Pa. Pub. Util. Comm’n 2020), 
https://www.puc.pa.gov/pcdocs/1687575.docx. 
45 PJM Interconnection, L.L.C., 141 FERC ¶ 61,009, at P 1 (2012); PJM Interconnection, L.L.C., 144 FERC 
¶ 63,011, at P 24 (2013) (“[t]he primary issue underlying the Partial Settlement [was] whether Attachments M-1 and 
M-2 are just and reasonable, and not unduly discriminatory.”). 
46 See 16 U.S.C. § 824d(d) (“[N]o change shall be made by any public utility in any such rate, charge, classification, 
or service, or in any rule, regulation, or contract relating thereto, except after sixty days’ notice to the Commission and 
to the public.”); see also Okla. Gas and Elec. Co. v. FERC, 11 F.4th 821, 829 (D.C. Cir. 2021) (identifying filed rate 
doctrine extends to matters directly affecting rates); PJM Power Providers Group v. FERC, 96 F.4th 390, 394 (3d. Cir. 
2024) (summarizing filed rate doctrine and applying it to PJM’s Tariff); Duquesne Light Co., 189 FERC ¶ 61,181, at 
n.109 (2024) (citing 16 U.S.C. § 824d(d))). 
47 Cf. Scott Brewer, Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by 
Analogy, 109 HARV. L. REV. 925, 936 (1996) (“[E]xemplary, analogical reasoning is . . . thoroughly familiar - in 
Anglo-American legal systems, anyway - in statutory and constitutional cases.” (citing California v. Carney, 471 U.S. 
386 (1984)).

24 
 
under the FPA, state jurisdiction would render the RBO legally vulnerable and would likely require 
complicated changes to PLC and NSPL methods that utilities have filed in Attachment M-2 of 
PJM’s Tariff.48 
A clear expression of FERC jurisdiction over transmission owners’ RBO methodologies—
filed within mandatory Attachment M-2s—is the most legally durable way to resolve the legal and 
regulatory confusion identified in this Protest. Accordingly, FERC should affirm its exclusive 
jurisdiction over RBO methods and require each transmission owner to file Attachment M-2 
amendments containing their proposed RBO method. To the extent a transmission owner does not 
currently have an Attachment M-2 on file, FERC should require them to make the filing so that 
the RBO and PLC methodologies are transparent and publicly available. 
This is the just and reasonable result. 
 
 
 
48 Ramaprakash v. FAA, 346 F.3d 1121, 1125 (2003) (“An agency’s failure to come to grips with conflicting precedent 
constitutes ‘an inexcusable departure from the essential requirement of reasoned decision making.’” 
(quoting Columbia Broad. Sys. v. FCC, 454 F.2d 1018, 1027 (D.C. Cir. 1971)); see also Leggett & Platt, Inc. v. NLRB, 
988 F.3d 487, 494 (D.C. Cir. 2021) (“Courts have long recognized that ‘any agency’s unexplained departure from 
prior agency determinations is inherently arbitrary and capricious in violation of APA § 706(2)(A).’” (citation 
omitted)); Loper Bright Enters. v. Raimondo, 603 U.S. 369, 388 (2024) (quoting Skidmore v. Swift & Co., 323 U.S. 
134, 140 (1944)) (giving weight to agency statutory interpretation’s “consistency with earlier and later 
pronouncements”).

25 
 
VI. 
Conclusion 
In conclusion, FERC should find that PJM’s cost allocation proposal, within its RBP Tariff 
filing, is unjust and unreasonable because it presents a jurisdictional problem and insufficiently 
defines the Reliability Backstop Obligation method. FERC should remedy the unjust and 
unreasonable tariff by (1) declaring FERC’s exclusive jurisdiction to determine RBO value 
methodologies; (2) determining that PJM’s cost allocation proposal for RBP obligations is unjust 
and unreasonable because it insufficiently defines the RBO method; (3) requiring jurisdictional 
transmission owners within PJM to submit additional filings based on this docket to further define 
the RBO method for determining individual customer’s RBO values within each transmission 
owner zone; (4) mandating that the transmission owners make conforming Attachment M-2 tariff 
filings under FPA Section 205, containing the RBO value methodologies (and PLC/NSPL value 
methodologies); and (5) setting a time frame to resolve protests and comments to the transmission 
owners’ tariff filings regarding the RBO methodologies. 
 
 
 
 
 
 
 
 
Pennsylvania Office of Consumer 
Advocate 
555 Walnut Street 
5th Floor, Forum Place 
Harrisburg, PA 17101-1923 
717-783-5048 
 
Dated: August 21, 2026  
Respectfully submitted, 
 
Counsel for: 
Darryl Lawrence 
Pennsylvania Consumer Advocate 
 
/s/ Melanie Joy El Atieh   
Melanie Joy El Atieh 
Deputy Consumer Advocate  
PA Attorney ID # 209323 
MElAtieh@paoca.org 
 
Josiah Harmar 
Assistant Consumer Advocate 
PA Attorney ID # 338426 
JHarmar@paoca.org

App’x A -1 
 
Appendix A 
Protest of Pennsylvania Office of Consumer Advocate 
ER26-3380 
Differentiating Peak Load Contribution Assignments from Cost Allocation  
This appendix attempts to graphically describe the existing processes for assigning capacity and 
transmission peak load contribution megawatts (MWs) and allocating costs (Figure 1 and Figure 
2), and highlights the jurisdictional challenge raised in PJM’s backstop auction filing (Figure 3).  
Figure 1 
 
Figure 1 - MW Obligation Jurisdiction 
As shown in Figure 1, the assignment of MW obligations from the RTO to the Zone/Area, and 
then to LSE and to retail customers currently happens through PJM’s application of the Peak Load 
Contribution (PLC) and Network Service Peak Load (NSPL) methods for capacity and 
transmission service, respectively.  While PJM utilizes PLC and NSPL in settlements with LSEs, 
the underlying PLC/ NSPL methods are established, and voluntarily filed as attachment M-2 to the 
PJM OATT, by the transmission owners.  All of these actions are under federal jurisdiction, 
including: 1) the assignment of MW obligations from Region to Zone/Area, 2) the assignment of 
MWs from Zone/Area to LSE, and importantly, 3) the assignment of MWs from the LSEs to the

App’x A -2 
 
retail customers, per Amtrak v PPL.  In step #3, PJM’s OATT dictates the mechanism according to 
which MW obligations are assigned to the retail customer through the application of the 
transmission owner’s PLC/ NSPL method. Then the EDC sums these MWs across each LSE’s 
retail customers and reports the summation to PJM for purposes of MW obligation allocation to 
that LSE.  
Figure 2 
 
Figure 2 - State Cost Allocation 
While federal jurisdiction oversees the process and methods for the assignment of MW obligations 
and LSE-level summation and reporting to PJM to effectuate cost assignment, the rates charged to 
retail customers for recovery of those revenues is state jurisdictional through either (1) retail utility 
tariffs, which may include state approval of direct pass through of federal rates, or (2) retail 
contracts between state-licensed competitive suppliers and retail consumers. This is shown in 
Figure 2 in the orange box in the bottom right corner – governed by state rates and rate design. 
This extends to the need for explicit approval from the PA PUC for Electric Distribution Company 
default service tariffs to pass through federal rates – such as Network Integration Transmission 
Service (NITS) and Transmission Expansion Charges (TEC) – to retail customers.

App’x A -3 
 
Figure 3 
 
Figure 3 - Concern Over State Apportionment of MW Obligation 
OCA’s concern centers over the lack of state jurisdiction to establish an as-yet-to-be-developed 
method of assigning reliability backstop obligation (RBO) MWs to retail customers.  This is shown 
in the lower lefthand corner of Figure 3.  As compared to Figure 1 and Figure 2 – where assignment 
of MWs is subject to federal jurisdiction per Amtrak v PPL – PJM now proposes to have states 
establish this method. If states lack the jurisdiction to establish this method, then PJM will 
implement its backstop cost allocation method that will allocate reliability backstop costs to all 
consumers based on the PLC method. This result – which is outside of the state’s control due to 
jurisdictional boundaries – would be unjust and unreasonable.

1 
 
 
CERTIFICATE OF SERVICE 
I certify that today I served this document on this proceeding’s official service list. 
 
Harrisburg, Pennsylvania; August 21, 2026. 
 
/s/ Josiah Harmar 
 
Josiah Harmar 
Assistant Consumer Advocate 
PA Attorney ID # 338426 
JHarmar@paoca.org