ER26-3380-000 · 2026-08-21 · Office of the Ohio Consumers' Counsel

The Ohio Consumers' Counsel submits Protest and Request for Rejection of Filing or in the Alternative for Evidentiary Hearings and/or Settlement Proceedings re PJM Interconnection, L.L.C.’s Reliability Backstop Procurement filing

UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
PJM Interconnection, L.L.C.  
) 
Docket No. ER26-3380-000 
PROTEST AND REQUEST FOR REJECTION OF FILING  
OR IN THE ALTERNATIVE FOR EVIDENTIARY HEARINGS 
AND/OR SETTLEMENT PROCEEDINGS BY 
OFFICE OF THE OHIO CONSUMERS’ COUNSEL 
Maureen Willis  
Ohio Consumers’ Counsel 
Angela O’Brien 
Deputy Consumers’ Counsel  
Office of the Ohio Consumers’ Counsel 
65 East State Street, Suite 700 
Columbus, Ohio 43215 
Telephone: (614) 466-9531 
angela.obrien@occ.ohio.gov
Denise C. Goulet 
McCarter & English, LLP 
1301 K Street, N.W. 
Suite 1000 West 
Washington, D.C. 20005 
(202) 753-3400 
dgoulet@mccarter.com
Special Counsel to the Ohio Office of the Attorney 
General for the Office of the Ohio Consumers’ 
Counsel 
August 21, 2026

UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
PJM Interconnection, L.L.C. 
) 
Docket No. ER26-3380-000 
PROTEST AND REQUEST FOR REJECTION OF FILING  
OR IN THE ALTERNATIVE FOR EVIDENTIARY HEARINGS 
AND/OR SETTLEMENT PROCEEDINGS BY 
OFFICE OF THE OHIO CONSUMERS’ COUNSEL 
PJM Interconnection, L.L.C.’s (“PJM’s”) application in this case to implement a one-
time Reliability Backstop Procurement (“RBP”) program to acquire new generating capacity 
needed to serve forecasted Artificial Intelligence (“AI”) and other large data center loads should 
not be adopted.1 It will unreasonably shift the risks and costs associated with acquiring that new 
capacity from the data center loads to existing consumers in Ohio and elsewhere in PJM.  The 
Federal Energy Regulatory Commission (“FERC”) should reject the filing because it fails to 
protect Ohio consumers and other consumers in PJM from the risks associated with this new 
forecasted load, and from the associated costs of serving these loads.  PJM’s proposal will result 
in excessive, unjust, unreasonable and unduly discriminatory and preferential rates for existing 
consumers.   
In the alternative, FERC should set PJM’s filing for evidentiary hearings and/or 
settlement proceedings so that PJM and stakeholders can adequately consider and vet alternative 
proposals for acquiring needed new supply for AI and other large data center loads, including 
1 This Protest is submitted pursuant to Rule 211 of the Federal Energy Regulatory Commission Rules of Practice 
and Procedure, 18 C.F.R. § 385.211.

2 
proposals prepared by the Independent Market Monitor for PJM (“IMM”) and other consumer 
representatives.  Unlike PJM’s proposal in this case, the IMM’s and other parties’ competing, 
well-founded proposals would properly guard against such unreasonable costs shifts and 
excessive rates for existing consumers in Ohio and elsewhere in PJM.      
The Office of the Ohio Consumers’ Counsel is the statutory representative of millions of 
Ohio residential utility consumers, per R.C. Chapter 4911.  OCC actively advocates for Ohioans 
in numerous state and federal regulatory proceedings, including proceedings before FERC. OCC 
timely intervened in this case on August 14, 2026.2 Ohio residential consumers may be adversely 
affected if FERC accepts PJM’s filing in this case. PJM’s proposal would require them to pay for 
resource inadequacy risks and related costs that they did not cause, i.e., risks and costs associated 
with obtaining adequate generating capacity to satisfy the loads of new AI and large data center 
customers.   
I.
BACKGROUND 
PJM submitted in this docket on July 31, 2026, a proposal for implementing a one-time 
procurement of new generating capacity that PJM represents is needed to address “resource 
adequacy challenges” in the PJM region.3  PJM states these shortages are associated with 
insufficient commitments of capacity in the Reliability Pricing Mechanism (“RPM”) auctions for 
the 2027/2028 and 2028/2029  Delivery Years.4  PJM further represents that the insufficiency of 
resources in these RPM auctions is “primarily driven by the unprecedented addition in recent 
2 Doc-less Motion to Intervene in PJM Interconnection, L.L.C., Docket No. ER26-3380-000, filed by Office of the 
Ohio Consumers’ Counsel, available on FERC’s e-library website as Accession Document No. 20260814-5066.   
3 Reliability Backstop Procurement to Address Resource Adequacy Concerns Stemming from Large Loads, PJM 
Interconnection, L.L.C., Docket No. ER26-3380-000, available on FERC’s e-library website as Accession 
Document No. 20260731-5214 (“RBP Application”). 
4 RBP Application at 1.

3 
years of large loads, most notably AI and other data centers, in the PJM region.”5  PJM states 
that the proposal is consistent with the following goals agreed to by the National Energy 
Dominance Council (“NEDC”) and 13 governors of the PJM states: 

procure new capacity resources through a backstop auction; 

that auction should commence no later than September 2026; 

the auction should provide 15-year price certainty for new capacity resources;  

the program should “allocate the cost of any new capacity procured through the 
backstop auction to Load Serving Entities (“LSEs”) with new data centers 
located in their regions that have not self-procured new capacity or agreed to be 
curtailable;6 and 

the program should allocate any remaining costs associated with the shortage to 
LSEs based on their remaining net shortages.7
PJM states that its region hosts the largest concentration of data center load in the world, 
and that its forecasted load is expected to increase by 32 gigawats (“GW”) between 2024 and 
2030, with 30 GW driven solely by the large load data centers.  It also asserts that the shortfall in 
capacity cleared to meet the resource adequacy needs of the region has grown for each of the 
past three RPM auction Delivery Years, which includes the 2028/2029 Delivery Year auction, 
run in July of this year.8
PJM proposes to implement a one-time auction along the lines of its existing RPM 
backstop auction process to secure the difference between the RPM auction results for the 
5 Id.
6 Id. at 2 (emphasis in original); see also Statement of Principles Regarding PJM, National Energy 
Dominance Council, 1 (Jan. 16, 2026), available at https://www.energy.gov/documents/statement-principles-
regarding-pjm[https://perma.cc/35HJ-W56E].  This document is referred to in the RBP Application as “NEDC/PJM 
Governors’ Principle.” PJM states that the governors support includes the 13 states of Delaware, Illinois, Indiana, 
Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West 
Virginia, and the District of Columbia. 
7 RBP Application at 2, 9 (emphasis added).. 
8 Id. at 6-7.

4 
2028/2029 Delivery Year and the amount needed to serve forecasted load for that year. The 
auction would obtain commitments of new capacity from eligible resources for a fixed term of 
up to 15 years, starting with the 2028/2029 Delivery Year and ending with the 2042/2043 
Delivery Year.9 The commitment term for the resources acquired in the auction that are 
scheduled to commence service after the 2028/2029 Delivery Year will be shortened by a 
commensurate number of years, as no commitment will extend beyond the 2042/2043 Delivery 
Year.10 In effect, PJM proposes to allow planned new generating resources to participate in the 
auction even if their in-service date in beyond the 2028/2029 Delivery Year, so long as those 
resources are in-service by June, 2032.11
PJM proposes to limit the auction to new load coming on-line in 2028/2029 that does not 
bring its own capacity resources sufficient to serve its needs.12  “In other words, the RBP is a 
one-time mechanism that will only procure the capacity necessary to cover any remaining 
shortfall from the 2028/2029 BRA after PJM has accounted for new capacity being brought by 
new load or that otherwise qualify for a limited opt-out from the RBP.”13
The proposed auction will use a RTO region-wide target, and PJM would enter into long-
term agreements with the suppliers to purchase that capacity.14  PJM proposes to pay each seller 
its offer bid, less any revenues the seller is entitled to receive for commitment of the same 
capacity in the regular RPM auctions.15  New loads can acquire their own capacity by entering 
9 Id. at 8. 
10 Id.
11 Id. at 51. 
12 Id. at 26. 
13 Id.
14 Id. at 28-29, 31.   
15 Id. at 29.

5 
into bilateral contracts for new supply, so long as that new supply is not already committed in an 
RPM auction.16  Sellers into the auction will be responsible for all actual Network Upgrade costs 
incurred to interconnect their resources to the grid.17
PJM is not proposing to match acquired supply to individual new large loads but rather 
proposes to allocate costs to Electric Distributor Company (“EDC”) zones where the new large 
loads are located, and then to LSEs within that zone that are short of supply commitments.18
PJM then relies on the states to allocate these costs to retail customers within those LSE areas.19
If a state does not report obligations for new load within LSE regions in their jurisdictions, then 
the zonal RBP charges will be to all consumers within the relevant zone.20
If generators bidding in new supply fail to bring their new resources on-line as promised 
in the offer, PJM proposes to impose a penalty on those entities equal to 20% of the proposed bid 
price.21  If the new resources cannot come on-line within three years of the auction in which they 
cleared, PJM will cancel the contract with that supplier. 22  PJM proposes that the shortage 
penalties will be allocated to load.23 If LSEs default on payments, then PJM proposes that other 
LSEs in the same EDC zone as the defaulting LSE that are short in that same year will pay the 
amounts due.24
16 Id. at 33. 
17 Id. at 56.   
18 Id. at 96. 
19 Id. at 97-104. 
20 Id. at 99 (“[I]f 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.”).
21 Id. at 60. 
22 Id. at 61.   
23 Id.
24 Id. at 89.

6 
II.
PROTEST 
OCC protests PJM’s filing because it will not minimize costs for consumer, nor 
accomplish its objectives of acquiring new generating capacity in the region in a manner that 
allocates risks and costs for the new capacity to those causing the costs to be incurred, i.e., AI 
and large data center loads.  Instead, the proposal will result in shifting these risks and costs to 
existing consumers who have not caused the need for new generating capacity and who are 
unlikely to use the generating capacity provided by these new resources.  The risks and costs 
include the realistic uncertainty that either generating capacity or the forecasted AI or large data 
center loads will not show up.  Moreover, the proposal inappropriately and unreasonably relies 
on state laws and regulations, that may not exist in many states, to ensure that these costs and 
risks in fact are borne by the AI and large data center loads.  
Ohio has no statutes governing allocation of large load-related generation capacity costs 
among retail customers.  And while there is one case in which the Public Utilities Commission of 
Ohio (“PUCO”) has directed allocation of some of these large load driven costs and risks to the 
large load data center customers, there are no uniform regulations and tariffs that apply to all 
utilities and LSEs in the state.25  Thus, PJM’s proposed RBP program leaves many Ohio 
consumers at significant risk of bearing costs associated with these new large data center loads.  
In contrast, the backstop procurement proposal prepared by the PJM IMM and proposals 
discussed by other stakeholders in PJM would directly allocate the risks and costs of this new 
25 In the Matter of the Application of Ohio Power Company for New Tariffs Related to Data Centers and Mobile 
Data Centers, Opinion and Order (Jul. 9, 2925), in PUCO Case No. 24-508-EL-ATA; see also In the Matter of the 
Application of Ohio Power Company for New Tariffs Related to The Standard Service Offer Service for Data Center 
Load, Finding and Order (Aug. 5, 2026) in PUCO Case No. 26-113-EL-ATA.  While there are additional matters 
pending or contemplated to implement specific data center load tariffs for American Transmission Systems, Inc., 
Dayton Power and Light Company and Duke Energy Ohio, to date the PUCO has not adopted orders establishing 
programs for these utilities.

7 
generating capacity to the new AI and large data center loads, while fulfilling the resource 
adequacy needs of the region.    
OCC recognizes that PJM has proposed a myriad of rules for the RBP auction intended to 
mitigate market power and control prices that OCC has not described here.  While OCC is not 
addressing in this protest every serious flaw raised by the PJM RBP proposal, OCC notes that the 
overall RBP design is unlikely to mitigate market power or achieve the intended objective of 
ensuring resource adequacy in a manner consistent with cost allocation principles and in a 
manner that will result in just, reasonable and not unduly discriminatory and preferential rates for 
consumers.  OCC generally supports the protest submitted in this docket by the Maryland Office 
of People’s Counsel and other consumer advocates on issues not addressed directly in this 
Protest.   
A. PJM’s RBP proposal will not ensure just, reasonable rates for consumers; 
nor will it prevent unduly discriminatory or preferential rates for consumers. 
PJM’s RBP proposal will not constrain capacity prices resulting from the RBP auction, 
and will not protect existing consumers from the excessive costs and risks associated with those 
auctions.  One example is PJM’s proposed pay-as-bid approach for settling the RBP auction.26
PJM argues that this proposal is reasonable because the auction will not be procuring a uniform 
commodity and a single clearing price would “transfer inframarginal rents to every seller priced 
below the most expensive accepted offer.”27 These are extraordinary claims in light of PJM’s 
support for the existing RPM rules that use a single clearing price approach.   
FERC has long found the existing offer and clearing price rules for the existing RPM 
auctions just, reasonable, and not unduly discriminatory or preferential.  Those RPM auctions 
26 Id. at 65. 
27 Id. at 65-66.

8 
similarly procure non-uniform commodities (new and existing generating capacity, storage 
resources, intermittent resources, demand resources, etc.) as proposed for the RBP auction.  They 
also pay the single clearing price to all resources clearing at or below the clearing bid, thus 
allowing all inframarginal units to receive payments above their offer bids.  PJM’s purported 
explanation for different rules for the RBP auctions does not address why it now needs to use a 
clearing approach that is diametrically opposite what it has supported for over 20 years in its 
RPM auctions.  Mere statements as to what the new proposal would accomplish without an 
explanation for why the disparate treatment is needed or appropriate is not consistent with 
judicial mandates for reasoned departures from existing rules.   
Additionally, PJM argues that its proposed “maximum willingness-to-pay cap” will 
provide “a direct limit on procurement costs even in the absence of offer mitigation.”28
PJM proposes to set the cap at the maximum price for the existing RPM auctions of 
$555/MW/day, arguing that this mitigates market power for consumers because  
“competitive dynamics are expected to encourage suppliers to submit competitive offers 
that more closely reflect their willingness to provide service.”29
That too is an extraordinary claim given that PJM is proposing this one-time RBP 
auction because there is a 6,800 MW scarcity of supply in the 2028/2029 Delivery Year.  
The $555/MW-day (unforced capacity) offer cap is based on scarcity conditions and is 
significantly higher than the clearing price in the 2028/2029 auction of $325/MW-day 
price cap, which also reflects the scarcity conditions in that auction.30  Exactly what is it 
28 Id. at 68.   
29 Id. at 68-69. 
30 Id. at 62 for current $555/MW-day offer cap; see also 2028/2029 Base Residual Auction Report at 3 (Jul. 14, 
2026), available at https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2028-2029/2028-
2029-bra-results-report.pdf.

9 
that will constrain supplier incentives to bid at the price cap instead of their marginal 
costs in this auction?  The answer is: nothing.  Current scarcity market conditions in 
PJM’s capacity markets simply do not provide the tempering influence needed to mitigate 
market power, and as is anticipated in non-scarce markets.  PJM has not demonstrated 
that its RBP proposal is designed to sufficiently mitigate market power and produce 
prices for consumers that are just, reasonable, and not unduly discriminatory or 
preferential.  Instead, this market design appears guaranteed to result in excessive electric 
capacity prices for consumers in PJM that will be allocated the costs of this auction.   
One of the most glaring flaws in PJM’s proposal is that by allowing resources that will 
not come on-line until after the 2028/2029 Delivery Year to participate, it will not ensure 
resource adequacy for the 2028/2029 Delivery Year – the year that new generating capacity is 
most needed.  PJM proposes to accept offers from planned generating resource owners whose 
planned generation have commercial operation dates beyond the 2028/2029 Delivery Year, so 
long as the resources have an in-service date no later than 2032.31  PJM states that it is necessary 
to accept such offers because it is unlikely there are sufficient planned resources with in-service 
dates that line up with the 2028/2029 Delivery Year.32 PJM maintains that allowing resources 
with in-service dates beyond that Delivery Year to participate in the auction will mitigate 
scarcity in the auction by increasing the otherwise available supply.33  PJM proposes that any 
capacity shortfalls in the interim will be addressed by curtailment policies being proposed in 
31 RBP Application at 51.    
32 Id. at 68.   
33 Id.

10 
newly filed PJM Docket No. 26-3515-000, i.e., the Interim Resource Adequacy Service 
(“IRAS”) proposal.34
OCC agrees there is merit in PJM’s concern that scarcity conditions will exist in the RBP 
auction.  It is for this reason that sufficient market power mitigation rules must be in place to 
protect those paying the costs of this auction.  As explained above, PJM’s proposal fails to 
ensure such mitigation.  The proposal’s reliance on planned new generation resources that will 
not be in-service by the 2028/2029 Delivery Year for market power mitigation does not address 
concerns that the RBP auction is likely to clear at the extremely high price cap due to shortage 
conditions.  Instead, it means that resources available in the 2028/2029 Delivery Year are still 
likely to be well short of supply needed for resource adequacy if the forecasted AI and large data 
center loads come on-line as forecasted in that timeframe.   
PJM uses the scarcity concern as its main reason for rushing a FERC decision on the RBP 
proposal.35  However, for the reasons explained in this protest, that proposal is unlikely to result 
in reasonable costs for consumers and unlikely to adequately protect existing consumers from 
excessive, unjust and unreasonable rates.  PJM’s admits  that its proposal is unlikely to resolve 
the scarcity conditions for the near future because at least some of the newly-acquired generating 
resources will not be in service in time for the 2028/2029 Delivery Year. So, there is no reason 
for FERC to rush to put PJM’s proposed RBP auction in place by September 2026 as PJM 
requests.  Instead, FERC should set PJM’s proposed auction design for evidentiary hearings 
and/or settlement proceedings and provide stakeholders and consumers an opportunity to explore 
options that would better ensure resource adequacy at just and reasonable rates.  The IRAS 
34 Id. at 48.   
35 Id. at 3-9.

11 
curtailment proposal in Docket No. ER26-3515 could better address timing concerns resulting 
from delaying implementation of a backstop procurement auction.    
OCC is also concerned that PJM’s RBP proposal does little to rectify or minimize the 
excessive costs existing consumers in Ohio and elsewhere in PJM are paying due to RPM 
auctions that have already been run for prior years. The IMM has calculated that data center 
demand increased capacity costs to other PJM customers by approximately $23.1 billion across 
the 2025/2026, 2026/2027, 2027/2028 Base Residual Auctions.36  The $23.1 billion figure is not 
a mere historical artifact of load growth. It reflects a structural outcome of a capacity market in 
which extraordinary new demand (data centers) can raise clearing prices across a much larger 
base of existing capacity (other customers including residential customers). The result is a 
system-wide cost shift that extends far beyond the incremental load that triggered it. The IMM’s 
June 30, 2026 RBP proposal, discussed in section C below, demonstrates that significant reforms 
to PJM’s RBP proposal are needed to stop the historical subsidies already being provided by 
existing consumers to AI and large data center loads.    
Accordingly, the task should be not only to prevent future cost shifts from new data 
center load, but also to evaluate whether and how PJM’s market design can better account for the 
magnitude of subsidies already imposed on existing consumers. Consumer protection requires 
more than prospective reform. PJM and FERC must confront the substantial costs already borne 
by consumers because data-center demand has been incorporated into prior capacity auctions.37
36 Monitoring Analytics, Critical Issue Fast Path Proposed Reliability Backstop Auction Proposal (Jun. 30, 2026), 
available at 
https://www.monitoringanalytics.com/reports/Presentations/2026/IMM%20Backstop%20auction%20design%20pro
posal%20-%20V6%202026.06.19.pdf (“IMM RBP Proposal”). 
37 Similarly, there is concern with the effect that data centers have had on the energy prices in PJM.  Energy prices 
have significantly increased in large part due to the 24 x 7/365 data center energy use pushing the marginal clearing 
unit higher up in the PJM dispatch stack. In 2023, energy costs across PJM averaged $30.23/MWh.  During the first

12 
For transparency regarding the magnitude of the problem, PJM and the IMM should develop a 
standardized accounting of capacity costs attributable to data center demand in each affected 
BRA for the past three to five Delivery Years. 
PJM and FERC should evaluate whether a legacy data center cost allocation and 
consumer credit mechanisms could, consistent with cost causation and other rate principles, 
assign identified legacy costs on a forward-looking basis to the load responsible for driving these 
costs and risks and provide corresponding credits to existing customers that are bearing these 
costs. Such a mechanism should be grounded in demonstrable cost causation and rate principles.  
It should avoid arbitrary assignment of historical costs to unrelated new loads.  And, to the extent 
possible, it should ensure that any recovery amounts are returned to affected non-data center 
customers. Where feasible, PJM should consider transitional charges on identifiable responsible 
loads to recover a portion of legacy costs.  The objective is consumer restitution through 
principled cost allocation.  
B. The RBP proposal will unjustly and unreasonably leave existing consumers 
in Ohio and elsewhere in PJM bearing the risks and costs associated with 
these new AI and large data center load. 
PJM’s RBP proposal does not accomplish the objective of protecting existing consumers 
from the risks and costs associated with procuring new generating capacity for AI and large data 
center loads.  Instead, the proposal is designed to allocate the costs of the auction to all 
consumers in the EDC’s zone where the AI and large data center loads that bring insufficient 
generating capacity with them are located.38  Yet many of those consumers are no more 
seven months of 2026, energy costs across PJM averaged $72.07/MWh.  PJM and FERC should also confront these 
costs and should evaluate whether a legacy cost allocation and customer credit mechanism should be adopted.     
38 Id. at 96-97.

13 
responsible for the incurrence of these costs than are consumers in regions where there is no 
shortage of capacity for AI and large data center loads.   
PJM inappropriately relies on state programs to determine allocation among retail 
consumers within these zones.  In other words, PJM is asking FERC to punt the question of cost 
allocation for these new resources to the states.  However, as indicated earlier in this Protest, not 
all states have statutes that would allocate these costs to the AI and large data centers driving the 
cost incurrence.  As note earlier, Ohio is one such state.  The PUCO has required a special tariff 
to allocate to AI and large data center loads the costs of new generating capacity and other 
resources needed to serve them from only one of four utilities serving retail consumers in Ohio, 
i.e..  American Electric Power.39 No similar protections exist currently for consumers of the three 
other utilities in the state.  There is no guarantee under Oho law that all Oho consumers will be 
protected against the cross-subsidies inherent in PJM’s proposal. It is fundamentally 
unreasonable for PJM to rely on a system of shared state-federal jurisdiction to resolve a 
problem raised directly by its proposed wholesale RBP program.     
PJM’s proposed penalty structure for ensuring that generation suppliers submitting sell 
offers into the RBP auction abide by their offer commitments is similarly unjust, unreasonable, 
and unduly discriminatory and preferential.  While it is reasonable for PJM to propose shortage 
penalties for a supplier’s failure to come on-line by the anticipated commercial operation date 
encompassed in its offer, it is not reasonable for PJM to impose those shortage charges and costs 
on all loads in the EDC and LSE zones experiencing shortages.40  The purpose of shortage 
penalties should be to strongly encourage generation capacity sellers to abide by their 
39 Supra, n.25. 
40 RBP Application at 61 (“Shortfall charges assessed to RBP Resources will be allocated to load”).

14 
commitments to supply power by a date certain.  OCC understands that events can occur to delay 
such commercial operation dates.  But the risks of such events should be borne by those with 
more direct control over such events, i.e., the suppliers themselves.   
Allowing those costs to be transferred to load essentially just shifts the risk that a 
generating resource will be commercially operational to the parties with no control over those 
operations, i.e., the loads that must bear the costs of the power to be generated.  Moreover, that 
shift in risk and costs shields the generators, the entities with at least some control over the 
process of bringing this generation online, from the costs of their actions or inactions.  In the 
event of a supplier’s failure to reach a targeted commercial operation deadline, existing load is 
already bearing a significant portion of that risk by having to forego the needed capacity and 
likely being subjected to curtailment of use.  To impose the shortage charges on those loads, in 
addition to the shortage conditions, is fundamentally unjust, unreasonable and unduly 
discriminatory and preferential.  Such a policy allows the suppliers to escape any financial risk or 
responsibility for their investments.  This violates FERC’s long-held policy of imposing the risk 
of investment on those making the investments and away from loads who have no control over 
those investments.41
Additionally, PJM’s proposal to limit the shortage penalty to 20% of the offer price for 
the capacity is also unjust, unreasonable and unduly discriminatory and preferential in favor of 
suppliers.  The objective of such penalties should be to protect the load that will suffer from the 
capacity shortages in the region.  Electric generation capacity is a fundamental financial and 
41 See, e.g., Wholesale Competition in Regions with Organized Electric Markets, Order No. 719, 125 FERC 61,071 
at P 1 (2009) (Effective wholesale competition protects consumers by providing more supply options, encouraging 
new entry and innovation, spurring deployment of new technologies, promoting demand response and energy 
efficiency, improving operating performance, exerting downward pressure on costs, and shifting risk away from 
consumers.  National policy has been, and continues to be, to foster competition in wholesale electric power 
markets.”).

15 
health necessity for residential, commercial and industrial consumers in today’s economy, 
especially for hospitals, schools, nursing homes and residential homes that have family members 
living on electric-operated life support facilities.  PJM’s proposal to limit the proposed shortage 
penalty to only 1/5th of the cost of the capacity sell offer seriously undervalues the reliance load 
places on resource adequacy.  FERC should reject PJM’s proposed penalties for failure of 
suppliers to live up to their capacity commitments when bidding planned resources into the RBP 
auctions as fundamentally insufficient to protect consumers in Ohio and elsewhere in PJM.
C. The IMM proposed approach to resource adequacy in PJM will ensure 
direct allocation of the risk and costs of needed new generation to the 
responsible AI and large data center loads in the region. 
On June 30, 2026, Monitoring Analytics, the PJM IMM, posted on its website its  
proposal for resolving the resource inadequacy concerns created by the shortages in the 
2027/2028 and 2028/2029 Delivery Years.  The IMM submitted this proposal to the PJM Critical 
Issue Fast Path stakeholder process as an alternative to the PJM RBP proposal.42  As the IMM 
states, “[t]he most important criterion for evaluating proposals to address how to reliably serve 
new data center load is the assignment of the costs and risks associated with LSEs serving data 
center load.”43  The IMM explains that “the failure to exclude new data center load from the 
BRAs [RPM base residual auctions], as PJM proposes, would by definition impose significant 
costs on other customers and therefore violate the basic principle that data center costs should 
not be imposed on other customers.”44
By including AI and large data center loads in the RBP and other RPM auctions, PJM is 
placing all existing consumers in the region at risk of paying for the capacity shortages because 
42 IMM RBP Proposal at 1. 
43 Id.
44 Id.

16 
the costs of RPM and the proposed RBP auctions are to be spread across all consumers in the 
regions that are short regardless of the driving cost causers for those shortages.  Those costs and 
risks include not only the cost of the procured generation, but the risks that both the new 
generating capacity and the forecasted AI and large data center loads will not materialize.   
In contrast, the IMM proposes that LSEs serving the new AI and large data center loads 
enter into 15-year bilateral contracts in which the risks and costs of the new generation to be 
acquired to serve those loads are allocated only to the parties to those contracts.45  The IMM 
explains that this proposal is analogous to the program in which Fixed Resource Requirements 
customers opt-out of the RPM auctions.46  In essence, this proposal establishes a Bring Your 
Own New Generation approach to solve the dire resource inadequacy concerns raised by the 
exponential growth in AI and large data center loads on the PJM system in recent years.47
To the extent that the affected LSEs do not enter into such contracts, the IMM proposes a 
RBP construct that would “run a full single clearing price auction using the RPM capacity 
market clearing model for just data center load.”48 In other words, the IMM proposal would 
create an auction limited to new generating capacity supplies and new AI and large data center 
loads, thus shielding existing consumers from the associated costs and risks imposed by these 
unprecedent new loads. In contrast to PJM’s RBP proposal, existing loads are not affected in any 
way by the auction clearing process. 
Also unlike the PJM proposed RBP, the IMM proposed RBP would include the location 
and MW of the proposed generation that participates, and be based on expected loads for 
45 Id.
46 Id.
47 Id.
48 Id. at 2.

17 
individual AI and large data center customers.49 The resulting contracts between the generation 
supplier and the AI/large data center loads would not allow for transfer of any of the risks or 
costs to existing consumers.50  Thus, in contrast to PJM’s proposal, “the qualifying bilateral 
contracts assign all risks to the bilateral counterparties, and no risks are assignable to EDCs, 
LSEs, PJM or any other customers.”51  The IMM proposal contains additional proposed rules to 
address market power mitigation concerns and other details associated with the auction clearing 
mechanism. 
OCC supports the IMM’s proposal as a just, reasonable, and not unduly discriminatory or 
preferential solution to the recent resource inadequacy concerns associated with the explosion in 
AI and data center load growth on the PJM system.  Unlike PJM’s proposal, the IMM’s approach 
will restrict risks and costs to those entities driving the need for new generating capacity on the 
system.  This in turn better comports with the Seventh Circuit’s cost allocation mandate that 
costs must be allocated in a manner roughly commensurate with cost causation and beneficiaries 
of the proposed new infrastructure.52  Unlike the PJM RBP proposal, the IMM RBP proposal 
provides no loopholes for new generating capacity and AI and large data center loads to escape 
the risks and costs of their ventures, and no recourse to subsidized support from existing 
consumers in PJM.53
49 Id. at 3. 
50 Id. at 4. 
51 Id. at 5. 
52 Ill. Commerce Comm’n v. FERC., 576 F.3d 470, 476 (7th Cir. 2009) (“ICC I”) (FERC is “not authorized to 
approve a pricing scheme that requires a group of utilities to pay for facilities from which its members derive no 
benefits, or benefits that are trivial in relation to the costs sought to be shifted to its members”); Ill. Commerce 
Comm’n v. FERC, 756 F.3d 556, 564 (7th Cir. 2014) (“ICC II”) (remanding the case a second time, finding that on 
remand, FERC had still not justified that costs would be allocated in a manner remotely related to cost causation). 
53 IMM Proposal at 5.

18 
FERC also should consider in any evidentiary and/or settlement proceedings established 
in this case the additional proposed solution to PJM’s resource adequacy concerns related to AI 
and large data center loads submitted to the PJM Powering Reliability Through Market Design 
Workshop by the Ohio Energy Group (“OEG”) on July 15, 2026.54  That proposal would 
establish a bifurcated auction design where existing generation would be paid short-term 
capacity pricing with caps and floors under the current RPM auction construct and new 
generation needed to serve AI and large date center loads would be paid a long-term capacity 
price necessary to provide revenue certainty for financing.55  OEG’s proposed modification to 
PJM Path A, Option 2 would establish a new, PJM-administered long-term capacity market 
without price caps or floors.56 The payments to new generators would not be paid to existing 
generators, for whom such payments would just be a windfall and result in excessive costs to 
consumers.57
OCC does not support every element of the OEG proposal.  For example, the proposal to 
charge existing consumers a blended Legacy Auction and Reliability Auction price,58 would still 
shift some costs to existing consumers associated with AI and large data center loads.  However, 
the proposal retains elements of the IMM proposal to bifurcate auctions for existing and new 
large loads in order to charge most of the costs of new generating capacity to serve the new loads 
54 Bifurcated Capacity Market Under PJM Path A, Option 2, submitted on behalf of the Ohio Energy Group to the 
PJM Powering Reliability Through Market Design Workshop, and prepared by Michael L. Kurtz,  Partner, Boehm, 
Kurtz & Lowry (Jul. 15, 2026).  This proposal is available at  https://www.pjm.com/-/media/DotCom/committees-
groups/workshops/prtmdw/2026/20260714/20260714-item-04b---bifurcated-capacity-market-under-pjm-path-a-
option-2---michael-kurtz-presentation.pdf (“Ohio Energy Group Resource Adequacy Proposal”).
55 Id. at Slide 4. 
56 Id. at Slide 7. 
57 Id. at Slide 8. 
58 Id. at Slide 9.

19 
to those causing the costs to be incurred.  Consequently, the OEG proposal could be vetted 
further in a FERC Settlement Judge-led settlement process.   
III.
CONCLUSION 
FERC may accept or reject a utility filing under section 205 of the Federal Power Act, 16 
U.S.C. 824d, depending on whether  the utility has demonstrated that its proposal is just, 
reasonable, and not unduly discriminatory or preferential.59  However, as PJM notes in its RBP 
Application, FERC may not modify substantial elements of the proposal without PJM’s 
consent.60
 Although OCC seeks rejection of PJM’s proposal in this case, OCC agrees that 
something must be done soon to address the resource adequacy concerns in the PJM region over 
the next few years.  Consequently, OCC urges that if FERC accepts the filing, it should do so 
subject to refund and set the filing for hearing and/or settlement proceedings with directives that 
the parties use the IMM RBP proposal as a starting point.  
Such a process will provide stakeholders an opportunity, subject to Settlement Judge 
oversight, to develop a just, reasonable and not unduly discriminatory or preferential solution 
that will protect existing consumers in Ohio and elsewhere from the unreasonable shift of AI and 
large data center load risks and costs to them, and from excessive, unjust, unreasonable and 
unduly discriminatory and preferential rates.   
59 NRG Power Mktg., LLC v. FERC, 862 F.3d 108 at 114 (D.C. Cir. 2017) ("Under Section 205, FERC reviews 
the proposed rate scheme filed by a utility or Regional Transmission Organization and determines whether the 
proposal is just and reasonable. FERC may accept or reject the proposal.” (“NRG Power Mktg.”). 
60 Id. (“Although FERC may not unilaterally impose a new rate scheme under Section 205, this Court has held that 
FERC has some authority to propose modifications to a utility's proposal if the utility consents to the 
modifications.”).

20 
WHEREFORE, OCC respectfully requests that FERC protect Ohio consumers by 
rejecting PJM’s Reliability Backstop Procurement proposal in this case, or in the alternative, set 
this matter for evidentiary and/or settlement proceedings.     
Respectfully submitted, 
Maureen Willis  
Ohio Consumers’ Counsel 
/s/ Angela O’Brien  
Angela O’Brien 
Deputy Consumers’ Counsel  
Office of the Ohio Consumers’ Counsel 
65 East State Street, Suite 700 
Columbus, Ohio 43215 
Telephone: (614) 466-9531 
angela.obrien@occ.ohio.gov
/s/ Denise C. Goulet  
Denise C. Goulet, Esq. 
McCarter & English, LLP 
1301 K Street, N.W. 
Suite 1000 West 
Washington, D.C. 20005 
(202) 753-3400 
dgoulet@mccarter.com
Special Counsel to the Ohio Office of the Attorney 
General for the Office of the Ohio Consumers’ 
Counsel 
DATED:  August 21, 2026

21 
CERTIFICATE OF SERVICE 
I hereby certify that I have on this date served a copy of the foregoing document via 
electronic mail upon all parties of record on the Commission’s official service list in this 
proceeding. Dated in Columbus, Ohio this 21st day of August, 2026. 
/s/ Denise C. Goulet 
Denise C. Goulet 
McCarter & English, LLP 
1301 K Street, N.W. 
Suite 1000 West 
Washington, D.C. 20005 
(202) 753-3400 
dgoulet@mccarter.com