ER26-3380-000 · 2026-07-31 · PJM Interconnection, L.L.C.
Attachment C - Croop Affidavit.pdf
Back to sections and commentaryPDF page 1
Attachment C
Affidavit of Ms. Danielle Croop,
Senior Manager in the Market Design group of
PJM Interconnection, L.L.C.
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UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
)
PJM Interconnection, L.L.C.
)
Docket No. ER26-____-000
)
AFFIDAVIT OF DANIELLE CROOP
ON BEHALF OF PJM INTERCONNECTION, L.L.C.
1.
My name is Danielle Croop, Senior Manager in the Market Design group for PJM
Interconnection, L.L.C. (“PJM”). My business address is 2750 Monroe Blvd.,
Audubon, Pennsylvania, 19403. I am submitting this affidavit on behalf of PJM to
support the proposed reforms to PJM’s Open Access Transmission Tariff (“Tariff”)
and PJM’s Reliability Assurance Agreement Among Load Serving Entities
(“RAA”) to implement the Reliability Backstop Procurement (“RBP”) framework
by providing support for PJM’s proposal to:
a. Establish a region-wide procurement target for the RBP;
b. Require that supply meet certain criteria to be eligible to reduce the Initial
RBP Target, which differs from the criteria for supply eligible to be RBP
Resources;
c. Require that supply meet certain criteria to be eligible to submit RBP Sell
Offers as RBP Resources, which differs from the criteria for supply eligible
to reduce the Initial RBP Target;
d. Rely on a pay-as-bid clearing structure based on a MW-weighted average
of the levelized procurement cost cap equal to $555/megawatt (“MW”)-day
Unforced Capacity (“UCAP”);
e. Select resources based on a MW-weighted average of the levelized
procurement cost;
f. Not propose explicit market power screening or mitigation measures as part
of the RBP;
g. Settle RBP Resource commitments based on contract for difference
(“CfD”) Structure; and
h. Proposed Cost Allocation Methodology.
In addition, I am sponsoring one exhibit, appended to my affidavit as Exhibit 1 and
entitled RBP Selection Process Examples. Exhibit 1 contains three simplified
examples that help demonstrate how the RBP selection process works.
QUALIFICATIONS
2.
In my role as Senior Manager for PJM, I lead a team of Market Design Specialists
and Economists on the development of PJM’s market design across all of PJM’s
markets including the energy, ancillary services, and capacity markets. My
responsibilities include leading the development of wholesale market rules and
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participation frameworks that advance market efficiency and grid reliability. I
joined PJM in 2014 as an Engineer, and since then, I have held numerous other
roles, including as a Senior Engineer, Senior Lead Engineer, Senior Lead Market
Design Specialist, and Market Design Manager, providing technical support and
leading cross-divisional teams on market design, market evolution initiatives
related to energy storage and distributed energy technologies participating in the
PJM markets, and balancing operations at PJM, including involvement in a number
of North American Electric Reliability Corporation subcommittees and initiatives.
3.
Prior to joining PJM, I was employed by the SI Organization, Inc. as a System
Engineer supporting large system integrations. I received a Bachelor of
Engineering Degree and a Master of Engineering (Electrical Engineering) from
Drexel University in Philadelphia, Pennsylvania, and have obtained a Certificate in
Engineering Management.
I.
KEY DESIGN CONSIDERATIONS AND RATIONALE
4.
PJM is aiming to commence a procurement of new capacity resources through the
RBP1 on September 30, 2026. PJM will set a procurement target for the RBP,
calculated as the shortfall MW from the 2028/2029 Base Residual Auction
(“BRA”), as adjusted to reflect voluntarily contracted new capacity procured by
load coming on the PJM system in the 2027/2028 and 2028/2029 Delivery Years
and any supported load that opts-out of the procurement. The shortfall MW from
the 2028/2029 BRA was 6,831.3 MW of UCAP below the Regional Transmission
Organization (“RTO”) Reliability Requirement.
5.
The RBP will function as a safety net to address the shortfall MW from the
2028/2029 BRA that has not been addressed by new load bringing their own new
capacity through bilateral agreements or otherwise. The RBP is a stop-gap, one-
time measure aimed specifically at addressing the resource adequacy shortfall in
the PJM Region, an effort design to work in part with the load that has voluntarily
brought supply to the PJM Region—independently or with support of ongoing PJM
bilateral matching efforts—and a return to market fundamentals to support the
expected load growth over the next decade. The RBP seeks to obtain “RBP
Resources,” a new, defined term in the Tariff, for a fixed, 15-year period, which
will be set from the 2028/2029 Delivery Year to the 2042/2043 Delivery Year. The
commitment term of the RBP Resources will vary by each resource’s commercial
operation date. Those RBP Resources with a commercial operation date later than
2028/2029 will have a shorter commitment, and the RBP commitments will not
extend beyond the 2042/2043 Delivery Year.
6.
PJM will run the procurement mechanism as a pay-as-bid, capacity-only structure,
with a MW-weighted average levelized procurement cost maximum willingness to
pay equal to $555/MW-day UCAP across all Delivery Years. PJM will commit
1 All capitalized terms that are not otherwise defined herein have the meaning defined in the Tariff, Amended
and Restated Operating Agreement of PJM Interconnection, L.L.C., or the RAA.
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resources at an RTO-level. The total costs of the daily RBP Charges will be
allocated to Load Serving Entities (“LSE”) within a zone/area that had forecasted
load growth, based on an RBP Obligation (“RBO”) MW, which is a newly defined
term that incorporates state-determined allocations of RBP UCAP MW to LSEs
and end-use customers, where available, that I elaborate on further, below.
II.
REGION-WIDE PROCUREMENT OF RBP RESOURCES
7.
The RBP is being driven by the resource adequacy shortfall at the RTO level.
Therefore, the RBP aims to pool the supply and demand at the RTO level to address
this shortfall. PJM does not propose to match specific supply to specific demand
or to apply locational constraints in the central procurement.
8.
PJM recognizes there are locational considerations at large for resource adequacy,
and these constraints are modeled in the Reliability Pricing Model (“RPM”). RPM
is an annual three-year forward framework, which allows PJM to model the
necessary locational parameters—Capacity Emergency Transfer Objectives
(“CETO”) and Capacity Emergency Transfer Limits (“CETL”)—to accurately
capture the locational needs in the capacity market. By contrast, PJM does not
project and calculate these parameters 15-years out, which is the eligible term of
the RBP, because PJM does not have the information needed to determine such
locational parameters for 15-year term capacity commitments.
9.
PJM’s interconnection process ensures the initial deliverability of new capacity to
the RTO. Going forward, the PJM Regional Transmission Expansion Plan
(“RTEP”) process annually studies and addresses any transmission upgrades
needed to ensure the ongoing deliverability of capacity resources. Load
deliverability is also assessed as part of the RTEP process, which will identify
transmission needs as load patterns change.
III.
INTENTIONALLY
DIFFERENT
REQUIREMENTS
FOR
SUPPLY
ELIGIBLE TO REDUCE THE INITIAL RBP TARGET AND SUPPLY
ELIGIBLE TO SUBMIT RBP SELL OFFERS AS RBP RESOURCES
10.
PJM is proposing to reduce the Initial RBP Target MW by Qualifying RBP Offset
UCAP MW, which is a new, defined term that represents net new capacity that
meets certain qualifications. Importantly, the requirements to be Qualifying RBP
Offset UCAP MW that may decrement the Initial RBP Target MW are different,
and more inclusive than the requirements to qualify as RBP Resources with RBP
UCAP MW that may submit sell offers in the RBP.
11.
The capacity provided by Qualifying RBP Offset UCAP MW and by RBP
Resources that may sell RBP UCAP MW in the RBP have different obligations and
therefore, PJM is proposing different criteria for these two categories of capacity.
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A.
Supply Eligible to Reduce Initial RBP Target
12.
For supply to qualify as Qualifying RBP Offset UCAP MW, counterparties would
be required to demonstrate the existence of commercial bilateral agreements or self-
supply and show that the associated resources result in net new UCAP being made
available to the PJM system. The following is a list of resources that could
demonstrate net- new UCAP and would be considered in this case:
a. New build including new resources that obtain Capacity Interconnection
Rights (“CIR”) transferred from deactivated resources or resources that
have announced deactivation as of April 10, 2026;
b. Uprates (incremental Installed Capacity (“ICAP”)/CIR only);
c. Repowering of deactivated generators that have retired as of April 10, 2026;
d. Surplus interconnection (incremental only);
e. Resources that undergo fuel-switching to another more efficient fuel type
that results in a higher UCAP and CIR uprate (incremental only); and
f. New Load Management (Emergency or Pre-emergency Demand Resources
and Distributed Energy Resource (“DER”)) Capacity Aggregation
Resources.
13.
PJM is defining this criterion broadly to capture all meaningful sources of new
UCAP serving new load that contribute to resource adequacy and prevent double
procuring for new load that is bringing new capacity to the system.
B.
Supply Eligible to Participate as RBP Resources in the RBP
14.
Resources eligible to participate as RBP Resources in the RBP, if accepted, will be
procured up through the end of a fixed, 15-year capacity commitment. PJM
believes additional requirements are necessary to ensure that resources permitted
to participate in the RBP align with the underlying objectives of the procurement
to obtain new physical capacity for the system and demonstrate a high likelihood
of successfully entering service and remaining available throughout the
commitment period.
15.
The RBP Resource eligibility criteria are comparatively more restrictive than the
criteria for Qualifying RBP Offset UCAP MW, and specifically in addition to
requiring new UCAP be brought to the system, there is a requirement that there is
new ICAP and Maximum Facility Output (“MFO”) being brought to the system,
and new or transferred CIRs.2 These additional requirements remove the eligibility
of two defined sources of new UCAP that may be Qualifying New UCAP MW and
2 CIRs can be transferred from a deactivated resource or a resource that has announced deactivation as of
April 10, 2026.
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eligible to reduce the Initial RBP Target. More specifically, the following are not
eligible to serve as RBP Resources:
a. Surplus interconnection (incremental only); and
b. Resources that undergo fuel-switching to another more efficient fuel type
that results in a higher UCAP or CIR uprate (incremental only).
16.
These more restrictive eligibility requirements are intended to ensure that resources
receiving long-term commitments are capable of delivering the reliability benefits
that the RBP is designed to secure, reduce risk, and improve confidence in project
execution.
17.
The exclusion of Surplus Interconnection Service (“SIS”) resources from supply
eligible to serve as RBP Resources was driven by the fact that these projects do not
bring any additional MFO or CIRs to the system. This is a defined requirement for
resources entering through the SIS-defined Tariff provisions. Resources that do
interconnect and operate under SIS do not have any rights on their own to the PJM
system. By design, a surplus resource can only operate while the existing resource
is in service, or no more than one year after the deactivation of the existing resource,
and when the existing resource is not operating and using the interconnection
service. Given the 15-year term, resources need to be able to operate independently
to provide certainty of deliverability for a 15-year term. Further, these projects,
while increasing UCAP in a hybrid configuration, do not have clear contributions
of UCAP between the existing resource and surplus resource creating uncertainty
and the need for sensitivities or estimates in both the increase system capacity and
the RBP settlements.
18.
This is not a complete barrier to participation of surplus resources in RBP. As
mentioned above, these resources are able to participate as Qualifying New UCAP
MW to reduce the Initial RBP Target. Further, these sited projects would still have
an opportunity to offer into the RBP and co-locate with the existing resource and
be studied by PJM for increased CIRs and MFO at the facility through the
interconnection process.
19.
The exclusion of resources that undergo fuel-switching to another more efficient
fuel type that results in a higher UCAP and CIR uprate (incremental only) is also
necessary to provide the certainty of deliverability for a 15-year term expected from
an RBP Resource. Fuel switching does not bring new ICAP or new MFO on to the
system. There is an anticipated UCAP increase resulting in the resource Effective
Load Carrying Capability (“ELCC”) class change and resulting accreditation,
however the potential new UCAP captured from this resource would require some
estimate of the incremental UCAP value, which may require sensitivity analyses,
to determine the delivered incremental UCAP and RBP payment, that cannot be
based on any direct increase in ICAP for the resource. This creates uncertainty in
what capacity will be available to the system in the 15-year term and should be
settled under the RBP.
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20.
Additionally, PJM has proposed more stringent requirements on Demand
Resources and DER Aggregation Resources eligible to qualify as RBP Resources
relative to the requirements on such resources for purposes Qualifying RBP Offset
UCAP MW. Specifically, to qualify as RBP Resources, Demand Resources and
DER Aggregation Resources need to have contracts for the RBP term (i.e., up to
15 years) with the identified sites that are offering as RBP Resources. This is to
provide assurance that the supply will be available for the 15-year term and manage
the risk of the supply being available for the full term that PJM is procuring on
behalf of load in the RBP. By contrast, Qualifying RBP Offset UCAP MW does
not require 15-year contracts because the commitment terms (length, price, etc.) are
being managed by the commercial contract between the buyer and seller.
IV.
PAY-AS-BID STRUCTURE
21.
PJM generally supports a single-clearing-price market design and continues to view
uniform clearing prices as the most efficient market outcome. Uniform pricing
promotes transparent price discovery, facilitates forward pricing, and supports
competitive market outcomes and the PJM Region sees the benefits of that design
across its existing markets.
22.
However, the proposed RBP differs significantly from PJM’s standard market
constructs and warrants a different settlement approach which is why PJM is
proposing a pay-as-bid structure for several reasons unique to this procurement.
23.
First, the RBP is intended as a one-time procurement mechanism designed to
address near-term resource adequacy challenges while PJM continues to focus on
long-term market fundamentals and supporting continued commercial bilateral
contracting. Because this procurement is not designed to be a durable or repeatable
procurement, its pricing outcomes are less likely to serve as incentive market
signals.
24.
Second, much of the longer-term capacity that the RBP framework seeks to secure
is expected to be obtained through bilateral arrangements outside of PJM’s
organized markets. A pay-as-bid structure more closely aligns with the economics
and settlement structures of bilateral contracts and reduces the likelihood that RBP
outcomes will distort or influence those private contracting activities.
25.
Finally, the proposed procurement is not acquiring a uniform commodity.
Although the RBP will seek a fixed, 15-year period of time for procurement and
cost allocation of RBP Resources, those resources may differ based on contract
duration (dependent on the projected in-service date of selected resources),
commercial operation dates, and other factors such as differences in ELCC
accreditation and varying UCAP across the full term of the commitment. These
differences create distinct products rather than a single homogeneous offering.
Establishing a uniform clearing price across such varied products would require
PJM to normalize offers through potentially complex and subjective assumptions.
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A pay-as-bid structure avoids those challenges while providing a straightforward
and transparent procurement framework.
V.
VOLUME-WEIGHTED
LEVELIZED
COST
PROCUREMENT
MAXIMUM WILLINGNESS TO PAY OF $555/MW-DAY UCAP
26.
PJM believes it is necessary to identify, for the RBP, a maximum willingness to
pay because it is not reasonable to assume that load should be obligated to pay an
unlimited amount for supply. As with other PJM procurement mechanisms, an
upper bound helps balance reliability needs with customer cost protections.
27.
In this procurement, PJM is not receiving direct buy bids or an explicit expression
of loads’ maximum willingness to pay, and thus PJM is proposing an administrative
maximum willingness to pay that PJM believes will appropriately balance
reliability needs and customer cost protections.
28.
The RPM relies on the Variable Resource Requirement (“VRR”) curve, which is
derived from the Cost of New Entry, to establish the value PJM is willing to pay
for resource commitments in a given Delivery Year. Specifically, for the
2028/2029 Delivery Year BRA, absent the temporary price collar, Point 1 on the
VRR curve is $555MW-day UCAP. Because the RBP is intended to address a
specific resource shortfall identified in the 2028/2029 BRA, PJM is proposing to
use Point 1 of the applicable BRA VRR curve as the basis for establishing the
procurement maximum willingness to pay for the RBP.
29.
PJM is proposing an RBP maximum willingness to pay to be a MW-weighted
average of the levelized procurement cost of all selected RBP Sell Offers to be set
at $555/MW-day across all Delivery Years. This results in the cost to load being
allocated for RBP Charges to not exceed $555/MW-day, on average, over the 15-
year term. Using this average/budget approach to the maximum willingness to pay
(in comparison to providing a price cap in each Delivery Year or a direct price cap
on offers) allows more flexibility in supply sell offers, to the extent that a
$555/MW-day maximum willingness to pay may not capture every resource’s costs
and eliminates a potential barrier to supply participation.
VI.
SELECTION PROCESS
30.
PJM is proposing to calculate a levelized procurement cost for each RBP Sell Offer
to determine the selection. The levelized cost of capacity is an industry standard
evaluation metric used in competitive resource procurements across the country.
The levelized cost calculation for evaluation addresses the fundamental issue of a
simple MW-weighted average cost by accounting for the time value of money,
which is critical when evaluating contracts spanning 15-year terms, as PJM is
proposing in the RBP. Levelizing properly discounts future cost streams to a
common basis, giving us a true economic comparison across bids. In Exhibit 1,
appended to my affidavit, I provide examples, with step-by-step explanations,
which illustrate how PJM’s proposed selection process will work.
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31.
The calculation PJM will use is: Levelized Cost ($/MW-day) = Net Present Value
(RBP Sell Offer price * UCAP offered)/Net Present Value (UCAP offered), with a
discount rate equal to 9.5% after-tax average weighted average cost of capital
(“ATWACC”). The proposed discount rate is The Brattle Group-estimate
calculated value used in the 2025 Periodic Review of VRR Curve Shape and Key
Parameters.3 The purpose of discounting is not to forecast inflation or market
prices, but to reflect the time value of money and the opportunity cost of invested
capital. The levelized cost is intended to represent the cost per UCAP unit needed
to recover investment and operating costs over the offer term, and the ATWACC
represents the economically appropriate discount rate. ATWACC represents the
minimum expected return required by debt and equity holders and is therefore the
standard rate used to annualize long-lived infrastructure costs.
VII.
MARKET MITIGATION
32.
PJM is not proposing market power screening or mitigation measures as part of the
RBP. The RBP is designed as a pay-as-bid procurement in which each selected
resource is compensated based on its individual offer rather than a market-clearing
price established by the marginal resource. As a result, the traditional incentive and
ability to exercise market power are substantially reduced.
33.
While the pay-as-bid design on its own does not eliminate market power concerns,
the overall proposed RBP design further mitigates market power concerns. This is
driven by the one-time nature of the procurement, the voluntary participation
model, the limited scope and bilateral process, and the maximum willingness to
pay. In a pay-as-bid approach, unlike a uniform clearing price construct where
sellers are expected to offer a marginal cost, sellers are more likely to offer the
expected clearing price. Given offers will likely have less variation and information
underlying offers it can be difficult and ineffective to determine offers exhorting
market power.
34.
The procurement is voluntary, meaning suppliers can simply choose to participate
or not, and then further PJM is proposing a maximum willingness-to-pay cap,
which provides a direct limit on procurement costs even in the absence of offer
mitigation. The illustrative example below demonstrates the inability for one
resource to impact the clearing price of any other resource in a pay-as-bid structure.
3 2025 Periodic Review of Variable Resource Requirement Curve Shape and Key Parameters, PJM
Interconnection,
L.L.C.
(Nov.
7,
2025),
https://www.pjm.com/pjmfiles/directory/etariff/FercDockets/9248/20251107-er25-455-000.pdf
[https://perma.cc/87GP-AYL5].
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This is in contrast to a uniform clearing price market where the marginal resource
will set the clearing price and all resources will receive that price. A Seller has a
fleet of three resources: A, B, and C and offers accordingly:
Resource A @$10/MW-day
Resource B @$10/MW-day
Resource C @$50/MW-day
Uniform-clearing price structure:
• Resource C sets the market-clearing price at $50/MW-day,
• Resource A and Resource B also receive the market-clearing price
of $50/MW-day
Pay-as-bid structure:
• Resource C receives offer price of $50/MW-day
• Resource A receives offer price of $10/MW-day
• Resource B receives offer price of $10/MW-day
35.
The Request for Information (“RFI”)4 PJM conducted shows a large set of potential
supply to participate in the RBP or could otherwise pursue a commercial bilateral
contract (via PJM’s Bilateral Matching or independently) which allows the RBP to
function more like a competitive solicitation.
36.
In summary, given the one-time nature of the procurement, the pay-as-bid design,
the voluntary participation, and the limited scope/bilateral parallel, the
implementation complexity and effectiveness would likely outweigh any
corresponding benefits and therefore PJM proposes to proceed without additional
market power mitigation measures, beyond the maximum willingness to pay.
VIII. CONTRACT FOR DIFFERENCE
37.
CfD is a financial settlement methodology for energy contracts designed to provide
price stability to both the buyer (load) and seller (supply). It is structured around a
“strike price” where the settlement or CfD is based on a difference between the
market price and a committed strike price. If the strike price is higher than the
market price, the buyer must pay the difference between the strike price and market
4 Charles River Associates, PJM Reliability Backstop RFI Summary, PJM Interconnection, L.L.C. (May 27,
2026),
https://www.pjm.com/-/media/DotCom/committees-groups/cifp-rbp/2026/20260527/20260527-
informational-only---reliability-backstop-rfi-summary---charles-river-associates.pdf
[https://perma.cc/UM8V-FAC5].
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price. Alternatively, if the strike price is lower than the market price the seller must
pay back the difference between the strike price and market price.
38.
PJM is proposing to settle the RBP with a CfD-like structure, where the strike price
will be the RBP offer price of the committed RBP Resource for an applicable
Delivery Year, and the market price will be the weighted average RPM clearing
prices for the same applicable Delivery Year.
39.
PJM is proposing the CfD will only be assessed for MW that are committed in the
RPM and delivered and will be capped at RBP committed MW. This is to say there
will not be a CfD on RBP Resource committed MW that are not delivered in the
applicable Delivery Year. This is a deviation from the purely financial CfD where
the settlement would be on the committed amount, not what was physically
delivered. PJM’s design choice of not designing a fully financial CfD was driven
by the underscoring goal of the RBP supporting reliability and resource adequacy,
and intended to preserve market participation while creating a more stable capacity
revenue stream for the RBP Resource.
IX.
RBP COST ALLOCATION METHODOLOGY
40.
As a wholesale market operator, PJM’s role is to design and administer a
procurement mechanism that addresses regional reliability needs in a manner
consistent with our regulatory framework. Cost allocation decisions should
therefore be grounded in principles that appropriately assign costs to beneficiaries
(demand) while respecting the jurisdictional boundaries between wholesale market
operations and retail rate design. This jurisdictional reality was also recognized in
the Statement of Principles Regarding PJM signed by the National Energy
Dominance Council and the 13 governors of the PJM states, issued on January 16,
2026, where PJM’s 13 governors agreed to:
[u]se their Authorities to Allocate Costs to Data Centers and Protect
Residential Customers: Use 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 Reliability Backstop Auctions to
new data center loads that have not otherwise procured capacity or
agreed to be curtailable.5
41.
The cost allocation structure is designed around first allocating the Final RBP
Target to Electric Distributor zones/areas with forecasted load adjustment, and then
further allocating the charges to LSEs based on the RBO, which permits states to
determine the appropriate allocation of RBP UCAP MW to specific LSEs and/or
end-use customers, thus allowing Relevant Electric Retail Regulatory Authorities
(“RERRA”) to appropriately assign costs to their respective retail customers,
including data centers. Should the relevant RERRA(s) decline to communicate
5 Statement of Principles Regarding PJM, National Energy Dominance Council, 2 (Jan. 16, 2026),
https://www.energy.gov/documents/statement-principles-regarding-pjm [https://perma.cc/35HJ-W56E].
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RBO MW to the relevant Electric Distributors (which would then communicate
that information to PJM), PJM has proposed to apply a backup default cost
allocation.
A.
Step 1: Allocating to Electric Distributor Zone/Area
42.
To allocate costs, i.e., RBP Charges, PJM is proposing to determine cost
responsibility by starting with the Initial RBP Target and determining how
responsibility for the RBP UCAP MW in the Initial RBP Target should be
allocated.
43.
First, the total region-wide Initial RBP Target is allocated to each Electric
Distributor zone/area in accordance with Schedule 8 of the RAA, which was revised
in 2024 to incorporate Load Adjustments by Electric Distributor zone/area. More
specifically, the allocation of RBP UCAP MW to specific Electric Distributor
zones/areas will be based on the forecasted load growth from the 2026/2027
Delivery Year to the 2028/2029 Delivery Year and incorporate the Load
Adjustments set forth in PJM Table B9b from the 2026 PJM Load Forecast6 to
ultimately determine the initial allocated pro-rata share to each relevant Electric
Distributor zone/area.
44.
Second, the pro-rata allocation of RBP UCAP MW to each Electric Distributor’s
zone/area, and the Final RBP Target, will be further adjusted to reflect reductions
for Qualifying RBP Offset UCAP MW and UCAP MW representing successfully
supported opt-outs from RBP in each zone/area. RBP Charges are then allocated
to each Electric Distributor’s zone/area based on the zone/area’s pro-rata share of
the total region-wide Final RBP Target.
45.
An illustrative example of these adjustments and the pro-rata allocation process is
detailed below.
6 2026 PJM Load Forecast Report Data Tables, PJM Interconnection, L.L.C., Tab Table B9b (Feb. 2026),
https://www.pjm.com/-/media/DotCom/planning/res-adeq/load-forecast/2026-load-report-tables.xlsx
[https://perma.cc/SST2-EGUZ]; 2026 PJM Load Forecast Report, PJM Interconnection, L.L.C., 5-6 (Jan.
14,
2026),
https://www.pjm.com/-/media/DotCom/library/reports-notices/load-forecast/2026-load-
report.pdf [https://perma.cc/J24E-7CV7] (describing Table B9b results).
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B.
Example of Allocation to Electric Distributor Zone/Area
46.
The initial allocation of RBP UCAP MW to each Electric Distributor zone/area will
be based on Load Adjustments, as set forth in PJM Table B9b from the 2026 PJM
Load Forecast, and each zone/area’s share of the Initial RBP Target of 6,831.3 MW.
47.
Second, as decrements are submitted, both the Final RBP Target and the pro-rata
allocation to each Electric Distributor zone/area will be updated. In this example,
I will assume the following Qualifying RBP Offset UCAP MW were submitted and
will decrement the Initial RBP Target:
MW load
adjustment
(2028-2026)
BGE
25.0
0.28%
18.9
PECO
264.0
2.92%
199.6
PPL
1,085.0
12.01%
820.5
PSEG
320.0
3.54%
242.0
AEPOHIO
2,019.2
22.35%
1,527.0
PE
154.0
1.70%
116.5
PP
17.8
0.20%
13.5
OHIO
149.2
1.65%
112.8
COMED
1,173.0
12.99%
887.1
DAY
277.0
3.07%
209.5
DOM
982.6
10.88%
743.1
NVEC
1,722.4
19.07%
1,302.6
ODEC
170.2
1.88%
128.7
REC
673.8
7.46%
509.6
RTO
9,033.2
100% 6,831.3
AREANAME
Initial Share
of RBP (%)
Initial
Allocation of
RBP UCAP MW
REC
673.8
633.4
ODEC
130
122.2
AREANAME Load
Qualifying
RBP Offset
UCAP MW
Note: The qualifying RBP Offset UCAP MW is
represented by load*FPR for the 2028/2029
BRA (0.9401). This is representative of the
self-supply obligation.PDF page 14
13
48.
In my illustrative example, for purposes of simplicity, I assume there are no
additional decrements to the Initial RBP Target for opt outs. Thus, the Final RBP
Target would be calculated as Initial RBP target – Qualifying RBP Offset UCAP
MW. In this example, this would be: 6,831.3 MW – [633.4 MW + 122.2 MW ] =
6,075.7 MW. The Qualifying RBP Offset UCAP MW is divided by the 2028/2029
BRA Forecast Pool Requirement to identify the amount of load that is being served
by those offset MW and can subsequently be removed from any allocation of RBP
MW.
49.
The updated allocation would be as follows, as demonstrated in the table below. In
the Old Dominion Electric Cooperative (“ODEC”) zone/area, the MW Load
Adjustment is reduced from 170.2 MW to 40.2 MW to account for the 130 MW of
load with demonstrated Qualifying RBP Offset UCAP MW. In the Rappahannock
Electric Cooperative (“REC”) zone/area, the MW Load Adjustment is reduced to 0
MW, from 673.8 MW to 0 MW to account for the 673.8 MW of load with
demonstrated Qualifying RBP Offset UCAP MW.
50.
Based on the revised adjustments to the Load Adjustments, each Electric
Distributor zone/area’s allocated RBP UCAP MW will reflect its adjusted pro-rata
share of the 6,075.7 MW Final RBP Target. Thus, while ODEC had previously
been allotted 1.88% of the Initial Target, its pro-rata share was reduced to 0.49% to
reflect the fact that ODEC brought 122.2 MW of Qualifying RBP Offset UCAP
MW, which is, with the Forecast Pool Requirement adjustment, equivalent to 130
MW. Similarly, REC’s pro-rata share went from 7.46% to 0.0% to reflect that REC
brought 633.4 MW UCAP supply, which is obligation for 673.8 MW of load, and
is equal to the amount of the REC Load Adjustment.
PDF page 15
14
C.
Step 2: Allocating to LSEs and/or End-Use Customers Based on
RERRA-Determined Allocation or Allocating to LSEs Based on PJM
Backup Allocation
51.
Electric Distributors will report to PJM, where available, the RBO MW for the
LSEs in an Electric Distributor’s zone/area that are being allocated RBP UCAP
MW. These value(s) will be provided to PJM by the Electric Distributor designated
to coordinate with the states and/or RERRAs to the extent that states and/or
RERRAs wish to provide the Electric Distributors with information on how costs
are allocated to LSEs. To the extent that PJM assigns costs to LSEs in accordance
with RBO MW, PJM does so at the direction of the submitted information by
relevant the Electric Distributor(s) as determined by the RERRA for that zone/area.
52.
If PJM does not receive RBO MW from an Electric Distributor for a zone/area
allocated RBP UCAP MW, PJM will need a backup settlement allocation. PJM
will assign the RBP UCAP MW using the Daily Unforced Capacity Obligation MW
load ratio shares in the respective zone/area that are assigned RBP UCAP MW.
D.
Example of Allocation to Electric Distributor Zone/Area
53.
Another illustrative example is detailed below for the pro-rata allocation process to
the LSEs that are being allocated RBP UCAP MW. In this example, we assume
the Electric Distributor zone/area 1 has 116 RBP UCAP MW obligation with an
associated $11,600/day RBP charge, allocated to that zone/area. There are two
Final MW
load
adjustment
(2028-2026)
BGE
25.0
0.30%
18.5
PECO
264.0
3.21%
194.9
PPL
1,085.0
13.18%
801.0
PSEG
320.0
3.89%
236.3
AEPOHIO
2,019.2
24.54%
1,490.8
PE
154.0
1.87%
113.7
PP
17.8
0.22%
13.1
OHIO
149.2
1.81%
110.2
COMED
1,173.0
14.25%
866.0
DAY
277.0
3.37%
204.5
DOM
982.6
11.94%
725.4
NVEC
1,722.4
20.93%
1,271.6
ODEC
40.2
0.49%
29.7
REC
0.0
0.00%
0.0
RTO
8,229.4
100% 6,075.7
Final Share
of RBP (%)
Final
Allocation of
RBP UCAP MW
AREANAMEPDF page 16
15
LSEs (i.e., LSE 1 and LSE 2) in zone/area 1 that bear some responsibility for the
RBP charge, based on the RBO submitted to PJM.
54.
In the first scenario, the designated RBO MW that should be used to allocate
charges to each LSE is submitted to PJM by the Electric Distributor and then PJM
will apply the cost allocation and settle RBP Charges accordingly. Here, the
reported RBO MW for LSE 1 is 58 RBP UCAP MW, for LSE 2 is 58 RBP UCAP
MW, and for LSE 3 is 0 RBP UCAP MW. Thus the $11,600/day RBP Charges
will be allocated pro rata 50% to LSE 1, 50% to LSE2, and 0% to LSE 3.
55.
In the second scenario, where the submitted RBO MW is not equal to the RBP
UCAP MW procured for the zone/area, PJM will still use the submitted RBO MW
to determine the pro rata allocation and ensure the RBP Charges are fully allocated
to the LSE’s with non-zero submitted obligations. In the example below, LSE 1 is
60 RBP UCAP MW, LSE 2 is 40 RBP UCAP MW, and LSE 3 is 0 RBP UCAP
MW. Thus, the $11,600/day RBP Charge will be allocated 60% to LSE1 and 40%
to LSE 2, and 0% to LSE 3.
56.
This concludes my affidavit.
PDF page 17
Exhibit 1
Appendix to Affidavit of Ms. Danielle Croop
Examples Demonstrating RBP Resource
Procurement Process
PDF page 18
Croop, Exhibit No. 1
Page 1
Examples Demonstrating RBP Resource Procurement Process
The following examples are intended to demonstrate how RBP Resources will be procured
based on a maximum willingness to pay, defined as a “MW-weighted average of the levelized
procurement cost” for the RBP, and selected through a “budget approach.”1
Each RBP Resource Sell Offer will include an offer price and MW quantity pair for each
Delivery Year beginning with the first year the resource is expected to reach commercial operation.
PJM will then determine the “levelized procurement cost” for this resource to use in the selection
process.2 This will be done with the Levelized Cost equation, with a discount rate equal to 9.5%
after-tax average weighted average cost of capital (“ATWACC”).
Levelized Cost ($/MW-day) = Net Present Value (RBP Sell Offer price x UCAP
offered)/Net Present Value (UCAP offered)
Example 1
In the example below, Unit A offers at a price and a quantity for each Delivery Year of the
15-year fixed term, beginning in Year 1 and ending in Year 15. This Offer has a levelized
procurement cost of $101.50/MW-day UCAP and a levelized MW value of 69.3 MW.
1 Proposed Tariff, Attachment DD, section 18.5(f)(ii); Croop Aff. ¶ 29.
2 Proposed Tariff, Attachment DD, section 18.5(f)(ii); Croop Aff. ¶ 29.
PDF page 19
Croop, Exhibit No. 1
Page 2
Example 1: Unit A, $/MW Offer per Year
Unit A
Price ($)
MW
Year 1
91
10
Year 2
91
10
Year 3
100
9
Year 4
100
9
Year 5
100
9
Year 6
100
9
Year 7
100
9
Year 8
110
8
Year 9
110
8
Year 10
110
8
Year 11
110
8
Year 12
110
8
Year 13
110
8
Year 14
110
8
Year 15
110
8
Example 2
Example 2 walks through how a set of offers are evaluated based on ranked Delivery Year
and levelized cost for selection. The selection process is also constrained to the maximum
willingness to pay of the procurement. For illustrative purposes, rather than a maximum
willingness to pay of $555/MW-day as PJM is proposing to use for the RBP, we assume that the
maximum willingness to pay is $100/MW-day, and the Final RBP Target for procurement is
6,800 MW.
Table 1 illustrates the UCAP MW offered through the first four Delivery Years and a
represented levelized cost offer for this resource. Table 1, below, tracks the MW that are procured
to determine when PJM satisfies the procurement target of 6,800 MW.
PDF page 20
Croop, Exhibit No. 1
Page 3
Table 1
Table 2 shows the offers in greater detail in determining the present value and levelized cost of the
offers. For each RBP Resource offer (Offers 1-8), there are three procurement values in the PV
column. The first value for each RBP Resource offer is the levelized MW UCAP. The second
value is the levelized cost, expressed as $/MW-day. And the third value is the total revenue cost
stream based on the RBP Resource’s levelized MW and cost.
Table 2
28/29
29/30
30/31
31/32
Levelized Cost Offer
Offer 1
3,000
3,000
2,800
2,800
$100
Offer 2
500
450
450
400
$50
Offer 3
400
500
500
$200
Offer 4
2,000
1,900
2,000
$50
Offer 5
900
1,000
1,000
$90
Offer 6
150
150
$1,200
Offer 7
200
$1,500
Offer 8
200
$2,000
Total Offered
3,500
6,750
6,800
7,250
28/29
29/30
30/31
31/32
PV
MW UCAP
3,000
3,000
2,800
2,800
9,322
$/MW-Day
$100
$100
$100
$100
$100
Revenue Cost Stream
$300,000
$300,000
$280,000
$280,000
$932,200
MW UCAP
500
450
450
400
1,453
$/MW-Day
$50
$50
$50
$50
$50
Revenue Cost Stream
$25,000
$22,500
$22,500
$20,000
$72,645
MW UCAP
-
400
500
500
1,062
$/MW-Day
$0
$200
$200
$200
$200
Revenue Cost Stream
$0
$80,000
$100,000
$100,000
$212,444
MW UCAP
-
2,000
1,900
2,000
4,506
$/MW-Day
$0
$50
$50
$50
$50
Revenue Cost Stream
$0
$100,000
$95,000
$100,000
$225,316
MW UCAP
-
900
1,000
1,000
2,208
$/MW-Day
$0
$90
$90
$90
$90
Revenue Cost Stream
$0
$81,000
$90,000
$90,000
$198,705
MW UCAP
-
-
150
150
219
$/MW-Day
$0
$0
$300
$300
$300
Revenue Cost Stream
$0
$0
$45,000
$45,000
$65,575
MW UCAP
-
-
-
200
139
$/MW-Day
$0
$0
$0
$300
$300
Revenue Cost Stream
$0
$0
$0
$60,000
$41,734
MW UCAP
-
-
-
200
139
$/MW-Day
$0
$0
$0
$300
$300
Revenue Cost Stream
$0
$0
$0
$60,000
$41,734
Offer 8
Offer 1
Offer 2
Offer 3
Offer 4
Offer 5
Offer 6
Offer 7PDF page 21
Croop, Exhibit No. 1
Page 4
The procurement process will prioritize earlier Delivery Years, while being constrained to the
fixed-budget maximum willingness to pay. This can result in: (1) an earlier Delivery Year resource
being skipped if it will violate the maximum willingness to pay constraint; (2) a procurement of
that resource later in the process, even if the resource was previously skipped, if procurement of a
lower-priced resource creates additional cost headroom in the budget; and/or (3) a possibility that
PJM will not procure the exact Final RBP Target quantity if doing so violates the maximum
willingness to pay constraint. These features are demonstrated below in the selection sequencing
example:
Step 1: Procure Offer 1. This will add the below MW value to the target for each Delivery
Year, with a MW-weighted average levelized costs of $100.
Step 2: Procure Offer 2. This will increase our procurement by the offered MW for each
applicable Delivery Year, and result in a MW-weighted average levelized cost of $93.26.
The MW-weighted average levelized cost of $93.26 can be calculated from the PV column in
Table 2 as the sum of levelized MW / sum of Revenue cost stream. [9,322+1,453]/[932,200 +
72,645]
28/29
29/30
30/31
31/32
Offer 1
3,000
3,000
2,800
2,800
Total Offered
3,000
3,000
2,800
2,800
28/29
29/30
30/31
31/32
Offer 1
3,000
3,000
2,800
2,800
Offer 2
500
450
450
400
Total Offered
3,500
3,450
3,250
3,200PDF page 22
Croop, Exhibit No. 1
Page 5
Step 3: Skip Offer 3. If Offer 3 was selected the MW-weighted average levelized cost
would rise to $102.84, above the maximum willingness to pay of $100 MW/day.
Step 4: Procure Offer 4. This will increase the procured MW by the offered MW for each
applicable Delivery Year, and result in a MW-weighted average levelized cost of $80.50.
Step 5: Procure Offer 3. Offer 3 may now be procured while keeping the MW-weighted
average levelized cost under the maximum willingness to pay. Thus, the procurement will
prioritize and commit this resource with an earlier first Delivery Year. This will increase the
procured MW by the offered MW for each applicable Delivery Year, and result in a MW-weighted
average levelized cost of $88.27.
Step 6: Procure Offer 5. This will increase the procured MW by the offered MW for each
applicable Delivery Year, and result in a MW-weighted average levelized cost of $88.47.
28/29
29/30
30/31
31/32
Offer 1
3,000
3,000
2,800
2,800
Offer 2
500
450
450
400
Offer 4
2,000
1,900
2,000
Total Offered
3,500
5,450
5,150
5,200
28/29
29/30
30/31
31/32
Offer 1
3,000
3,000
2,800
2,800
Offer 2
500
450
450
400
Offer 3
400
500
500
Offer 4
2,000
1,900
2,000
Total Offered
3,500
5,850
5,650
5,700
28/29
29/30
30/31
31/32
Offer 1
3,000
3,000
2,800
2,800
Offer 2
500
450
450
400
Offer 3
400
500
500
Offer 4
2,000
1,900
2,000
Offer 5
900
1,000
1,000
Total Offered
3,500
6,750
6,650
6,700PDF page 23
Croop, Exhibit No. 1
Page 6
Step 7: Procure Offer 6. This will increase the procured MW by the offered MW for each
applicable Delivery Year, and result in a MW-weighted average levelized cost of $90.94
At this point, the final target MW of 6,800 has been committed and the procurement is complete.
Offer 7 and 8 would not be procured through the RBP.
Example 3
In Example 3, the selection clears short of the Final RBP Target to maintain the maximum
willingness to pay. This example relies on the same example as above, except that offer prices for
Offers 6, 7, and 8 are dramatically increased.
28/29
29/30
30/31
31/32
Offer 1
3,000
3,000
2,800
2,800
Offer 2
500
450
450
400
Offer 3
400
500
500
Offer 4
2,000
1,900
2,000
Offer 5
900
1,000
1,000
Offer 6
150
150
Total Offe
3,500
6,750
6,800
7,250PDF page 24
Croop, Exhibit No. 1
Page 7
Table 3
The procurement process runs through Steps 1 through 5, as described in Example 2, above. Then,
starting in Step 6, the process begins to differ:
Step 6: Procure Offer 5. This will increase the procured MW by the offered MW for each
applicable Delivery Year, and result in a MW-weighted average levelized cost of $88.47.
28/29
29/30
30/31
31/32
PV
MW UCAP
3,000
3,000
2,800
2,800
9,322
$/MW-Day
$100
$100
$100
$100
$100
Revenue Cost Stream
$300,000
$300,000
$280,000
$280,000
$932,200
MW UCAP
500
450
450
400
1,453
$/MW-Day
$50
$50
$50
$50
$50
Revenue Cost Stream
$25,000
$22,500
$22,500
$20,000
$72,645
MW UCAP
-
400
500
500
1,062
$/MW-Day
$0
$200
$200
$200
$200
Revenue Cost Stream
$0
$80,000
$100,000
$100,000
$212,444
MW UCAP
-
2,000
1,900
2,000
4,506
$/MW-Day
$0
$50
$50
$50
$50
Revenue Cost Stream
$0
$100,000
$95,000
$100,000
$225,316
MW UCAP
-
900
1,000
1,000
2,208
$/MW-Day
$0
$90
$90
$90
$90
Revenue Cost Stream
$0
$81,000
$90,000
$90,000
$198,705
MW UCAP
-
-
150
150
219
$/MW-Day
$0
$0
$1,500
$1,500
$1,500
Revenue Cost Stream
$0
$0
$225,000
$225,000
$327,876
MW UCAP
-
-
-
200
139
$/MW-Day
$0
$0
$0
$1,500
$1,500
Revenue Cost Stream
$0
$0
$0
$300,000
$208,672
MW UCAP
-
-
-
200
139
$/MW-Day
$0
$0
$0
$2,000
$2,000
Revenue Cost Stream
$0
$0
$0
$400,000
$278,230
Offer 8
Offer 1
Offer 2
Offer 3
Offer 4
Offer 5
Offer 6
Offer 7
28/29
29/30
30/31
31/32
Offer 1
3,000
3,000
2,800
2,800
Offer 2
500
450
450
400
Offer 3
400
500
500
Offer 4
2,000
1,900
2,000
Offer 5
900
1,000
1,000
Total Offered
3,500
6,750
6,650
6,700PDF page 25
Croop, Exhibit No. 1
Page 8
At this point, Offers 6, 7 and 8 cannot be procured without violating the maximum
willingness to pay constraint. If Offer 6 were selected, the MW-weighted average levelized cost
would rise to $104.91, which is above the maximum willingness to pay of $100 MW/day. Similar
violations of the maximum willingness to pay for Offers 7, and 8 would occur. Given that, in this
example, there are no additional offers to consider, the procurement would clear 100 MW short
the target, with the maximum UCAP MW procured equal to 6,700 MW for the 2031/32 Delivery
Year.
PDF page 26
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
PJM Interconnection, L.L.C.
)
Docket No. ER26-
-000
VERIFICATION
I, Danielle Croop, pursuant to 28 U.S.C. § 1746, state, under penalty of perjury,
that I am the Danielle Croop referred to in the foregoing document entitled "Affidavit of
Danielle Croop, on Behalf of P.JM Interconnection, L.L.C.ại that I have read the same and
am familiar with the contents thereof, and that the facts set forth therein are true and correct
to the best of my knowledge, information, and belief.
Danielle Croop
Danielle Croop
Sr. Manager
Market Design
P.JM Interconnection, L.L.C.
Subscribed and sworn to before me, the undersigned notary public, this 31st day
of July 2026.
Nechilti: Nattiok
My Commision expires: /9/23/3427
Commonwealth of Pennsylvania • Notary Seal
MICHELE A MATTICOLA - Notary Public
Montgomery County
My Commission Expires December 23, 2027
Commission Number 1249359