ER27-454-000 · 2026-11-09 · PJM

Proposed Amendments to the Reliability Backstop Procurement; Request for Waiver

PJM Interconnection, L.L.C. 
2750 Monroe Blvd. 
Audubon, PA 19403 
 
Chenchao Lu 
Associate General Counsel 
(610) 500-3245  
chenchao.lu@pjm.com 
 
 
 
 
 
 
 
 
November 9, 2026 
 
The Honorable Debbie-Anne A. Reese 
Secretary  
Federal Energy Regulatory Commission 
888 First Street, N.E. 
Washington, D.C. 20426-0001 
 
Re: 
PJM Interconnection, L.L.C., Docket No. ER27-____-000  
Proposed Amendments to the Reliability Backstop Procurement 
Request for Waiver of Tariff Attachment DD, Sections 16.2 and 16.3 
 
Dear Secretary Reese: 
 
Pursuant to section 205 of the Federal Power Act (“FPA”),1 the Federal Energy 
Regulatory Commission’s (“Commission”) Regulations,2 PJM Interconnection, L.L.C. 
(“PJM”) hereby submits proposed revisions to the PJM Open Access Transmission Tariff 
(“Tariff”) that updates the Reliability Backstop Procurement (“RBP”) rules to address, 
inter alia, issues identified in the Commission’s September 29 Order.3  Specifically, this 
filing proposes modifications to establish just and reasonable rules to (i) allocate 
responsibility for RBP Charges to certain Load Serving Entities (“LSE”); (ii) require LSEs 
responsible for RBP Charges to post an appropriate level of credit; and (iii) provide notice 
to LSEs exiting PJM of their continuing responsibility for RBP Charges allocated to them 
through the remainder of the RBP commitment term.4  This FPA section 205 filing is 
 
1 16 U.S.C. § 824d. 
2 18 C.F.R. part 35. 
3 PJM Interconnection, L.L.C., 196 FERC ¶ 61,245 (2026) (“September 29 Order”). 
4 For the purpose of this filing, capitalized terms not defined herein shall have the meaning as contained in 
the PJM Tariff, Amended and Restated Operating Agreement, the Reliability Assurance Agreement Among

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 2 
 
substantively identical to the October 29, 2026 filing submitted in Docket No. ER27-330-
000,5 but merely updates the eTariff metadata code to reflect this filing as a FPA section 
205 filing rather than a compliance filing.6 
PJM requests that most of the proposed revisions become effective on February 28, 
2027—the same effective date for the RBP rules the Commission accepted in the 
September 29 Order.7  However, because PJM is proposing certain pre-conduct of RBP 
activities from Electric Distributors, PJM has proposed one Tariff record to be effective 
January 29, 2027, which is 60 days from the date of the October 29 Fling.  PJM is also 
requesting that the Commission issue an order on all aspects of this filing no later than 
January 29, 2027, to facilitate conduct of the RBP and provide participants the advance 
notice necessary for the efficient administration of the RBP. 
Given that this filing is substantively identical to the October 29  Filing in Docket 
No. ER27-330-000, the deadline for comments and interventions should continue to be 
November 30, 2026, which is 21-days from the date of this filing and the same comment 
deadline that the Commission previously noticed.8  Even accounting for the intervening 
holidays, issuance of an order by January 29, 2027, would still leave the Commission with 
approximately 60 days following the close of the comment period to consider the record 
 
Load Serving Entities in the PJM Region (“RAA”), and the PJM RBP filing under Docket No. ER26-3380-
000.  See PJM Interconnection, L.L.C., Reliability Backstop Procurement to Address Resource Adequacy 
Concerns Stemming from Large Loads, Docket No. ER26-3380-000 (July 31, 2026) (“July 31 Filing”). 
5 PJM Interconnection, L.L.C., Proposed Amendments to the Reliability Backstop Procurement Request for 
Waiver of Tariff Attachment DD, Sections 16.2 and 16.3, Docket Nos. ER27-330-000, -001 (Oct. 29, 2026) 
(“October 29 Filing”). 
6 PJM will withdraw the filing in Docket No. ER26-330-000. 
7 September 29 Order, 196 FERC ¶ 61,245 at P 1. 
8 PJM Interconnection, L.L.C., Combined Notice of Filings #1, Docket No. ER27-330-000 (November 2, 
2026).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 3 
 
and act on the filing.  However, the Commission should not feel constrained to wait until 
January 29, 2027, to issue an order on the proposed RBP rules, but should feel free to issue 
an order whenever it feels appropriate before January 29, 2027. 
In addition, through this filing, PJM also conditionally requests waiver of the 
requirement in Tariff, Attachment DD, section 16.2 for PJM to “investigate the cause for 
the shortage, and recommend corrective action”9 in the event the 2029/2030 Base Residual 
Auction clears short of the reliability requirement.  Likewise, should the 2029/2030 
Delivery Year Base Residual Auction clear short, resulting in three consecutive Delivery 
Years with insufficient capacity procurement, PJM conditionally requests waiver of the 
requirement in Tariff, Attachment DD, section 16.3 that PJM “declare a capacity shortage 
and make a filing with FERC for approval to conduct a Reliability Backstop Auction” 
following three consecutive Delivery Years in which the Base Residual Auction clears 
short.  As discussed below in Part IV, the Commission should grant this one-time, 
prospective waiver. 
I. 
BACKGROUND 
On July 31, 2026, PJM filed a comprehensive proposal to establish the RBP, a 
targeted, one-time procurement mechanism designed to address emerging resource 
adequacy challenges driven principally by the rapid growth of Large Loads and the 
resulting acceleration of capacity needs across the PJM Region.10  In its September 29 
Order, the Commission accepted PJM’s proposed RBP framework, but suspended the 
Tariff revisions for a period of five months and established additional procedures to further 
 
9 Tariff, Attachment DD, section 16.2. 
10 See July 31 Filing.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 4 
 
examine three discrete aspects of the proposal:  cost allocation, Transmission Owner exit 
provisions, and LSE collateral requirements.11  While the Commission initiated a paper 
hearing and a related proceeding under section 206 of the FPA to develop a more complete 
record regarding those issues, it also expressly and strongly encouraged PJM to submit, an 
alternative proposal pursuant to its FPA section 205 filing rights to address the concerns 
identified in the order.12   
PJM submits this section 205 filing in accordance with the Commission’s guidance 
from the September 29 Order.  The revisions proposed herein are carefully tailored to 
address the specific issues identified by the Commission while preserving the fundamental 
structure and policy objectives of the RBP framework that the Commission otherwise 
accepted in the September 29 Order.13  Consistent with the Commission’s direction, this 
filing presents targeted modifications to the RBP’s cost allocation, exit responsibilities, and 
collateral provisions that are intended to resolve the Commission’s remaining areas of 
concern, strengthen the overall design of the RBP, and facilitate timely implementation of 
a mechanism that is needed to address pressing reliability and resource adequacy risks.  By 
narrowing the issues in dispute and building upon the framework that the Commission has 
 
11 September 29 Order, 196 FERC ¶ 61,245 at P 24. 
12 September 29 Order, 196 FERC ¶ 61,245 at P 28. 
13 While 18 CFR § 35.17(d) generally prohibits amendments to tariff sections that are in suspension, good 
cause exists for PJM to request a waiver of 18 CFR § 35.17(d) to the extent necessary given that the 
Commission “strongly encourage[d] PJM to address the issues discussed in the [RBP] order by submitting 
an alternative proposal pursuant to its FPA section 205 filing rights without delay.”  September 29 Order at 
P 28.  Updating the relevant suspended tariff sheets promotes administrative efficiency as it allows PJM to 
address the discrete issues raised by the Commission in its September 29 Order without delay through this 
section 205 filing.  Further, “[t]he Commission has stated that the purpose behind section 35.17 is to limit 
instances in which the Commission and the utility’s customers must confront and evaluate a ‘moving target’ 
of rate levels designed to avoid the consequences of a maximum suspension period.” W. Tex. Util. Co., 30 
FERC ¶ 61,292 (1985).  Here, the Commission issued an abeyance of the paper hearing stemming from 
Docket No. ER26-3380-000 that placed the relevant tariff records in suspension so no such moving target 
exists.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 5 
 
already found generally just and reasonable, this filing will promote administrative 
efficiency, reduce regulatory uncertainty, and enable PJM to move forward with the RBP 
on an expedited basis.14  Through this section 205 filing, PJM has addressed the issues set 
for paper hearing in the September 29 Order. 
PJM respectfully submits that each aspect of the filing is just and reasonable.  
Nevertheless, to facilitate prompt Commission action and avoid further delay in the 
implementation of the RBP, PJM consents to the Commission’s exercise of its authority, 
to the extent permitted under section 205 of the FPA and NRG Power Marketing, LLC v. 
FERC,15 to modify, reject, or sever discrete elements of the proposed Tariff revisions while 
accepting the remainder of the filing.  Such an approach, if deemed necessary by the 
Commission, would preserve the benefits of the proposed reforms and support the timely 
commencement of the RBP. 
II. 
PROPOSED UPDATES THAT ADDRESS ISSUES IDENTIFIED IN THE 
COMMISSION’S SEPTEMBER 29 ORDER 
A. 
PJM Proposes Updates that Directly Address the Commission’s RBP Cost 
Allocation Concerns.  
Under FPA section 205, cost allocation must be grounded in the principle that costs 
are assigned to those who cause them or benefit from the facilities and services provided.16  
At the same time, courts have long recognized that cost causation is not a standard of 
 
14 The pieces of the RBP that are not proposed to be modified through this filing are not further discussed in 
this filing given that the Commission accepted all of the proposed RBP rules in its September 29 Order.  To 
the extent necessary, the Commission may take administrative notice of PJM’s initial RBP filing in Docket 
No. ER26-3380-000.  
15 NRG Power Mktg., LLC v. FERC, 862 F.3d 108, 114-15 (D.C. Cir. 2017). 
16 E.g., Pub. Serv. Elec. & Gas Co. v. FERC, 989 F.3d 10, 13 (D.C. Cir. 2021) (The Commission “has long 
viewed the just-and-reasonable requirement” under FPA section 205 “to incorporate a cost-causation 
principle.” (internal quotation marks and citation omitted)); Ill. Com. Comm’n v. FERC, 576 F.3d 470, 476 
(7th Cir. 2009).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 6 
 
mathematical precision.  Indeed, courts have long recognized that “it would no doubt be 
impossible, even if desirable, to formulate a rate scheme with such precision that each 
customer—or even customer group—is made to bear the exact cost of the service he 
received.”17  Therefore, costs need not be “allocate[d] . . . with exacting precision.”18  
Rather, they need only “be allocated in a manner that is roughly commensurate with the 
benefits received.”19  Consistent with this standard, the Commission possesses broad 
discretion to evaluate whether a proposed cost allocation reasonably aligns cost 
responsibility with causation and benefits.20 
As an initial matter, the Commission largely agreed with the foundational premise 
of PJM’s proposed RBP cost allocation methodology: the costs of procuring new capacity 
to address reliability concerns arising from large load growth should be assigned to the 
zone/areas experiencing that growth.  Specifically, the Commission’s September 29 Order 
explained that: 
allocating RBP costs to Electric Distributor zone/areas based on a 
“snapshot” of load growth between 2026/2027 and 2028/2029, 
adjusted down by qualifying offset capacity, may be just and 
reasonable, because it reasonably assigns costs to those responsible 
for the near-term capacity shortfall.  Thus, such zone/areas benefit 
from procurement of new resources to fill this urgent gap.  We 
generally find that PJM’s proposal to initially assign RBP costs to 
Electric Distributor zone/areas, with the ultimate cost allocation to 
the LSEs as determined by the state and/or [Relevant Electric Retail 
Regulatory Authority (“RERRA”)] and as reported to the Electric 
 
17 Ala. Elec. Coop., Inc. v. FERC, 684 F.2d 20, 28 (D.C. Cir. 1982); see also Sithe/Indep. Power Partners, 
L.P. v. FERC, 285 F.3d 1, 5 (D.C. Cir. 2002) (explaining the Court has consistently upheld rates based on 
cost-causation principles as applied in Alabama Electric Cooperative). 
18 Ill. Com. Comm’n, 576 F.3d at 477 (quoting Midwest ISO Transmission Owners v. FERC, 373 F.3d 1361, 
1369 (D.C. Cir. 2004)). 
19 City Util. of Springfield v. FERC, 185 F.4th 1262, 1271 (D.C. Cir. 2026) (internal quotation marks and 
alteration omitted).   
20 City Util. of Springfield, 185 F.4th at 1273.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 7 
 
Distributor by PJM, may be just and reasonable, as it reflects the 
authority of PJM under the Tariff and respects the authority of the 
states and/or RERRAs.21 
 
The Commission’s concerns were therefore not directed at the underlying cost 
allocation to the zone/area.  Rather, the Commission questioned whether PJM’s use of Load 
Adjustment data provided the most accurate means of identifying the Large Load growth 
that is driving the need for the RBP.22  More particularly, the Commission was concerned 
with “relying on Load Adjustments to measure load growth [because that] may be 
inconsistent or not reasonably capture forecasted load growth or actual large load 
growth.”23  That is, some large loads may be reflected in PJM’s underlying load forecast 
rather than in the incremental Load Adjustments used in PJM’s initial proposal.24  
Consequently, the Commission was concerned that the use of the Load Adjustment delta 
“could lead to the costs imposed on certain entities not being at least roughly commensurate 
with the benefits they will receive from the procurement.”25 
This filing directly addresses the Commission’s concern by allocating the “RBP 
costs to the Electric Distributor zone/areas with the reported new load that is driving the 
need for the procurement.”26  Specifically, rather than relying on Load Adjustment data as 
a proxy for Large Load growth, PJM is proposing to require Electric Distributors outside 
 
21 September 29 Order, 196 FERC ¶ 61,245 at P 154. 
22 PJM is utilizing the recently accepted definition of Large Load to capture only those loads that are end-use 
customer load that has a cumulative peak load of 50 MW or greater at a single electrical site behind one or 
more points of interconnection. 
23 September 29 Order, 196 FERC ¶ 61,245 at P 154. 
24 September 29 Order, 196 FERC ¶ 61,245 at P 155. 
25 September 29 Order, 196 FERC ¶ 61,245 at P 155. 
26 September 29 Order, 196 FERC ¶ 61,245 at P 159.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 8 
 
of a Fixed Resource Requirement (“FRR”) Service Area to report, by no later than seven 
days prior to the commencement of the RBP, the aggregate incremental peak Large Load 
growth between the 2026 actual summer peak and the 2028/2029 Delivery Year expected 
summer peak to PJM.27  This updated approach will better align cost responsibility with 
the specific Large Load growth that necessitates the RBP while preserving the cost-
allocation framework that the Commission otherwise found to be just and reasonable. 
1. 
Requiring Electric Distributors to report the Large Load increase 
between 2026 and the expected 2028/2029 Delivery Year will allow 
RBP cost allocation to all incremental Large Loads. 
Requiring each Electric Distributor to report the aggregate incremental Large Load 
growth between the 2026 actual summer peak and the 2028/2029 Delivery Year expected 
summer peak is consistent with Commission precedent.28  Indeed, Electric Distributors 
already report actual and forecasted peak loads to PJM today.  This proposal merely 
requires Electric Distributors to provide a more granular subset of information relating 
specifically to Large Load growth.  Under this proposal, each Electric Distributor outside 
an FRR Service Area will be required to report the aggregate incremental quantity of Large 
Load, where the Large Load quantity for each load is calculated as the difference between: 
(1) the actual summer peak load associated with the Large Load in 2026; and (2) the 
expected summer peak load associated with Large Load for the 2028/2029 Delivery Year.29  
 
27 Proposed Tariff, Attachment DD, section 18.3A. 
28 See PJM Interconnection, L.L.C., 197 FERC ¶ 61,019, at PP 48-50 (2026); see also PJM Interconnection, 
L.L.C., 188 FERC ¶ 61,200, at P 40 & n.65 (2024) (finding that an “Electric Distributor is the party with the 
distribution and metering facilities defining a zone/area and responsible for reporting load information to 
PJM,” and also noting that, “under the current framework, each LSE already reports their peak load 
contribution to the Electric Distributor, which is the entity ultimately responsible for reporting that 
information to PJM”). 
29 Proposed Tariff, Attachment DD, section 18.3A.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 9 
 
Additionally, Electric Distributors will be required to report the identity of the Large Load 
that is supported by an electric service obligation, construction commitment, or equivalent 
agreement.30  Because Electric Distributors maintain the direct distribution and metering 
relationships associated with these loads and already serve as PJM’s primary source of 
zonal load information, they are uniquely and aptly positioned to provide the most accurate 
and comprehensive information regarding incremental Large Load growth. 
Consistent with PJM’s load forecasting process, the expected quantity of Large 
Load for the 2028/2029 Delivery Year reported under this proposal should largely align 
with the information the Electric Distributor previously provided to PJM for development 
of the applicable load forecast.  However, because Large Load development is dynamic, 
circumstances may change after submission of forecast data and before the reporting of 
Large Load values for purposes of establishing the Reliability Pricing Model (“RPM”) 
procurement targets.  This could potentially include new Large Loads that are now 
expected to be online by the 2028/2029 Delivery Year that may not have previously been 
expected at the time PJM developed the load forecast.  Conversely, there could be electric 
service agreements with Large Loads that are canceled between the time Electric 
Distributors initially reported the data as part of PJM’s load forecast process and when the 
Electric Distributors report expected Large Loads for RBP purposes.  In either case, the 
proposal requires an Electric Distributor to “provide an explanation for any deviation 
between the expected quantity of Large Loads for the 2028/2029 Delivery Year and the 
values provided by the Electric Distributor to [PJM] as part of the development for the load 
 
30 Proposed Tariff, Attachment DD, section 18.3A.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 10 
 
forecast.”31  As always, PJM maintains the ability to refer Electric Distributors to the 
Commission’s Office of Enforcement in the event the reported information is significantly 
different from what the Electric Distributor reported as part of PJM’s load forecast 
development process and such deviations are not sufficiently explained.  This requirement 
safeguards against potential incorrect submissions while allowing PJM to rely on the most 
current available information. 
The proposed approach also satisfies the Commission’s cost-causation standards 
because it assigns costs in a manner that is roughly commensurate with the benefits 
received.32  Cost causation requires that “all approved rates reflect to some degree the costs 
actually caused by the customer who must pay them.”33  Indeed, as the courts have held, 
“nothing requires the Commission to ensure full or perfect cost causation,”34 and the 
Commission “is not bound to reject any rate mechanism that tracks the cost causation 
principle less than perfectly.”35   
Here, the data reported by Electric Distributors represent the most practical and 
administratively feasible measure of incremental Large Load growth for purposes of 
establishing a cost allocation approach that will assign costs to the zone/areas where the 
 
31 Proposed Tariff, Attachment DD, section 18.3A. 
32 Ill. Com. Comm’n, 576 F.3d at 477 (requiring “an articulable and plausible reason to believe that the 
benefits are at least roughly commensurate with [the costs]”); Transmission Planning and Cost Allocation by 
Transmission Owning and Operating Public Utilities, Order No. 1000, 136 FERC ¶ 61,051, at PP 622, 639 
(2011) (requiring costs of regional transmission facilities to be allocated in a manner that is at least roughly 
commensurate with estimated benefits), order on reh’g & clarification, Order No. 1000-A, 139 FERC 
¶ 61,132, order on reh’g & clarification, Order No. 1000-B, 141 FERC ¶ 61,044 (2012), aff’d sub nom., S.C. 
Pub. Serv. Auth. v. FERC, 762 F.3d 41 (D.C. Cir. 2014) (“South Carolina PSA”).   
33 K N Energy v. FERC, 968 F.2d 1295, 1300 (D.C. Cir. 1992) (emphasis added); see also Midwest ISO 
Transmission Owners, 373 F.3d at 1368 (quoting K N Energy, 968 F.2d at 1300)). 
34 South Carolina PSA, 762 F.3d at 88.    
35 Sithe/Indep. Power Partners, 285 F.3d at 5.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 11 
 
incremental Large Loads will be located.  While no cost allocation methodology can 
achieve perfect precision, the Commission has repeatedly recognized that feasibility 
considerations are relevant and that cost-causation principles need only be applied in a 
reasonably accurate and practical manner.36  By relying on Electric Distributor’s reported 
incremental Large Load growth at the zonal or area level, the proposal tracks the costs 
associated with emerging Large Load demand to the most granular level that is reasonably 
feasible and therefore satisfies the Commission’s cost-causation requirements. 
To be clear, the information required under this proposal will initially be reported 
separately from the Large Load Registry that the Commission recently accepted because 
the information required from the Electric Distributors serves a different purpose.  
Specifically, the reporting requirement here is targeted to quantify incremental Large Load 
growth between 2026 and the 2028/2029 Delivery Year for purposes of establishing the 
Initial RBP Target.  Nonetheless, to the extent appropriate, certain information submitted 
through this process may ultimately be incorporated into the Large Load Registry. 
2. 
RBP costs will be allocated to the zone/areas associated with 
incremental Large Loads. 
Based on information provided by Electric Distributors, PJM will allocate the 
Initial RBP Target among Electric Distributor zone/areas in proportion to each zone/area’s 
share of the total incremental Large Load growth.  PJM will then reduce a zone/area’s 
allocated share to the extent PJM receives the requisite evidence, as detailed in Tariff, 
 
36 South Carolina PSA, 762 F.3d at 88; Midwest ISO Transmission Owners, 373 F.3d at 1368-69; Pub. Serv. 
Comm’n of Wis. v. FERC, 545 F.3d 1058, 1066-67 (D.C. Cir. 2008); Carnegie Nat. Gas Co. v. FERC, 968 
F.2d 1291, 1293-94 (D.C. Cir. 1992) (noting that, in the section of the Natural Gas Act likened to FPA section 
205, there is “no requirement in the Act itself that rates precisely match cost causation and responsibility” 
and that instead “the Commission may rationally emphasize other, competing policies and approve measures 
that do not best match cost responsibility and causation”).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 12 
 
Attachment DD, section 18.2(c),37 of new capacity in the form of Qualifying RBP Offset 
UCAP MW that is the subject of a bilateral agreement with a Large Load.38  In addition, 
to the extent an Electric Distributor requests, with the required accompanying support 
pursuant to Tariff, Attachment DD, section 18.1(d), that the Initial RBP Target be 
decremented to reflect the associated MW quantity of load participating in a qualifying 
Peak Shaving Adjustment program, the Initial RBP Target may be further reduced.39  After 
accounting for all Qualifying RBP Offset UCAP MW and any applicable Peak Shaving 
Adjustment opt-out, PJM will determine each zone/area’s adjusted incremental Large Load 
quantity.  That quantity, floored at zero, will serve as the basis for calculating the 
zone/area’s pro rata share of the Final RBP Target MW.  Ms. Danielle Croop, PJM’s senior 
manager of market design, provides a detailed example that demonstrates how the RBP 
obligations will be allocated to each Electric Distributor’s zone/area.40 
This approach is consistent with the Commission’s determination that “[a]llocating 
RBP costs based on a snapshot of this shortfall over the term of the RBP commitment 
period may provide greater certainty to the LSEs in the Electric Distributor zone/areas 
ultimately bearing responsibility for those costs.”41  Accordingly, PJM proposes to 
continue using a snapshot of incremental Large Load growth between the 2026 summer 
peak and the forecasted summer peak for the 2028/2029 Delivery Year to establish each 
 
37 Specifically, evidence of Qualifying RBP Offset UCAP MW must include signed bilateral contracts with 
Large Loads for at least five Delivery Years with a commercial operation date prior to the start of the 
2032/2033 Delivery Year as further detailed in Tariff, Attachment DD, section 18.2(c). 
38 Proposed Tariff, Attachment DD, section 18.2(c). 
39 Proposed Tariff, Attachment DD, section 18.1(d). 
40 Affidavit of Danielle Croop on Behalf of PJM Interconnection, L.L.C. (Attachment D) ¶¶ 19-27 (“Croop 
Aff.”). 
41 September 29 Order, 196 FERC ¶ 61,245 at P 156.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 13 
 
zone/area’s share of the Final RBP Target MW.  That allocation to the zone/area will 
remain fixed throughout the 15-year RBP commitment period.  Maintaining a fixed 
allocation to the zone/area promotes certainty, provides transparent cost responsibility at 
the outset of the commitment period, and avoids repeated reallocation of costs to different 
zone/areas during the term of the RBP Resource commitment. 
3. 
PJM will further allocate RBP Charges to relevant LSEs in the 
zone/areas with incremental Large Loads. 
PJM is retaining the mechanism through which RBP Charges may be more 
granularly allocated to LSEs within an Electric Distributor’s zone/area.  As noted, above, 
the September 29 Order held that “the ultimate cost allocation to the LSEs as determined 
by the state and/or RERRA and as reported to the Electric Distributor . . . may be just and 
reasonable[.]”42  Specifically, RBP Charges may be allocated 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].”43  Likewise, 
PJM is maintaining the term, “RBP Obligation” or “RBO” to provide flexibility for states 
and/or RERRAs to further determine which retail customers should be allocated RBP 
Charges.44 
The RBO framework provides states and RERRAs, through the relevant Electric 
Distributors, with flexibility to determine how cost responsibility for RBP Resources 
should be allocated among LSEs serving load within a zone/area.  To facilitate more 
 
42 September 29 Order, 196 FERC ¶ 61,245 at P 154. 
43 Tariff, Attachment DD, section 18.3(b)(iii). 
44 Tariff, Part 1, Definitions – R-S, RBP Obligation (‘“RBP Obligation’ or ‘RBO’ shall mean the state and/or 
RERRA-determined allocation of RBP UCAP MW to Load Serving Entities within each Electric 
Distributor’s zone/area.”).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 14 
 
targeted cost allocation, an Electric Distributor may report to PJM an RBO allocation 
identifying the RBP UCAP MW assigned to individual LSEs in the zone/area.  Where an 
RBO is reported, PJM will allocate the daily RBP Charges to each LSE based on its 
proportionate share of the reported RBO MW.  In this way, states and RERRAs may direct 
relevant Electric Distributors to report RBO so that RBP costs can more precisely be 
allocated to the LSEs serving the Large Loads that drive the need for the RBP Resources. 
Electric Distributors electing to provide RBO allocations must submit the initial 
allocation no later than 120 days before the start of the 2028/2029 Delivery Year.45  PJM 
proposes this deadline to allow sufficient time for the calculation and communication of 
each affected LSE’s credit requirements before collateral must be posted.  PJM has 
advanced this deadline from the 60-day period proposed in the July 31 Filing to provide 
LSEs with additional notice regarding their potential credit obligations and adequate time 
to arrange and post collateral.  Importantly, the 120-day reporting deadline serves solely to 
establish the initial allocation sufficiently in advance of the commencement of the 
2028/2029 Delivery Year.  That is, Electric Distributors do not have a continuing obligation 
to report RBO to PJM by a certain deadline prior to the commencement of a subsequent 
Delivery Year after the 2028/2029 Delivery Year.  Rather, Electric Distributors may report 
updates to the RBO any time after the start of the 2028/2029 Delivery Year to reflect 
changes to the initial allocation.  This may occur, as an example, if a Large Load switches 
LSEs after the initial RBO is reported to PJM.  
 
45 Proposed Tariff, Attachment DD, section 18.3(b)(iii).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 15 
 
PJM must be able to settle RBP Charges regardless of whether an Electric 
Distributor submits an RBO allocation.  Accordingly, if no RBO MW are reported for a 
zone/area, PJM will apply a backstop allocation methodology based on the existing 
methodology for allocating capacity costs pursuant to RAA, Schedule 8.46  Under this 
approach, if no allocation is reported by the relevant Electric Distributors with allocated 
RBP UCAP MW, PJM will allocate RBP Charges among LSEs in the relevant zone/area 
using each LSE’s proportional Daily Unforced Capacity Obligation.  This fallback 
methodology allows PJM to calculate and settle wholesale charges among its jurisdictional 
customers even in the absence of state- or RERRA-directed RBO allocations. 
4. 
The proposed allocation methodology respects the federal-state 
jurisdictional boundary; cost allocation to retail customers, 
including data centers, is within the states’ and/or RERRAs’ 
purview.  
The proposed methodology also appropriately respects the longstanding division of 
jurisdiction between PJM and the states.  As the Commission recognized, “states determine 
how Commission-approved rates are collected among the relevant retail consumers along 
with the rates for state-jurisdictional matters.”47  Consistent with that principle, PJM’s 
proposal governs only the allocation of RBP Charges among wholesale market 
participants, specifically the LSEs responsible for paying those charges. 
 
46 Proposed Tariff, Attachment DD, section 18.3(b)(iii) (“If no RBO MW are reported to the Office of the 
Interconnection for an Electric Distributor zone/area, PJM will allocate the RBP Charges for that zone/area 
to all load in the zone/area using each LSE’s ratio share of the Daily Unforced Capacity Obligation for the 
zone/area as determined in RAA, Schedule 8.  PJMSettlement shall be the Counterparty to each LSE’s 
obligation to pay, and payments of, RBP Charges.”).    
47 September 29 Order, 196 FERC ¶ 61,245 at P 161 (quoting PJM Interconnection, L.L.C., 195 FERC 
¶ 61,211, at P 69 (2026)).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 16 
 
PJM does not propose, and lacks authority, to dictate how any LSE subsequently 
allocates or recovers those costs from retail customers.  Thus, even where PJM applies its 
default LSE-level allocation methodology because no RBO has been reported, PJM would 
not determine how costs are ultimately assigned among retail customers served by those 
LSEs.  In this way, the proposed approach appropriately allocates wholesale cost 
responsibility while preserving the ability of states and RERRAs to determine how those 
costs should be reflected at the retail level.  In short, the proposal maintains a framework 
through which states and RERRAs may, if they choose, direct RBP costs more precisely 
to the specific Large Load retail customers whose load growth drives the need for the 
underlying RBP Resources. 
B. 
Credit Requirements of LSEs Commensurate with Risks (Proposed Tariff, 
Attachment DD, Section 18.8). 
PJM is proposing revisions to the LSE credit rules in Tariff, Attachment DD, 
section 18.8(b) that the Commission accepted, subject to refund and further procedures, in 
the September 29 Order.   
In the July 31 Filing, and as accepted subject to the outcome of a paper hearing, 
PJM proposed to establish an initial RBP Credit Rate of $1.5 million per committed RBP 
UCAP MW, which would collateralize approximately 50% of the (up to) 15-year 
contractual payment obligation to the committed RBP Resources.  The Commission 
identified several issues that, “[t]aken together,” led the Commission to find that PJM’s 
initial RBP LSE credit rules may be unjust and unreasonable.48  Specifically, the 
Commission indicated that PJM did not adequately support the level of RBP Charges that 
 
48 September 29 Order, 196 FERC ¶ 61,245 at P 205.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 17 
 
PJM asserted needed to be collateralized “with any quantitative measures, including an 
expected probability of default, a loss-given-default assumption, a historical LSE default 
experience, a liquidation or replacement period, or any other quantitative measure.”49  The 
Commission also found that PJM’s proposed LSE credit rules provided LSEs “little 
flexibility . . . to manage their collateral requirements, including a short timeline for 
[learning of] and posting collateral and limited, acceptable forms of collateral.”50  Thus, 
the Commission held that PJM did not demonstrate that its proposed approach struck “a 
reasonable balance . . . against the risk of default and ensuring market participants have 
adequate flexibility to manage their collateral requirements.”51 
PJM has re-evaluated its initial proposal in light of the Commission’s guidance and 
developed a new RBP Credit Rate along with revisions to other aspects of the LSE credit 
rules to provide LSEs greater flexibility.  PJM proposes five broad changes to the RBP 
LSE credit rules: 
(1) establish, using objective data, a revised uniform credit rate, based on 
quantitative analyses, for LSEs allocated responsibility for RBP Charges to post 
collateral;52  
(2) lengthen the timeframe from when an LSE is assigned responsibility for RBP 
Charges before a Delivery Year to the time by which collateral must be 
posted;53  
(3) broaden the instruments that may be used to provide collateral to include surety 
bonds in addition to Letters of Credit and cash;54   
 
49 September 29 Order, 196 FERC ¶ 61,245 at P 205. 
50 September 29 Order, 196 FERC ¶ 61,245 at P 205. 
51 September 29 Order, 196 FERC ¶ 61,245 at P 205. 
52 See proposed Tariff, Attachment DD, section 18.8(b)(i)(B). 
53 See proposed Tariff, Attachment DD, section 18.3(b)(iii) and proposed Tariff, Attachment DD, 
section 18.8(b)(i)(B). 
54 See proposed Tariff, Part 1, Definitions – R-S, RBP Collateral.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 18 
 
(4) memorialize a commitment to review the RBP Credit Rate used to determine 
the credit requirement for LSEs assigned responsibility for RBP Charges;55 and  
(5) clarify that an LSE’s payment obligations for committed RBP Resources, i.e., 
both RBP Charges and associated RPM capacity payments will not be 
considered in determining such LSE’s Peak Market Activity.56   
As discussed below, these revisions offer an approach that strikes “a reasonable balance 
between protecting PJM’s markets and its members against the risk of default and ensuring 
that market participants have adequate flexibility to manage their collateral 
requirements.”57   
1. 
PJM is proposing a revised RBP Credit Rate, determined using 
objective, quantitative analyses, for LSEs allocated responsibility 
for RBP Charges.  
a. 
PJM derived the revised RBP Credit Rate based on an 
economic analysis of quantitative and qualitative inputs. 
The 15-year term of RBP commitments is markedly different from all other forward 
payment obligations contemplated by PJM’s credit rules today.  To address this credit risk 
in a just and reasonable manner, PJM considered a number of different approaches with an 
eye toward approaches that would minimize costs to LSEs and appropriately mitigate cost 
of socialized default on PJM Members.  Specifically, PJM considered credit approaches 
that would provide more fluid and constant assessments of credit risk and vary the 
collateral required, based on either new data as it becomes known (e.g., RPM Auction 
clearing prices) or forecasts of variable data (e.g., RPM Auction clearing prices).  But, as 
Ms. Gwen Kelly explains, an approach based on forecasts would fail to adequately mitigate 
 
55 See proposed Tariff, Attachment DD, section 18.8(b)(i)(A). 
56 See proposed Tariff, Attachment DD, section 18.8. 
57 PJM Interconnection, L.L.C., 186 FERC ¶ 61,055, at P 27 (2024).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 19 
 
risk to Members as “PJM could be left with insufficient collateral to secure the LSE’s 
payment obligations”58 because their efficacy would be dependent on the accuracy of 
“forecasts of RPM clearing prices extending many years into the future.”59  Ultimately, as 
proposed in this filing, PJM selected an approach that collateralizes the entire payment 
obligation to an RBP Resource, i.e., both the BRP Charge (which is a contract for 
difference) and the resource’s RPM capacity payment.  As Ms. Kelly testifies, “PJM favors 
a methodology that establishes meaningful credit protection based on long-term RBP 
commitments rather than making that protection substantially dependent on forecasts of 
future RPM clearing prices or on the ability to obtain additional collateral over time.”60  
That is, PJM’s approach does not require forecasting of future RPM clearing prices or 
annual adjustments based on the applicable RPM capacity payment for a given Delivery 
Year.  Rather, PJM is maintaining its initial approach of establishing a single credit 
obligation applicable to the entire RBP payment obligation through application of a 
uniform RBP Credit Rate for each RBP UCAP MW for which an LSE is assigned cost 
responsibility.   
However, PJM determined that its approach to determining the RBP Credit Rate 
should be revisited.  Ms. Kelly testifies that “PJM sought to identify the collateral 
percentage at which the combined expected costs of posting collateral and socialized 
default amounts are minimized.”61  Given that “[t]hese costs generally move in opposite 
 
58 Affidavit of Gwen Kelly on Behalf of PJM Interconnection, L.L.C. (Attachment C) ¶ 13 (“Kelly Aff.”). 
59 Kelly Aff. ¶ 11. 
60 Kelly Aff. ¶ 14. 
61 Kelly Aff. ¶ 19.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 20 
 
directions,”62 PJM “performed an economic analysis evaluating the cost of posting 
collateral and the expected cost of socialized default amounts at different collateral levels, 
expressed as percentages of the net present value of the total RBP payment obligation” to 
determine the appropriate collateral percentage, i.e., the RBP Credit Rate.63  In performing 
this economic analysis, PJM considered the following inputs:  the weighted-average RBP 
clearing price, the credit quality of the portfolio of LSEs active in PJM, the probability of 
default, the loss given default, and the cost of posting collateral.64   
Ms. Kelly details in her affidavit how PJM developed and considered these 
quantitative and qualitative inputs.65  The results of PJM’s economic analysis is presented 
in Table 1 below. 
 
62 Kelly Aff. ¶ 18. 
63 Kelly Aff. ¶ 22. 
64 Kelly Aff. ¶ 23.  Ms. Kelly also testifies that “PJM has used a discount rate of 9.5%, based on the capacity 
market Weighted Average Cost of Capital developed by The Brattle Group as part of PJM’s 2025 periodic 
review of the Cost of New Entry of Capacity Resources into the PJM Region.  PJM considers this rate 
appropriate for purposes of calculating the net present value of the total RBP payment obligation.”  Kelly 
Aff. ¶ 24.   
65 See Kelly Aff. ¶¶ 25-38.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 21 
 
Table 1: Cost of Socialized Default Amount 
 
PJM then took these inputs to evaluate “the combined expected costs of posting collateral 
and socialized default amounts at different collateral levels, expressed as percentages of 
the discounted total RBP payment obligation.”66  Ms. Kelly explains that “the combined 
cost of posting collateral and expected socialized default amounts is minimized at a 
collateral level equal to 40% of the net present value of the total RBP payment 
obligation,”67 as shown in Figure 1 below. 
 
66 Kelly Aff. ¶ 39. 
67 Kelly Aff. ¶ 40. 
a) LSE Credit Ratings (weighted average)
BBB
b) Probability of Default
4.05%
c) Loss Given Default
100%
d) expected default %
2.4%
adjusted by the amount 
posted to PJM
e) Defaulted Amount
$73,839 =$555 x 1 x 365 x 15 x 2.4%
f) Collateral Held
$29,535 =$73,839 x 40%
g) Socialized Amount (=Defaulted Amount- Collateral Held)
$44,303 =$73,839 - $29,535
h) Socialized Cost to Non Default LSEs
$45,407 =$44,303 / (1-2.4%)

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 22 
 
Figure 1: Optimal Collateralization  
 
As Ms. Kelly explains, this 40% rate “does not represent the percentage of gross RBP 
payments that PJM expects LSEs to pay through contract-for-differences settlements,” 
rather, it represents the rate at which “the combined cost of posting collateral and expected 
socialized default amounts” are minimized.68  Or stated another way, it is an economically 
optimal rate.   
In sum, following the Commission’s guidance in the September 29 Order,69 PJM 
performed an economic analysis, that considered the qualitative measure of the credit 
quality of the portfolio of LSEs active in PJM and the quantitative measure of probability 
of default, the loss given default, and the cost of posting collateral.  Based on such analysis, 
 
68 Kelly Aff. ¶ 42.  
69 See September 29 Order, 196 FERC ¶ 61,245 at P 205 (finding that PJM did not support the initial RBP 
Credit Rate “with any quantitative measures, including an expected probably of default, a loss-given-default 
assumption, a historical LSE default experience, a liquidation or replacement period, or any qualitative 
measure”).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 23 
 
PJM proposes to set the RBP Credit Rate at 40% of the net present value of the total RBP 
payment obligation.70  
Applying the proposed new RBP Credit Rate at an assumed weighted-average RBP 
clearing price of $555/MW-day, Ms. Kelly finds that “the proposed methodology produces 
an illustrative RBP Credit Rate of approximately $686,000 per MW.  This amount is 
equivalent to approximately 3.4 years of undiscounted RBP payments per MW.”71  This 
represents a significant reduction from the $1.5 million/MW RBP Credit Rate PJM initially 
proposed—a reduction in cost to post to affected LSEs which naturally results in a tradeoff 
reduction in the collateral coverage that protects PJM Members against socialized default 
amounts.  Given that for the purposes of this example PJM assumed the weighted-average 
RBP clearing price would be at maximum allowable value of $555/MW-day,72 the 
illustrative RBP Credit Rate of approximately $686,000 per MW is the highest possible 
RBP Credit Rate and would be lower to the extent the MW-weighted average of the 
levelized procurement cost of all committed RBP Resources is less than $555/MW-day. 
b. 
Clarifying revisions for determining cumulative LSE RBP 
Credit Requirement 
As noted, PJM is retaining its initial structure of first determining the overall credit 
requirement needed to address this risk at an aggregate level before then determining an 
individual LSE’s RBP credit requirement.  PJM will determine the cumulative LSE RBP 
credit requirement equal to “the RBP Credit Rate (as determined in accordance with Tariff, 
 
70 See proposed Tariff, Attachment DD, section 18.8(b)(i)(A).  Ms. Kelly explains how PJM will determine 
the net present value of the total RBP payment obligation.  See Kelly Aff. ¶ 24. 
71 Kelly Aff. ¶ 48. 
72 See September 29 Order, 196 FERC ¶ 61,245, at P 74 (“[W]e find that using the $555/MW-day price cap 
for the 2028/2029 BRA . . . is a reasonable proxy of load’s maximum willingness to pay for RBP capacity.”)

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 24 
 
Attachment DD, section 18.8(b)(i)(B)) multiplied by the committed RBP UCAP MW 
amount.”73  That is, one uniform RBP Credit Rate will be applicable to all committed RBP 
UCAP MW, and the cumulative RBP credit requirement for LSEs shall be met through 
RBP Collateral posted by those LSEs with responsibility for RBP Charges pursuant to 
Tariff, Attachment DD, section 18.3. 
However, PJM is proposing revisions to clarify that the committed RBP UCAP 
MW for such purpose will be the “total amount of RBP UCAP MW that receives a 
commitment through the Reliability Backstop Procurement and is supported by an RBP 
Resource that has reached commercial operation by the start of the applicable Delivery 
Year.”74  And, the committed RBP UCAP MW “shall exclude” any RBP UCAP MW that 
is rescinded pursuant to Tariff, Attachment DD, section 18.6(e).75  In other words, no 
collateral would be required for RBP Resources not in service for that Delivery Year. 
c. 
Clarifying revisions regarding PJM’s return of excess 
collateral 
While the accepted Tariff provides that PJM will reduce the RBP Credit Rate “when 
total posted RBP Collateral is greater than the total remaining RBP Charges obligations 
over time by the Office of the Interconnection to an amount sufficient to cover the total 
existing RBP Charges obligations,”76 PJM proposes to not change the RBP Credit Rate in 
such instance.  Rather, PJM proposes that “[w]hen total posted RBP Collateral is greater 
than the total remaining RBP payment of obligations, the Office of the Interconnection will 
 
73 Proposed Tariff, Attachment DD, section 18.8(b)(i)(A).  
74 Proposed Tariff, Attachment DD, section 18.8(b)(i)(A). 
75 Proposed Tariff, Attachment DD, section 18.8(b)(i)(A). 
76 Tariff, Attachment DD, section 18.8(b)(i)(A).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 25 
 
make available excess collateral, upon request by an applicable Load Serving Entity.”77  
That is, PJM will only be holding collateral sufficient to cover about 3.4 years of remaining 
RBP payment obligations (the sum of RBP Charges and RPM payments).  Thus, as the 
RBP commitment period carries on, the new approach affords PJM flexibility to release 
excess collateral while maintaining sufficient collateral to mitigate against default risk.   
d. 
Clarifying revisions for the determination of the RBP LSE 
credit requirement 
PJM proposes to maintain its approach that the RBP credit requirement will follow 
cost allocation for RBP Resources.  Thus, only those LSEs allocated cost responsibility 
will be assigned an RBP credit requirement and be required to post RBP Collateral, and 
the RPM credit requirement will be based on the level of RBP UCAP MW for which an 
LSE is allocated cost responsibility.  In this manner, the RBP credit requirement is aligned 
with cost allocation. 
PJM is proposing new Tariff language to clarify the determination of an LSE’s RBP 
credit requirement, which will still equal the product of (1) the uniform RBP Credit Rate; 
and (2) the LSE’s allocated RBP UCAP MW amount, i.e., its Allocated RBP Credit MW.  
First, reflective of PJM’s movement from a stated RBP Credit Rate to one based on a 
percentage of the payment obligation, PJM is proposing to define RBP Credit Rate as “an 
amount per MW equal to 40% of the discounted total RBP payment obligation per MW 
over the applicable RBP commitment term, calculated using the weighted-average RBP 
clearing price of all RBP UCAP MW committed through the RBP.”78  Second, for clarity 
 
77 Proposed Tariff, Attachment DD, section 18.8(b)(i)(A). 
78 Proposed Tariff, Attachment DD, section 18.8(b)(i)(B).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 26 
 
and ease of understanding and application, PJM is defining “Allocated RBP Credit MW” 
as “the amount of RBP UCAP MW, expressed in MW, for which the LSE has been 
allocated responsibility for RBP Charges in accordance with Tariff, Attachment DD, 
section 18.3 and as determined in accordance with this Tariff, Attachment DD, 
section 18.8(b)(i)(B)(1) or (2), as appropriate.”79   
Accepted sections 18.8(b)(i)(B)(1) and (2) detail how an LSE allocated cost 
responsibility determine the amount of collateral they need to post.  While PJM is not 
proposing to change this structure, PJM is proposing some revisions to reflect the new RBP 
Credit Rate and clarify the determination of an LSE’s Allocated RBP Credit MW.  PJM is 
also taking the opportunity to make some wordsmithing revisions for ease of 
understanding.80  Specifically, PJM is clarifying that, in the event the LSE’s cost allocation 
is determined through an RBO, PJM will determine its Allocated RBP Credit MW “based 
on the relevant Load Serving Entity’s percent share of the zone/area’s RBP Obligation MW 
assigned by the Electric Distributor,”81 instead of scaling the RBP Obligation MW “in the 
event the total the RBP Obligation MW values uploaded by the Electric Distributor do not 
sum to the fixed, Final RBP Target MW for the zone/area.”82 
2. 
PJM is proposing to lengthen the timeframe from when an LSE is 
assigned responsibility for RBP Charges to the time by which 
collateral must be posted from 15 days to 75 days.  
PJM is proposing that LSEs be provided at least 75 days’ notice of their collateral 
obligation prior to a given Delivery Year before the LSE must have the requisite RBP 
 
79 Proposed Tariff, Attachment DD, section 18.8(b)(i)(B). 
80 See proposed Tariff, Attachment DD, section 18.8(b)(i)(B)(1) and (2) (wordsmithing revisions). 
81 Proposed Tariff, Attachment DD, section 18.8(b)(i)(B)(1). 
82 Tariff, Attachment DD, section 18.8(b)(i)(B)(1).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 27 
 
Collateral posted.  That is, PJM is not changing the rule that LSEs must post RBP Collateral 
at least 45 days before the start of a Delivery Year in which the LSE is allocated 
responsibility for RBP Charges.83  Rather, as discussed above in Part II.A, PJM is 
proposing that Electric Distributors report their initial RBP Obligation values to PJM at 
least 120 days prior to the start of the 2028/2029 Delivery Year.  PJM is not proposing to 
change the rule that if no RBP Obligation is reported for an Electric Distributor zone/area, 
then RBP Charges allocated to that zone/area will be assign to each LSE “using each LSE’s 
ratio share of the Daily Unforced Capacity Obligation for the zone/area as determined in 
RAA, Schedule 8.”84   
Thus, each LSE will know no later than 120 days before the 2028/2029 Delivery 
Year whether it will be assigned RBP Charges and if so, how much.  Correspondingly, by 
applying the uniform RBP Credit Rate to the MW underlying its assigned RBP Charges, 
each LSE will also be able to easily determine its RBP Collateral requirement 120 days 
before the start of the 2028/2029 Delivery Year.  As such, LSEs will be afforded at least 
75 days to post their RBP Collateral, providing LSEs greater flexibility to manage their 
collateral requirements. 
3. 
PJM is proposing to broaden the forms of acceptable collateral to 
include surety bonds.  
In response to the Commission’s assertion that PJM’s initial LSE credit rules 
errantly “limited . . . acceptable forms of collateral”85 to Letters of Credit and cash, PJM 
 
83 Compare July 31 Filing, Attachment B at proposed Tariff, Attachment DD, sections 18.8(b)(i)(B)(1), (2), 
with proposed Tariff, Attachment DD, sections 18.8(b)(i)(B)(1), (2). 
84 Tariff, Attachment DD, section 18.3(b)(iii). 
85 September 29 Order, 196 FERC ¶ 61,245 at P 205.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 28 
 
re-assessed whether it could accept other forms of collateral, and determined that it also 
could accept surety bonds.  Accordingly, PJM is proposing to revise the definition of RBP 
Collateral to include surety bonds,86 providing LSEs additional flexibility to manage their 
collateral requirements.  As Ms. Kelly testifies, all three of these acceptable forms of 
collateral “provide [PJM] reliable financial protection that PJM can access promptly when 
necessary, without conditions that could delay or impair its ability to obtain payment.”87   
From the start, PJM considered the unsecured credit available from existing Market 
Participants.  But, as PJM explained in the initial RBP proceeding, there are two primary 
reasons that unsecured credit is not an appropriate form of collateral for RBP payment 
obligations.  One, PJM’s experience “has shown that, generally speaking, Market 
Participants used their full amount of unsecured credit to cover their Peak Market Activity 
credit obligations associated with those periods.”88  Two, the ability of the entity proffering 
the unsecured credit to “access to liquidity may . . . evaporate [during the up to 15-year 
term of the RBP contract], making it functionally unable to post additional collateral 
precisely when default risk rises.”89  In short, Market Participants already use all their 
unsecured credit available today so none is available to cover a 15-year payment obligation.  
And, even if some were available, it is not a form of collateral you can draw down on, and 
 
86 Proposed Tariff, Part 1, Definitions – R-S, RBP Collateral (“‘RBP Collateral’ shall mean any one of: (1) a 
cash deposit, including any interest thereon, (2) a surety bond with a provider, amount and form determined 
by and acceptable to PJM or PJMSettlement, or (3) a letter of credit issued for the benefit of PJM or 
PJMSettlement, with a provider, amount and form determined by and acceptable to PJM or 
PJMSettlement.”). 
87 Kelly Aff. ¶ 57. 
88 PJM Interconnection, L.L.C., Motion for Leave to Answer and Answer of PJM Interconnection, L.L.C., 
Docket No. ER26-3380-000, at 85 (Sep. 10, 2026) (“PJM RBP Answer”). 
89 PJM RBP Answer at 85.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 29 
 
it is not convertible to cash.  In addition, RBP’s long-term payment obligation precludes 
PJM having the requisite confidence in the ability to draw on an unsecured credit to 
meaningfully cover the payment obligation.  Therefore, allowing an LSE’s credit 
requirement to be met through unsecured credit would inappropriately shift the default risk 
to PJM’s Members. 
4. 
Upon garnering sufficient experience, PJM will review the RBP 
Credit Rate and will present any recommendations to stakeholders. 
Things change over time; PJM recognizes that.  The quantitative and qualitative 
analysis that support the proposed RBP Credit Rate could change over time such that a 
review of the RBP Credit Rate may be warranted in order for the LSE credit requirement 
to continue to “strike a reasonable balance . . . against the risk of default and ensuring 
market participants have adequate flexibility to manage their collateral requirements.”90  
Accordingly, PJM is proposing to memorialize in its Tariff a requirement for PJM to review 
the RBP Credit Rate “[f]ollowing the commencement of commercial operation of all 
Capacity Resources with RBP commitments.”91  This review will look at the inputs used 
to the determine the RBP Credit Rate, allowing PJM to identify whether and to what degree 
changes in the inputs over time may affect the RBP Credit Rate.  In other words, PJM 
would evaluate the inputs discussed in Part II.B.1 above, including, for example, changes 
in the weighted-average credit rating of the portfolio of LSEs operating in PJM and the 
cost incurred by LSEs in providing collateral (e.g., the five-year historical trend in the 30-
day average Secured Overnight Financing Rate).  As Ms. Kelly explains, “[i]f PJM 
 
90 September 29 Order, 196 FERC ¶ 61,245 at P 205. 
91 Proposed Tariff, Attachment DD, section 18.8(b)(i)(A).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 30 
 
identifies material changes that would affect the RBP Credit Rate, PJM will reassess the 
RBP Credit Rate.”92  To the extent PJM identifies the need for any changes, the proposed 
Tariff revisions require PJM to “present any recommendations to stakeholders through the 
Members Committee.”93   
PJM is proposing to conduct this review once all committed RBP Resources reach 
commercial operation,94 which will be a point in time in which there will be certainty as to 
the entire set of RBP Resources as well as afford PJM and Market Participants a few 
Delivery Years’ worth of experience under the proposed RBP Credit Rate before 
evaluating whether it needs to be revised.  PJM would conduct such review no later than 
the 2035/2036 Delivery Year, given that all RBP Resources should achieve commercial 
operation by June 1, 2032, or face RBP Shortfall Charges and RBP commitments will be 
rescinded for RBP Resources that fail to achieve commercial operation within three 
Delivery Years of the first Delivery Year for which the RBP Resource is committed.   
5. 
PJM is clarifying that Credit Requirements for RBP Charges shall 
not be included in existing PJM credit tools. 
The proposed LSE credit requirement should require the provision of adequate 
credit to mitigate the risk of paying for the RBP commitments over their term.  To be clear, 
the LSE credit requirement is designed to cover both parts of the forward payment 
obligation due to a committed RBP Resource—the RBP Charges (i.e., the contract for 
differences) and the Locational Reliability Charges (i.e., RPM capacity payments).95  
 
92 Kelly Aff. ¶ 62. 
93 Proposed Tariff, Attachment DD, section 18.8(b)(i)(A). 
94 To the extent any RBP commitment is rescinded pursuant to Tariff, Attachment DD, section 18.6(e), PJM 
would ignore such RBP Resource in determining when to commence the review.  
95 See Kelly Aff. ¶ 59.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 31 
 
Therefore, to avoid double counting the RPM capacity payment obligation, PJM is 
proposing revisions to Tariff, Attachment DD, section 18.8 to remove language that could 
allow PJM to consider RBP Charges and RPM capacity payments owed such RBP 
Resource through its other credit tools in Tariff, Attachment Q, including the Peak Market 
Activity.  In fact, PJM is proposing revisions to make explicit that such payment 
obligations “shall not be included in Peak Market Activity” and is deleting the language 
that “[n]othing in this Tariff, Attachment DD, section 18.8 supersedes the provisions of 
Tariff, Attachment Q.”96  These revisions resolve in the negative any doubt as to whether 
PJM’s proposed RBP credit requirement is duplicative of any existing PJM credit rule. 
C. 
Treatment of RBP Commitment in Event of Transmission Owner Exit 
During Term of the Commitment (Proposed Tariff, Attachment DD, 
Section 18.7) 
The September 29 Order states that “the proposed Transmission Owner exit 
provisions [from PJM’s July 31 Filing] may be inconsistent with the cost causation 
principle because they do not assign costs to the entities that cause the costs and benefit 
from the capacity procurement under the RBP, i.e. LSEs.”97  In response, PJM is proposing 
to modify Tariff, Attachment DD, section 18.7 to put LSEs on notice that, in the event of a 
withdrawal from PJM, LSEs will continue to be responsible for any remaining RBP 
Charges that are allocated to them during the term of the RBP commitment.  To be clear, 
this provision is designed to address the limited scenario where an LSE assigned 
responsibility for RBP Charges is electrically separated from PJM as a result of another 
entity that physically withdraws from PJM.  It does not apply to scenarios where a Large 
 
96 Tariff, Attachment DD, section 18.8. 
97 September 29 Order, 196 FERC ¶ 61,245 at P 179.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 32 
 
Load may switch LSEs during the term of the RBP commitment as those changes would 
ordinarily be reflected in the Daily Unforced Capacity Obligation or Reliability Backstop 
Obligation that is used to charge for the RBP obligations. 
Specifically, PJM proposes to modify the exit provision in proposed Tariff, 
Attachment DD, section 18.7 as follows:  
In the event a Load Serving Entity that is allocated RBP Charges 
withdraws from PJM (whether or not caused by the physical 
withdrawal of another entity from the PJM Region), such Load 
Serving Entity shall be responsible for the remainder of the RBP 
Charges allocated to it, subject to a rate filing with the Federal 
Energy Regulatory Commission that details the specific terms and 
amounts owed. Nothing in this provision shall limit such Load 
Serving Entity’s ability to seek redress from another entity to the 
extent the Load Serving Entity’s withdrawal is caused by that other 
entity’s physical withdrawal from the PJM Region. 
To date, no LSEs have indicated an intention to withdraw from PJM.  Nevertheless, the 
proposed Tariff provision is needed to: (1) put LSEs on notice of how RBP commitments 
will be honored; (2) recognize that a primary incentive for developers to participate in the 
RBP is the cost certainty afforded by a 15-year commitment; (3) aid in the financing of 
RBP Resources that can be developed and placed in service quickly; and (4) protect 
remaining customers in PJM from stranded costs arising from RBP Charges.  As proposed, 
the Tariff language may be divided into the following three distinct subparts, which PJM 
will address, in turn, below:  
1) broad notice to LSEs of their responsibility for allocated RBP Charges in 
the event of withdrawal;  
2) recognition that, in the event of withdrawal, details about specific terms and 
amounts owed will be subject to subsequent filings with the Commission; 
and  
3) express preservation of an LSE’s ability to seek redress under certain 
circumstances.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 33 
 
1. 
LSEs are on notice that, in the event of withdrawal, LSEs will 
continue to be responsible for RBP Charges allocated to them.   
The September 29 Order suggests that “a just and reasonable approach could 
require LSEs in an exiting Transmission Owner’s zone to pay RBP exit fees commensurate 
with their cost allocation under the RBP, to prevent cost shifts to other LSEs in the PJM 
Region.”98  Accordingly, PJM proposes to require that LSEs, rather than exiting 
Transmission Owners, cover costs commensurate with the RBP Charges allocated to them.  
The modified Tariff language follows the guidance provided in the September 29 Order 
and finds support in Commission precedent, and is therefore just and reasonable. 
First, the September 29 Order suggests that a more legally durable approach to 
guarding against stranded RBP costs in the event of a withdrawal from PJM would be to 
require RBP Charges to follow an exiting LSE, rather than the exiting Transmission Owner.  
As the Commission observed in the September 29 Order, in Duquesne, the LSE 
“understood that PJM was procuring capacity on its behalf,” and “PJM’s obligation to pay 
generators is fixed at the time of the auction.”99  It follows that, in Duquesne, LSEs located 
in an exiting Transmission Owner’s zone continued to be obligated to pay for capacity 
procured through the RPM.100   
According to the September 29 Order, RBP Charges are analogous to the cost of 
capacity procured through the RPM in Duquesne, because:  
Under its RBP proposal, PJM similarly proposes to procure capacity 
through the RBP on behalf of LSEs, establish obligations to pay 
RBP Resources at the time of the procurement, and later allocate 
 
98 September 29 Order, 196 FERC ¶ 61,245 at P 181. 
99 September 29 Order, 196 FERC ¶ 61,245 at P 178 (quoting Duquesne Light Co., 122 FERC ¶ 61,039, at P 
89 (2008)). 
100 September 29 Order, 196 FERC ¶ 61,245 at P 178.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 34 
 
those costs to LSEs.  PJM fails to explain why Transmission 
Owners—who are not the buyers for which PJM procures capacity 
under the RBP—should be responsible for RBP Charges.101  
Because LSEs, not exiting Transmission Owners, are the buyers for which PJM procures 
capacity under the RBP, LSEs are the beneficiaries of the RBP Resources procured by PJM.  
Thus, as the September 29 Order suggests, even where an exiting Transmission Owner 
ultimately causes an LSE to withdraw involuntarily from PJM, LSEs nevertheless remain 
the underlying cause for the RBP Resources and associated RBP Charges established at the 
time of procurement.  Thus, as the Commission suggests, it is reasonable to continue 
requiring LSEs to cover RBP Charges allocated to them, even after they have withdrawn 
from PJM.  Thus, PJM is revising its proposed Tariff, Attachment DD, section 18.7 to 
require that LSEs, rather than exiting Transmission Owners, continue to cover the costs of 
RBP Charges allocated to them.   
Second, PJM’s proposed Tariff language is drafted broadly to put exiting LSEs on 
notice of ongoing cost responsibility for RBP Charges allocated to them, without regard to 
whether those LSEs have exited PJM involuntarily based on their location in an exiting 
Transmission Owner’s zone.  In PJM, an LSE is defined by its role as an entity serving 
end-use customers within the PJM Region with the authority or obligation to sell electric 
energy to such end-users.102  LSEs without physical assets would generally withdraw from 
PJM when the end-users they serve are located in an exiting Transmission Owner’s zone.  
Thus, the September 29 Order suggests that a just and reasonable approach could require 
 
101 September 29 Order, 196 FERC ¶ 61,245 at P 178. 
102 RAA, Article 1, Definitions; Tariff, Part 1, Definitions – L-M-N.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 35 
 
“LSEs in an exiting Transmission Owner’s zone” to continue paying RBP Charges 
allocated to them.103   
PJM’s proposed Tariff provision recognizes that, in light of the numerous different 
configurations found in PJM, it is possible that LSEs may withdraw from PJM for reasons 
other than a Transmission Owner’s physical withdrawal from the PJM Region.  Thus, 
PJM’s proposed Tariff provision puts LSEs on notice that they will be responsible for the 
remainder of RBP Charges allocated to them whether or not their exit was caused by the 
physical withdrawal of another entity from the PJM Region.  Likewise, the revised Tariff 
provision puts LSEs on notice that their ongoing cost responsibility for RBP Charges will 
continue to follow them even if an LSE’s withdrawal is the result of the physical 
withdrawal of entities other than an exiting Transmission Owner.  Thus, the proposed Tariff 
provision is drafted broadly to provide assurances against stranded RBP Charges and cost 
shifts. 
2. 
The modified proposal expressly recognizes that the specific terms 
and amounts owed in RBP Charges are subject to future filings with 
the Commission.   
In response to PJM’s July 31 Filing, a number of protestors raised concerns that 
PJM’s previously proposed exit provisions were unnecessarily constraining.  The 
Commission, “disagree[d] with protesters that establishing exit provisions in the Tariff 
would unnecessarily constrain the parties involved in effectuating a Transmission Owner’s 
withdrawal from PJM.  As PJM states, the cost obligations will be ‘appropriately decided 
at the time of Transmission Owner’s exit and subject to Commission approval.’”104  As the 
 
103 September 29 Order, 196 FERC ¶ 61,245 at PP 181-82. 
104 September 29 Order, 196 FERC ¶ 61,245 at P 180 (quoting PJM RBP Answer at 98).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 36 
 
Commission has previously recognized, “there are a number of steps involved in 
proceeding with an orderly withdrawal from [a Regional Transmission Organization 
(“RTO”)]” through “an orderly, phased-in sequence.”105 
PJM is proposing to modify its Tariff provision to expressly state that RBP Charges 
associated with a withdrawing LSE will be “subject to a rate filing with the Federal Energy 
Regulatory Commission that details the specific terms and amounts owed.”106  The 
modified proposal clarifies an important point and adheres to the September 29 Order and 
Commission precedent and is therefore just and reasonable. 
First, like other exit provisions that the Commission has previously found to be just 
and reasonable, PJM’s proposal does not establish specific cost obligations arising from 
specific circumstances surrounding a particular LSE’s withdrawal or prejudge any potential 
settlement agreements pertaining to cost responsibility.107  Under the proposed Tariff 
language, LSEs will only be responsible for the remainder of RBP Charges allocated to it.  
Depending on the specific circumstance of an LSE’s withdrawal, RBP Obligation MW and 
associated RBP Charges may be subsequently allocated to other LSEs that have not 
withdrawn from the PJM Region, in accordance with Tariff, Attachment DD, section 
18.3(b).     
Second, in accordance with the September 29 Order, PJM is proposing a Tariff 
provision that “still leave[s] flexibility for LSEs”108 that have been allocated responsibility 
 
105 Duke Energy Ohio, Inc., 133 FERC ¶ 61,058, at P 133 (2010) (quoting Am. Transmission Sys., Inc. v. 
PJM Interconnection, L.L.C., 129 FERC ¶ 61,249, at P 29 (2009)). 
106 Proposed Tariff, Attachment DD, section 18.7. 
107 See, e.g., Midwest Indep. Transmission Sys. Operator, Inc., 133 FERC ¶ 61,221, at P 471 (2010), order 
on reh’g, 137 FERC ¶ 61,074 (2011). 
108 September 29 Order, 196 FERC ¶ 61,245 at P 181.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 37 
 
for RBP Charges.  PJM agrees with the Commission that LSEs withdrawing from PJM 
should retain the flexibility to enter into appropriate business arrangements to cover its 
allocated RBP Charges.  As the September 29 Order suggests, exiting LSEs may still have 
the flexibility “to enter into agreements with RBP Resources (which they may need to serve 
their load) or pay to pseudo-tie RBP Resources located within the exiting Transmission 
Owner’s zone back into PJM.”109   
3. 
The modified proposal expressly preserves an LSE’s ability to seek 
redress under certain circumstances.   
While the modified proposal requires exiting LSEs—rather than exiting 
Transmission Owners—to continue covering their allocated RBP Charges, PJM 
nevertheless recognizes that LSEs retain the flexibility to seek redress when another 
entity’s physical withdrawal from the PJM Region, such as a Transmission Owner’s, causes 
an LSE to also be withdrawn from PJM.  Therefore, PJM’s modified Tariff provision 
expressly states that “[n]othing in this provision shall limit such Load Serving Entity’s 
ability to seek redress from another entity to the extent the Load Serving Entity’s 
withdrawal is caused by that other entity’s physical withdrawal from the PJM Region.”110  
The proposed language is just and reasonable and supported by Commission precedent.    
First, as noted above, the proposed exit provision is drafted broadly to include, but 
not be limited to, instances where a Transmission Owner’s physical withdrawal from the 
PJM Region causes LSEs to involuntarily withdraw from PJM.  The Commission has 
expressly recognized that LSEs “may be required to associate with the same RTO as the 
 
109 September 29 Order, 196 FERC ¶ 61,245 at P 181. 
110 Proposed Tariff, Attachment DD, section 18.7.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 38 
 
transmission owner” and thus could require the “involuntary withdrawal by other LSEs in 
the [withdrawing transmission owner’s] zone.”111   
When Transmission Owners have exited an RTO/Independent System Operator 
(“ISO”), LSEs that must involuntarily withdraw in order to associate with the same 
RTO/ISO as the exiting Transmission Owners have invariably challenged costs associated 
with the Transmission Owners’ withdrawal from the RTO/ISO.112  The Commission has 
previously found an exiting transmission owner’s proposal to recover costs from its 
customers to be unjust and unreasonable where the transmission owner has “not 
sufficiently shown that wholesale transmission customers would realize net benefits from 
the RTO realignment.”113  The proposed Tariff provision recognizes that LSEs retain the 
right to file for cost recovery or intervene, challenge, and protest cost assignments 
following their involuntary withdrawal, including, but not limited to, by challenging the 
subsequent rate filings before the Commission.   
Second, the proposed Tariff provision recognizes that the Commission has 
previously upheld Tariff provisions that shift cost responsibility from transmission 
customers to their exiting transmission owners.  In FirstEnergy Service Co. v. Midwest 
Independent Transmission System Operator, Inc., for example, the Commission upheld 
Schedule 39 of the Midwest Independent Transmission System Operator, Inc. (“MISO”) 
Tariff, which held Transmission Owners exiting from MISO responsible for the costs of 
 
111 Duquesne Light Co., 122 FERC ¶ 61,039 at P 130. 
112 See, e.g., PJM Interconnection, L.L.C., 151 FERC ¶ 61,029 (2015) (approving settlement between exiting 
transmission owner and wholesale transmission customers excluding 100% of certain exit and integration 
costs following Commission’s denial, without prejudice, of transmission owner’s request to recover such 
costs). 
113 PJM Interconnection, L.L.C., 144 FERC ¶ 61,217, at P 22 (2013).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 39 
 
Multi-Value Project Charges, even though such charges are typically borne transmission 
customers.  Therein, the Commission “disagree[d] with parties’ assertions that Schedule 39 
improperly shifts responsibility from the transmission customers to the Withdrawing 
Transmission Owner.”114  As the Commission explained: 
The transmission owner, not its transmission customers, makes the 
decision to withdraw from MISO and, therefore, Attachment FF [of 
the MISO Tariff] neither contemplates nor prescribes any financial 
obligations for transmission customers in the Withdrawing 
Transmission Owner’s zone.  Moreover, we disagree that MVP 
charges cannot be part of a transmission owner’s exit fee obligation 
because, prior to a transmission owner’s withdrawal, MVP charges 
are assessed to transmission customers.  Attachment FF states . . . 
that transmission owners, upon withdrawal, become responsible 
for costs contemplated in Attachment FF.115 
Subsequently, the Commission expressly distinguished FirstEnergy from Duquesne, 
reasoning:   
Although the Commission agreed that the allocation and usage-
based rate design of MISO’s MVPs are similar to the allocation and 
usage-based rate design of PJM’s 500 kV facilities at issue in 
Duquesne, which the Commission rejected as part of a PJM exit 
fee, the Commission found that MISO’s Tariff language is different 
than PJM’s.  The Commission stated that Section III.A.2.j of 
Attachment FF of MISO’s Tariff explicitly obligates transmission 
owners withdrawing from MISO to pay costs incurred under 
Attachment FF, including MVP costs, whereas, in Duquesne, the 
Commission found that Schedule 12 of the PJM tariff lacked any 
language to obligate transmission owners that withdraw from PJM 
to continue to pay for transmission facility additions rated 500 kV 
and above.  Because Attachment FF specified that transmission 
owners withdrawing from MISO are obligated to honor financial 
obligations associated with transmission facility additions incurred 
 
114 FirstEnergy Serv. Co. v. Midwest Indep. Transmission Sys. Operator, Inc., 138 FERC ¶ 61,140, at P 65 
(2012), order on initial decision & reh’g, 153 FERC ¶ 61,101 (2015). 
115 FirstEnergy, 138 FERC ¶ 61,140 at P 65.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 40 
 
under Attachment FF prior to withdrawal, the Commission found 
that the Duquesne precedent was distinguishable.116 
While PJM’s revised Tariff provision recognizes that a more legally durable solution 
follows Commission precedent in Duquesne, PJM nevertheless proposes that its Tariff 
expressly reserves the right of an LSE to seek redress from other entities whose decision 
to withdraw from PJM results in the withdrawal of the LSE.        
In recognition of the fact that, depending on the specific circumstances of the 
withdrawal, LSEs may argue that costs typically borne by LSEs should become the 
responsibility of the entity that initiated the physical withdrawal from the PJM Region, 
PJM is proposing revised Tariff language that expressly contemplates that LSEs may seek 
redress from the other such entity whose physical withdrawal from the PJM Region caused 
the LSEs’ withdrawal from PJM.  While the provision is drafted broadly, PJM contemplates 
that the forms of redress that an LSE may seek may include recouperation of costs resulting 
directly from a Transmission Owner’s business decision to exit PJM.   
III. 
PROPOSED ADDITIONAL UPDATES TO THE ACCEPTED RBP RULES 
Beyond the proposed updates discussed above, PJM proposes additional limited 
amendments to the Tariff that serves to further refine, clarify, and/or update the set of RBP 
rules as detailed below.   
A. 
PJM Proposes to Amend the Opt-Out for LSEs that Are Not Regulated by 
States. 
In the July 31 Filing, PJM proposed a limited RBP opt-out applicable to certain 
Electric Distributors whose zone/area rates are not subject to state regulation.  The purpose 
of that provision was to address a narrow regulatory circumstance facing certain 
 
116 FirstEnergy, 153 FERC ¶ 61,101 at P 142.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 41 
 
cooperative and municipal utility systems whose rates are not regulated by a state authority.  
However, in the September 29 Order, the Commission found that the proposed opt-out for 
qualifying cooperatives and municipal utilities may be unjust, unreasonable, and unduly 
discriminatory because those entities may serve Large Loads that are similarly situated to 
Large Loads served by other LSEs that would remain responsible for RBP Charges.117   
To address this concern, PJM proposes to revise Tariff, Attachment DD, section 
18.1(d) to eliminate the provision that permits an Electric Distributor that is not regulated 
by a RERRA to specify a quantity of load that will be opted out of the Initial RBP Target.  
As revised, the RBP framework will no longer provide an opt-out based on the regulatory 
status of an Electric Distributor’s zone/area. 
This revision ensures that responsibility for RBP Charges is applied on a 
comparable basis across all LSEs that serve Large Loads.  Accordingly, LSEs serving 
Large Loads will remain responsible for RBP Charges regardless of whether the relevant 
Electric Distributor’s zone/area is regulated by a state.  By removing the previously 
proposed opt-out, the potential for disparate treatment among similarly situated Large 
Loads is eliminated and directly addresses the concern identified by the Commission in the 
September 29 Order. 
B. 
PJM Proposes Updates to Modify the Opt-Out for a Peak Shaving 
Adjustment Program to Align with the RBP Offset. 
While PJM is maintaining the remaining opt-out for Electric Distributors that 
address resource adequacy needs through Peak Shaving Adjustment programs established 
pursuant to state law, PJM proposes a targeted modification to better align that opt-out with 
 
117 September 29 Order, 196 FERC ¶ 61,245 at P 152.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 42 
 
the requirements applicable to Qualifying RBP Offset UCAP MW.  Specifically, PJM 
proposes to require that any MW quantity used to reduce the Initial RBP Target through 
the Peak Shaving Adjustment opt-out be committed to participate in the applicable Peak 
Shaving Adjustment program for a minimum term of five years.118  This requirement is 
consistent with the existing requirement that Qualifying RBP Offset UCAP MW be 
supported by a signed bilateral contract with a minimum term of five years in order to offset 
the Initial RBP Target.119 
This proposed revision recognizes that Peak Shaving Adjustment MW and 
Qualifying RBP Offset UCAP MW serve a similar function within the RBP framework. In 
each case, the MW quantity is used to reduce the Initial RBP Target and, therefore, reduce 
the quantity of Capacity Resources that otherwise would be procured through the RBP 
construct. Although Peak Shaving Adjustment MW reflects a demand-side reduction rather 
than the addition of a supply-side resource with an accredited UCAP value, both 
mechanisms reduce the amount of incremental capacity procurement that would otherwise 
be necessary to address Large Load growth. 
Because both mechanisms produce a comparable effect on the Initial RBP Target, 
they should be subject to comparable durability requirements. The proposed five-year 
minimum participation requirement helps ensure that Peak Shaving Adjustment MW used 
to reduce the Initial RBP Target represents a meaningful and sustained contribution to 
resource adequacy rather than a temporary or transitory reduction in load. Absent such a 
requirement, load could reduce the Initial RBP Target based on short-term participation in 
 
118 See proposed Tariff, Attachment DD, section 18.1(d). 
119 See Tariff, Attachment DD, section 18.2(c)(i).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 43 
 
a Peak Shaving Adjustment program without providing a commensurate long-term 
contribution to meeting the resource adequacy needs that gave rise to the RBP 
procurement. 
Accordingly, the proposed five-year minimum term promotes consistency across 
the RBP framework by treating demand-side and supply-side offset mechanisms in a 
comparable manner.  At the same time, the requirement remains sufficiently flexible to 
accommodate commercially reasonable arrangements while ensuring that any MW used to 
reduce the Initial RBP Target reflects a sustained commitment that supports resource 
adequacy objectives. 
C. 
PJM Proposes to Update the Rules Related to the Cure Period for Any 
Identified Deficiencies Associated with an RBP Sell Offer. 
Under the RBP rules accepted by the Commission in the September 29 Order, each 
RBP Sell Offer must include the information and evidence necessary to demonstrate that 
the proposed project qualifies as an RBP Resource.  Specifically, an RBP Sell Offer must 
be accompanied by the applicable documentation and support required for the relevant 
resource type under Tariff, Attachment DD, section 18.5(f)(i).  Upon receipt of an RBP 
Sell Offer, PJM reviews the submission on a pass/fail basis to determine whether the offer 
includes the required information and supporting evidence.  If PJM identifies missing 
documentation or other deficiencies, PJM will notify the RBP Seller and provide an 
opportunity to cure the identified deficiencies before the offer is rejected.120  In the event 
PJM identifies missing documentation or other evidence in an RBP Sell Offer, an RBP 
 
120 Tariff, Attachment DD, section 18.5(f)(i).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 44 
 
Seller has five calendar days, or until the close of the RBP offer submission window, 
whichever occurs first, to cure any deficiencies identified by PJM.121 
Upon further review, PJM has determined that this provision may not provide all 
RBP Sellers a meaningful and consistent opportunity to cure deficiencies.  In particular, 
should a significant number of RBP Sell Offers be submitted towards the end of the RBP 
offer submission window, PJM may not be able to complete its review of every offer and 
issue any necessary deficiency notices prior to the expiration of the submission window.  
As a result, the amount of time available to cure a deficiency could vary based solely on 
the timing of PJM’s review rather than the nature of the deficiency or the merits of the 
underlying project. 
To address this concern, PJM proposes a narrow modification to the cure process.  
Under the proposed revision, an RBP Seller will have five calendar days from receipt of a 
deficiency notice to cure any deficiencies identified by PJM, even if the cure period extends 
beyond the close of the RBP offer submission window.  This change does not alter the 
substantive requirements applicable to RBP Sell Offers, nor does it modify PJM’s 
evaluation criteria.  Rather, it allows all RBP Sellers to receive the same cure opportunity 
once PJM has identified a deficiency.  In addition, this revision enhances the fairness and 
administrability of the RBP qualification process by ensuring that an RBP Seller is not 
denied a cure opportunity solely because PJM’s review occurs near the end of the 
submission window.  The proposed revision also improves the likelihood that potentially 
 
121 Tariff, Attachment DD, section 18.5(f)(i).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 45 
 
qualifying RBP Resources will be evaluated on their merits rather than excluded due to 
timing constraints associated with the review process. 
Importantly, PJM does not expect this change to encourage late submissions.  RBP 
Sell Offers will continue to be reviewed on a rolling basis throughout the submission 
window, and PJM anticipates that sellers submitting offers earlier in the process may have 
greater opportunities to respond to informal requests for clarification or supplemental 
information before PJM issues a formal deficiency notice.  By contrast, sellers submitting 
offers closer to the close of the submission window may have fewer opportunities for 
informal engagement prior to the commencement of the formal cure process.  Accordingly, 
RBP Sellers will continue to have a strong incentive to submit complete RBP Sell Offers 
as early as practicable during the submission window. 
To effectuate this update, PJM proposes to modify Tariff, Attachment DD, 
section 18.5(f)(i), as shown in blackline below: 
RBP Sell Offers that do not include the following information shall 
not proceed to selection assessment, provided, however, that the 
Office of the Interconnection shall provide the RBP Seller the 
opportunity to cure any identified deficiencies within five (5) 
calendar days of being notified by PJM. Notwithstanding, such 
opportunity to cure shall not extend past the close of the bid 
submission window of the Reliability Backstop Procurement. 
D. 
PJM Proposes Clarifications Related to Qualifying RBP Offset UCAP 
MW. 
In the July 31 Filing, PJM explained that it is just and reasonable to reduce the 
Initial RBP Target to reflect qualifying new capacity procured outside of the RBP construct 
(“Qualifying RBP Offset UCAP MW”).  Qualifying RBP Offset UCAP MW recognizes 
bilateral arrangements that help address the resource adequacy need associated with Large 
Load growth while furthering PJM’s preference for encouraging voluntary procurement of

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 46 
 
new capacity through bilateral contracting rather than through mandatory RBP 
procurement.  As the Commission previously accepted, the universe of resources eligible 
to qualify as Qualifying RBP Offset UCAP MW includes new generation, Energy Storage 
Resources, Planned Demand Resources, and Planned DER Capacity Aggregation 
Resources.122 
It remains just and reasonable to permit Electric Distributors to report Qualifying 
RBP Offset UCAP MW for purposes of decrementing the Initial RBP Target.  Through 
this filing, PJM clarifies that any such resource must be physically located within the PJM 
Region.123  Additionally, given that the RBP is now anticipated to commence on March 1, 
2027, PJM is clarifying that capacity that may be committed in the Third Incremental 
Auction associated with the 2027/2028 Delivery Year will remain eligible as Qualifying 
RBP Offset UCAP MW (as well as to maintain eligibility as an RBP Resource).124  This is 
appropriate given that the deadline to submit the binding notice of intent to offer into the 
Third Incremental Auction associated with the 2027/2028 Delivery Year will be before an 
order on this filing is expected.125  This will avoid a scenario where a Planned Generation 
Capacity Resource may not be offered into the 2027/2028 Third Incremental Auction to 
preserve eligibility to be either offered as an RBP Resource or used as a Qualifying RBP 
Offset UCAP MW. 
 
122 Tariff, Attachment DD, section 18.2(b). 
123 Proposed Tariff, Attachment DD, section 18.2(a). 
124 Proposed Tariff, Attachment DD, section 18.2(a); proposed Tariff, Attachment DD, section 18.5(a)(ii); 
proposed Tariff, Part 1, Definitions – O-P-Q, Qualifying RBP Offset UCAP MW. 
125 Specifically, the current deadline for the notice of intent to offer into the Third Incremental Auction for 
the 20287/2028 Delivery Year is November 26, 2026.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 47 
 
In addition, PJM is updating the language in Tariff, Attachment DD, section 18.2(e) 
to conform with the revised approach of requiring Electric Distributors to report the MW 
quantity of Large Load.  Specifically, PJM proposes to amend this section to state that the 
total quantity of Qualifying RBP Offset UCAP MW that can be used to decrement the 
Initial RBP Target “will be capped by the aggregate MW quantity of Large Load reported 
by each Electric Distributor, as reported in accordance with Tariff, Attachment DD, section 
18.3(a)(2), and the total MW quantity that is subject to the RBP opt-out, as requested in 
accordance with Tariff, Attachment DD, section 18.1(d), for the relevant zone/area.”126  
Consistent with this clarification, PJM is also specifying that the Qualifying RBP Offset 
UCAP MW must be the subject of a bilateral agreement with a Large Load and up to the 
capacity obligation of such Large Load.127  This way, the Qualifying RBP Offset UCAP 
MW will not be higher than the quantity of Large Load that the RBP is designed to procure 
for the 2028/2029 Delivery Year. 
Further, PJM is clarifying through this filing that Planned Demand Resource or 
Planned DER Capacity Aggregation Resource used as Qualifying RBP Offset UCAP MW 
must satisfy certain eligibility requirements that also apply to those resource types when 
qualifying as RBP Resources.  Specifically, such resources must “[n]ot be reliant on or 
composed of registered location(s) that previously supported a Demand Resource that 
provided capacity in the 2026/2027 Delivery Year unless such location represents an 
incremental increase in capacity resulting from an investment in new generation or new 
 
126 Proposed Tariff, Attachment DD, section 18.2(e). 
127 Proposed Tariff, Attachment DD, section 18.2(c).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 48 
 
storage resources at that location.”128  In addition, such resources must be supported by a 
signed commitment between the Curtailment Service Provider or DER Aggregator 
identifying the end-use customers that will support such commitment in an amount equal 
to the MW quantity relied upon as the offset.129 
These requirements provide reasonable assurances that Planned Demand Resources 
and Planned DER Capacity Aggregation Resources used to reduce the Initial RBP Target 
represent genuinely incremental capacity additions rather than the repackaging of existing 
demand-side capability that has already contributed to PJM’s resource adequacy 
requirements.  Because the purpose of the Qualifying RBP Offset UCAP MW mechanism 
is to recognize new capacity that mitigates the reliability needs otherwise addressed 
through the RBP construct, it is appropriate to require evidence demonstrating that the 
specific end-use customer locations represent new capability and is directly associated with 
the new loads responsible for the incremental resource adequacy need.  At the same time, 
these requirements do not need to be so restrictive that any previously registered end-use 
location prior to the 2026/2027 Delivery Year would be foreclosed from being eligible to 
be registered in support of a Demand Resource that is either offered as an RBP Resource 
or reported as Qualifying RBP Offset UCAP MW.  Such locations are not currently 
supporting Capacity Resources, and therefore any capacity capability they can provide 
should be deemed new capacity on the system. 
PJM also proposes to clarify that Planned Demand Resources and Planned DER 
Capacity Aggregation Resources used as Qualifying RBP Offset UCAP MW must identify 
 
128 See proposed Tariff, Attachment DD, section 18.5(c)(i). 
129 Tariff, Attachment DD, section 18.2(c)(iii).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 49 
 
the specific locations that will support the offset.  This requirement is necessary to verify 
that the claimed MW quantity is associated with identifiable new load and represents 
incremental capacity that did not previously contribute to PJM's resource adequacy needs.  
The Commission expressly recognized concerns that Demand Resources and DER 
Aggregation Resources may face challenges in identifying customer locations sufficiently 
far in advance in the context of qualifying as an RBP Resource, but nonetheless found it 
reasonable to require identification of the specific locations supporting such resources.130  
Requiring location-specific information in the offset context is likewise appropriate and is 
consistent with the comparable identification requirements applicable to generation 
resources proposed as Qualifying RBP Offset UCAP MW.131 
At the same time, while Planned Demand Resources and Planned DER Capacity 
Aggregation Resources used as Qualifying RBP Offset UCAP MW must satisfy the 
eligibility requirements necessary to demonstrate that the resources are new, incremental, 
and directly tied to the underlying Large Load, PJM does not require those resources to 
provide all of the documentation necessary to qualify as an RBP Resource.  Specifically, 
the submission of the specific end-use customer contracts that would otherwise be required 
for participation as an RBP Resource would not be required.  This tailored approach 
appropriately balances the need to ensure that offset MW represent genuine new capacity 
against the recognition that Qualifying RBP Offset UCAP MW are not themselves seeking 
RBP commitments or compensation.  As a result, the proposal provides sufficient 
 
130 September 29 Order, 196 FERC ¶ 61,245 at P 50.  
131 Tariff, Attachment DD, section 18.2(c).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 50 
 
assurance that any MW used to reduce the Final RBP Target reflects real and incremental 
capacity additions while avoiding unnecessarily burdensome qualification requirements. 
Finally, PJM is proposing to correct a typographical error in proposed Tariff, 
Attachment DD, section 18.5(d).  Specifically, the Tariff provision states: 
To qualify as a DER Capacity Aggregation Resource that supplies 
RBP UCAP MW eligible to be offered into the Reliability Backstop 
Procurement, a Planned DER Capacity Aggregation Resource must 
meet 
the 
requirements 
of 
Tariff, 
Attachment 
DD, 
sections 18.5(b) . . . .132 
Section 18.5(b) establishes the requirements applicable to “Generation or Energy 
Storage Resources as an RBP Resources” and was not intended to apply to DER Capacity 
Aggregation Resources.  Rather, PJM intended to reference section 18.5(a), which sets 
forth the general eligibility requirements applicable to all resources supporting RBP UCAP 
MW and is titled “RBP Seller Eligibility to Participate and General Requirements for 
Resources Supporting RBP UCAP MW.”  Accordingly, this filing corrects Tariff, 
Attachment DD, section 18.5(d) by replacing the reference to “section 18.5(b)” with 
“section 18.5(a).”133 
E. 
PJM Proposes to Update Site Control Requirements. 
In the July 31 Filing, PJM proposed an RBP gating criteria designed to limit 
participation to resources with a high likelihood of achieving commercial operation to deter 
speculative offers.  As relevant here, generation and storage resources seeking to 
participate in the RBP must demonstrate, among other things, evidence of 100% Site 
Control “for a term of at least three years from the date of submission of the 
 
132 Tariff, Attachment DD, section 18.5(d). 
133 Proposed Tariff, Attachment DD, section 18.5(d).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 51 
 
Application.”134  In Docket No. ER26-3380-000, PJM responded to comments submitted 
by CPV Power Holdings, LP (“CPV”) and acknowledged certain concerns regarding the 
proposed Site Control requirements.135  In the September 29 Order, the Commission 
recognized “PJM’s openness to adopt CPV’s suggested redlines to proposed Tariff, 
Attachment DD, section 18.5(f)(i)(2)” and stated that PJM could incorporate revisions to 
that provision through this filing.136 
In particular, PJM recognizes that the reference to “Application” in Tariff, 
Attachment DD, section 18.5(f)(i)(2) may create ambiguity in the context of the RBP.  That 
is, the term “Application” is generally associated with the submission of a project into 
PJM’s interconnection queue and does not clearly identify the relevant point in time for 
purposes of the RBP Site Control requirement.  Accordingly, PJM proposes to clarify that 
the three-year Site Control requirement is measured from the date of submission of the 
RBP Sell Offer. 
PJM also proposes to revise the Site Control requirement to avoid imposing 
duplicative obligations on projects that are already being studied, or have already 
completed the relevant studies, as part of PJM’s interconnection process.  Such projects 
are already required to satisfy the applicable Site Control requirements as a condition of 
progressing through the interconnection queue.  Requiring those projects to separately 
demonstrate an additional three-year minimum term of Site Control for RBP participation 
 
134 Tariff, Attachment DD, section 18.5(f)(i)(2). 
135 See PJM RBP Answer at 10, 44-46; PJM Interconnection, L.L.C., Motion to Intervene and Comments of 
CPV Power Holdings, LP, Docket No. ER26-3380-000, at 4-5 (Aug. 21, 2026).  
136 September 29 Order, 196 FERC ¶ 61,245 at P 78.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 52 
 
could unnecessarily exclude otherwise viable resources that have a high likelihood of 
reaching commercial operation. 
Therefore, PJM proposes to revise Tariff, Attachment DD, section 18.5(f)(i)(2) so 
that only projects that are not currently undergoing, and have not previously completed, an 
interconnection study in PJM’s interconnection process must provide evidence of 100% 
Site Control, consistent with the requirements set forth in Tariff, Part VIII, Subpart A, 
section 402, for a term of at least three years from the submission of the RBP Sell Offer.  
For the same reason, only those projects would be required to provide an officer 
certification demonstrating compliance with the applicable Site Control requirements.  
Based on the foregoing, PJM proposes to amend Tariff, Attachment DD, 
section 18.5(f)(i)(2), as shown in blackline below: 
(2) For projects that are not the subject of a completed 
interconnection study or are not currently under study as part of an 
active New Service Request by the Office of the Interconnection, 
Eevidence of 100% Site Control consistent with Tariff, Part VIII, 
Subpart A, section 402 for each of the Generating Facility (including 
the location of the main step-up transformer), the Interconnection 
Facilities, and the Interconnection Switchyard (as defined in the 
PJM Manuals) for a term of at least three years from the date of 
submission of the ApplicationRBP Sell Offer.  
 
In addition,Such projects must also be accompanied by a 
certification, executed by an officer or authorized representative of 
the Generation Project Developer, verifying that the Site Control 
requirements have been met.  Further, at Transmission Provider’s 
request, Generation Project Developer shall provide copies of 
landowner attestations or county recordings.  The Site Control 
requirements include an acreage requirement for the Project, as set 
forth in the PJM Manuals.  
 
Evidence of site control shall be consistent with Tariff, Part VIII, 
Subpart A, section 402;

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 53 
 
F. 
PJM Proposes to Utilize the Most Updated Resource Forecast and 
Resource Mix. 
Given that the September 29 Order suspended the RBP rules for five months to 
become effective February 28, 2027, PJM now anticipates commencing the RBP on 
March 1, 2027.  As part of the September 29 Order, the Commission indicated that “PJM 
should employ the most up-to-date load and resource forecasts to inform the Initial RBP 
Target” when PJM conducts the RBP.137  
Consistent with the Commission’s guidance, PJM proposes to update the Initial 
RBP Target using the most current data available at the time of the RBP.  As initially 
proposed, the Initial RBP Target will continue to be determined as the difference between 
the PJM Region Reliability Requirement for the 2028/2029 Delivery Year and the total 
quantity of Capacity Resources that cleared the 2028/2029 Base Residual Auction.  
However, rather than relying on the forecasts and accreditation values available at the time 
of the July 31 Filing, PJM will utilize the most recent load forecast and capacity 
accreditation information available immediately prior to the commencement of the RBP. 
Specifically, PJM will use the latest PJM Region Reliability Requirement for the 
2028/2029 Delivery Year, which will reflect the latest load forecast for the 2028/2029 
Delivery Year that is scheduled to be finalized and published on or before February 1, 
2027.138  Likewise, PJM will also recalculate the UCAP equivalent of the ICAP quantity 
of Capacity Resources that cleared in the 2028/2029 Base Residual Auction using the 
 
137 September 29 Order, 196 FERC ¶ 61,245 at P 159. 
138 See Tariff, Attachment DD, section 5.10(d).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 54 
 
capacity accreditation factors for the 2028/2029 Delivery Year that are scheduled to be 
finalized in February 2027.   
These updates will produce an Initial RBP Target that reflects the most current load 
and resource assumptions available when the RBP is conducted and, therefore, more 
accurately measures the UCAP MW capacity shortfall for the 2028/2029 Delivery Year 
that the RBP is intended to address.   
Further, as a preventative measure so that a zone/area is not allocated costs beyond 
its respective Large Load demand, PJM is proposing to update the Initial RBP Target to 
equal the lesser of the calculated value of the 2028/2029 Delivery Year shortage and the 
region-wide total of Large Load MW reported to PJM by Electric Distributors.  This 
approach prevents zone/areas from being assessed a greater share of the capacity shortfall 
than its expected Large Load growth.  As PJM’s senior manager of market design, Ms. 
Croop explains, this approach “provides an important safeguard by accounting for the 
possibility that previously reported Large Load agreements may be canceled between the 
collection of data for the 2027 Load Forecast and the establishment of the RBP.”139  In 
other words, capping the Initial RBP Target at the Large Load MW quantity that is reported 
by Electric Distributors will ensure that RBP costs do not exceed the Large Load growth 
reported for the applicable zone/area to align with the principles of cost causation and 
beneficiary pays.140  
 
139 Croop Aff. ¶ 6. 
140 Id.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 55 
 
To effectuate this update, PJM proposes discrete updates to Tariff, Attachment DD, 
section 18.1(a), as shown below: 
The Initial RBP Target shall be a region-wide value equal to the 
lesser of the (1) most up to date UCAP MW quantity that PJM 
cleared short of the PJM Region Reliability Requirement for the 
2028/2029 Delivery Year Base Residual Auction or (2) the UCAP 
equivalent of the aggregate region-wide Large Load MW quantity 
reported by the Electric Distributor in accordance with Tariff, 
Attachment DD, section 18.3A. Specifically, the Initial RBP Target 
shall equal the lesser of ([the latest estimate of the PJM Region 
Reliability Requirement for the 2028/2029 Delivery Year, 
calculated as the RTO Region Peak Load Forecast for the 
2028/2029 Delivery Year from the 2027 Load Forecast times the 
2028/2029 Forecast Pool Requirement from the updated planning 
parameters available at the commencement of the RBP, less the 
sum of all updated Unforced Capacity Obligations of FRR Entities 
in the PJM Region] minus [the UCAP-equivalent of the ICAP 
quantity of Capacity Resources that cleared in the 2028/2029 Base 
Residual Auction using the latest capacity accreditation factors for 
the 2028/2029 Delivery Year available at the commencement of the 
RBP], the aggregate region-wide Large Load MW reported by the 
Electric Distributor in accordance with Tariff, Attachment DD, 
section 18.3A times the most recent 2028/2029 Forecast Pool 
Requirement).  
 
Although PJM considered using the 2029/2030 Delivery Year to establish the 
Initial RBP Target, PJM determined that doing so could drive additional market 
uncertainty.  Utilizing the shortfall from the 2028/2029 Base Residual Auction is consistent 
with the underlying intent of the RBP to address the nearer-term reliability need while 
allowing market fundamentals to address the longer-term resource adequacy.141  Indeed, 
PJM has already initiated its Powering Reliability Through Market Design initiative with 
stakeholders to pursue longer-term market design reforms aimed at improving investment 
and retention signals to support resource adequacy. 
 
141 Croop Aff. ¶ 7.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 56 
 
More fundamentally, the RBP was developed to address the capacity shortfall 
identified for the 2028/2029 Delivery Year.  The RBP’s procurement target, eligibility 
requirements, timelines, and other design elements were all established with that shortfall 
in mind.  If PJM were to instead base the Initial RBP Target on the results of the 2029/2030 
Base Residual Auction, PJM would need to reevaluate and potentially modify numerous 
aspects of the RBP construct to align with a different procurement need many of which 
market participants have already prepared for or made decisions around.  Moreover, 
maintaining the existing design promotes certainty, preserves stakeholder expectations, 
and avoids unnecessary disruption to the market.142  Accordingly, PJM proposes to retain 
the 2028/2029 Delivery Year as the basis for the Initial RBP Target while updating the 
underlying load and resource inputs to reflect the most current information available when 
the RBP is conducted. 
G. 
PJM Proposes to Update Must-Offer and Binding Notice of Intent Rules 
for Committed RBP Resources. 
As PJM originally proposed, and the Commission accepted, a committed RBP 
Resource must offer its available capacity, up to the total quantity of committed RBP 
UCAP MW, into the RPM Auctions as a price taker, i.e., $0/MW-day UCAP, beginning 
with the first RPM Auction following the RBP commitment, for the applicable offered 
Delivery Year in which the term of the committed RBP UCAP MW begins and continuing 
each subsequent Delivery Year through the end of the fixed, 15-year term.143  PJM is not 
proposing any changes to the overall framework of this requirement in this filing.  
 
142 Croop Aff. ¶ 8. 
143 Tariff, Attachment DD, section 18.6(a).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 57 
 
However, given that the RBP is now anticipated to commence on March 1, 2027, with final 
commitments awarded in early May 2027, PJM is updating rules pertaining to when a RBP 
Resource must first be offered into the RPM Auctions and the associated rules pertaining 
to the binding notice of intent.  Specifically, PJM is making clear that any committed RBP 
Resource will be required to be offered into the RPM Auction associated with the first 
Delivery Year that such resource has an RBP commitment and is expected to be in 
service.144  That must offer obligation, regardless of resource type, will continue through 
the end of the term of the RBP commitment. 
The only exception to this general rule is that if an RBP Resource has a commitment 
beginning with the 2030/2031 Delivery Year and is not the subject of a notice of intent to 
be offered into the Base Residual Auction for the 2030/2031 Delivery Year, such 
committed RBP Resource would be required to be offered into the next RPM Auction to 
the extent such resource has an RBP commitment and is expected to be in service for the 
relevant Delivery Year.145  This limited exception is necessary because a Planned 
Generation Capacity Resource that is not the subject of a notice of intent to offer would 
not have been included in the planning parameters for the 2030/2031 Base Residual 
Auction.  For future auctions, committed RBP Resources would not be required to submit 
binding notices of intent to offer because PJM will know which resources have an RBP 
 
144 Proposed Tariff, Attachment DD, section 18.6(a); proposed Tariff, Attachment DD, section 6.6(j); Tariff, 
Attachment DD, section 6.6A(e). 
145 Proposed Tariff, Attachment DD, section 18.6(a); proposed Tariff, Attachment DD, section 6.6(j); 
proposed Tariff, Attachment DD, section 6.6A(e); Tariff, Attachment DD, section 5.5(b).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 58 
 
commitment and automatically include those resources in the planning models for the 
relevant Delivery Years.146 
IV. 
REQUEST 
FOR 
WAIVER 
OF 
TARIFF, 
ATTACHMENT 
DD, 
SECTIONS 16.2 AND 16.3 
Under the Tariff provisions approved in the September 29 Order, a Reliability 
Backstop Auction is triggered if, for three consecutive Delivery Years, the Base Residual 
Auction “equates to an installed reserve margin that is more than one percentage point 
lower than the approved PJM Region Installed Reserve Margin.”147  The Base Residual 
Auctions for the 2027/2028 and 2028/2029 Delivery Years resulted in an installed reserve 
margin that was more than one percentage point lower than the approved PJM Region 
Installed Reserve Margin.148  The Base Residual Auction associated with the 2029/2030 
Delivery Year could potentially clear short as well.  Should that occur, the current Tariff 
would require PJM to “declare a capacity shortage and make a filing with FERC for 
approval to conduct a Reliability Backstop Auction.”149  Additionally, the Tariff also calls 
 
146 See proposed Tariff, Attachment DD, section 5.5(b) 
147 Tariff, Attachment DD, section 16.2. 
148 See 2027/2028 Base Residual Auction Reserve Target Shortfall Report, PJM Interconnection, L.L.C., 1 
(Feb. 9, 2026), https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2027-2028/2027-
2028-bra-reserve-target-shortfall-report.pdf [https://perma.cc/TA3Y-95AX] (“2027/2028 BRA Report”) 
(“PJM Interconnection cleared the 2027/2028 Base Residual Auction with a reserve margin that is more than 
one percentage point below the Installed Reserve Margin target, and with total Unforced Capacity of all Base 
Load Generation Resources less than the forecasted minimum hourly load.  This confirmed shortfall 
constitutes a triggering event as defined in the PJM Tariff, mandating an investigation to determine the root 
causes of the region’s failure to secure sufficient resource adequacy.”); 2028/2029 Base Residual Auction 
Reserve Target Shortfall Report, PJM Interconnection, L.L.C., 3 (July 14, 2026), https://www.pjm.com/-
/media/DotCom/markets-ops/rpm/rpm-auction-info/2028-2029/2028-2029-reliability-backstop-baseload-
generation-check.pdf (“2028/2029 BRA Report”). 
149 Tariff, Attachment DD, sections 16.3(a)(i)-(ii).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 59 
 
for PJM to “investigate the cause for clearing short of the reliability requirement and to 
recommend corrective action.”150 
Because the RBP effectively fulfills the same purpose as the Reliability Backstop 
Auction called for in Tariff, Attachment DD, section 16, in the July 31 Filing, PJM 
proposed to reset the timeframe for triggering a Reliability Backstop Auction and the 
investigation into the triggering shortfalls to the restart “with the 2032/2033 Delivery Year 
and thereafter.”151  The September 29 Order accepted and suspended this change effective 
February 28, 2027.152 
Given that these accepted revisions do not become effective until February 28, 
2027, to the extent the 2029/2030 Base Residual Auction, held in December 2026, clears 
short of the reliability requirement, the currently effective Tariff would require PJM to 
“investigate the cause for the shortage, and recommend corrective action,”153 but such 
investigation would then cease once the accepted tariff records become effective.  Because 
the RBP is designed to address the shortfall and to avoid an unnecessary expense of 
resources, PJM requests waiver of the obligation in Tariff, Attachment DD, section 16.2 to 
perform such investigation.   
The Commission will grant waiver of tariff provisions where:  (1) the applicant 
acted in good faith; (2) the waiver is of limited scope; (3) the waiver addresses a concrete 
problem; and (4) the waiver does not have undesirable consequences, such as harm to third 
 
150 Tariff, Attachment DD, section 16.2. 
151 July 31 Filing, Attachment B at proposed Tariff, Attachment DD, sections 16.2, 16.3(a)(i)-(ii). 
152 See September 29 Order, 196 FERC ¶ 61,245 at P 1 n.3 & Appendix A; ordering para. (A). 
153 Tariff, Attachment DD, section 16.2.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 60 
 
parties.154  This one-time prospective waiver satisfies all four of the Commission’s waiver 
criteria.   
First, the waiver request is being submitted in good faith.  As noted above, such 
investigation is unnecessary and would needlessly expend scarce resources.  PJM has 
already issued two reports detailing the causes of the shortfall from the 2027/2028 and 
2028/2029 Base Residual Auctions.155  Given that many of the same supply constraints and 
load growth remains for the 2029/2030 Delivery Year, it is unlikely that further 
investigation will discover different reasons for the current resource adequacy position.  
Additionally, this FPA section 205 filing proposes to commence the RBP on March 1, 
2027, which is designed as a stop-gap measure to address the expected resource adequacy 
shortfall that would be duplicative of a Reliability Backstop Auction.  Moreover, PJM is 
already actively engaged with stakeholders through its “Powering Reliability Through 
Markets” discussions designed to formulate updated market rules that will more efficiently 
and effectively provide resource adequacy for the PJM Region.156   
Second, the waiver request is of limited scope.  PJM seeks a one-time waiver of 
Tariff, Attachment DD, sections 16.2 and 16.3 upon completion of the 2029/2030 Base 
Residual Auction in the event such auction clears short.  Third, the waiver request 
addresses a concrete problem—the obligation to conduct an investigation into the cause of 
 
154 PJM Interconnection, L.L.C., 191 FERC ¶ 61,202, at P 14 (2025) (citing waiver standards and allowing 
tariff waiver to implement equitable relief in light of certain tariff provisions); see Midcontinent Indep. Sys. 
Operator, Inc., 154 FERC ¶ 61,059, at P 13 (2016) (same). 
155 See 2027/2028 BRA Report; 2028/2029 BRA Report.  
156 Powering Reliability Through Market Design Workshops, PJM Interconnection, L.L.C., 
https://www.pjm.com/committees-and-groups/workshops/prtmdw 
[https://perma.cc/6K9W-YRL8] 
(last 
visited Oct. 28, 2026).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 61 
 
the shortage and recommend corrective actions.  As noted, this is appropriate given that 
PJM will already be conducting the RBP on March 1, 2027, and conducting a Reliability 
Backstop Auction right after the RBP is not necessary.  Further, another investigation will 
likely yield the same conclusions as the two recent reports.  Fourth, granting the waiver 
request will not have undesirable consequences, such as harm to third parties.  There is no 
need to conduct such investigation or to recommend corrective measures.  PJM is already 
going to hold the RBP to procure new capacity. 
In short, the waiver request satisfies all four elements for waiver of the Tariff, and 
PJM asks that the Commission grant the waiver request.   
V. 
STAKEHOLDER CONSULTATION 
As required by Tariff, section 9.2(b), PJM consulted the Members Committee and 
the Transmission Owners on October 22, 2026, seven days prior to submitting this filing.157  
In addition, PJM also consulted with the Transmission Owners on October 22, 2026, in 
accordance with the Consolidated Transmission Owners Agreement, section 7.5.1(ii).158  
This filing includes feedback and suggestions from stakeholders during that consultation 
that PJM found meritorious.   
VI. 
PROPOSED EFFECTIVE DATES AND UPDATED RBP TIMING 
As noted above, PJM now anticipates commencing the RBP on March 1, 2027, 
provided the Commission accepts the Tariff revisions proposed herein.  This 
 
157 
Special 
Members 
Committee, 
Agenda, 
PJM 
Interconnection, 
L.L.C. 
(Oct. 
22, 
2026), 
https://www.pjm.com/-/media/DotCom/committees-groups/committees/mc/2026/20261022-
special/agenda.pdf [https://perma.cc/4F23-H5QB].  
158 Transmission Owners Agreement-Administrative Committee, PJM TOA-AC Open-Session, Special 
Session 
Agenda, 
PJM 
Interconnection, 
L.L.C. 
(Oct. 
22, 
2026), 
https://www.pjm.com/-
/media/DotCom/committees-groups/committees/toa-ac/2026/20261022/20261022-agenda.pdf 
[https://perma.cc/XEK9-UE59].

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 62 
 
commencement date aligns with the Commission’s determination to suspend the RBP rules 
until February 28, 2027, as March 1, 2027, is the first business day on which those rules, 
as revised in this filing, would be effective.  PJM considered whether the RBP could 
commence earlier than March 1, 2027.  However, an earlier commencement would not 
provide sufficient time to incorporate the most current load forecast and capacity 
accreditation factors, each of which is expected to become available in or around February 
2027 and is necessary to calculate an updated Initial RBP Target.  Commencing the RBP 
on March 1, 2027, therefore provides PJM with the opportunity to employ the most current 
data available while remaining consistent with the Commission’s established effective date 
for the RBP framework. 
In addition, PJM is proposing to extend the RBP Sell Offer window by one week 
so that it will be open for a total of four weeks.159  One additional week of the offer window 
will allow PJM to commence the RBP on March 1, 2027, while providing developers of 
projects in PJM’s cycle 01 interconnection the opportunity to view the study results from 
phase 1 of the interconnection cycle study, which is currently scheduled to be posted by 
March 26, 2027.160  Relatedly, PJM is specifying that if the most current PJM study is 
available, such study may be used in lieu of an independent consultant report that details 
the study information and project timeline to support the expected commercial operation 
date of an RBP Resource.161 
 
159 Proposed Tariff, Attachment DD, section 18.4. 
160 
See 
Cycle 
Timeline, 
PJM 
Interconnection, 
L.L.C., 
https://www.pjm.com/planning 
[https://perma.cc/AL65-9ALQ] (last visited Oct. 28, 2026). 
161 Proposed Tariff, Attachment DD, section 18.5(f).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 63 
 
Further, given that, as discussed in Part II.A, PJM is proposing a new Tariff, 
Attachment DD, section 18.3A to require for Electric Distributors to report Large Load 
MW quantities to PJM no later than seven days prior to the commencement of the RBP.  
An effective date earlier than February 28, 2027, is necessary to afford Electric Distributors 
time to review the Commission’s order, understand the requirement, gather the requisite 
information, and report it to PJM.  Accordingly, PJM is proposing a January 29, 2027 
effective date for proposed Tariff, Attachment DD, section 18.3A.  However, the 
Commission should not feel constrained to wait until January 29, 2027, to issue an order 
on the proposed RBP rules, but should feel free to issue an order whenever it feels 
appropriate before January 29, 2027. 
Finally, PJM respectfully requests that the Commission issue an order on all aspects 
of this filing no later than January 29, 2027.  A Commission order by that date would 
provide PJM and market participants with sufficient certainty regarding the applicable RBP 
rules and facilitate orderly administration of the RBP beginning on March 1, 2027.  
Accordingly, while PJM requests an effective date of February 28, 2027, for most of the 
substantive Tariff revisions proposed herein, PJM further requests that the Commission act 
on this filing no later than January 29, 2027, to provide the advance notice necessary for 
efficient administration of the RBP.

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 64 
 
VII. 
DESCRIPTION OF SUBMITTAL 
This filing consists of the following: 
1.  This transmittal letter; 
2.  Attachment A – Revisions to the Tariff, in redline format; 
3.  Attachment B – Revisions to the Tariff, in clean format; 
4.  Attachment C – Affidavit of Gwen Kelly; and 
5.  Attachment D – Affidavit of Danielle Croop. 
VIII. CORRESPONDENCE 
The following individuals are designated for inclusion on the official service list in 
this proceeding and for receipt of any communications regarding this filing: 
Craig Glazer 
Vice President – Federal Government Policy 
PJM Interconnection, L.L.C. 
1200 G Street, N.W., Suite 600 
Washington, DC  20005 
(202) 423-4743 
craig.glazer@pjm.com 
Chenchao Lu 
Associate General Counsel 
PJM Interconnection, L.L.C. 
2750 Monroe Boulevard 
Audubon, PA  19403 
(610) 666-2255 
chenchao.lu@pjm.com 
 
Ryan J. Collins 
Vivian W. Chum 
Wright & Talisman, P.C. 
1200 G Street, N.W., Suite 600 
Washington, D.C.  20005 
(202) 393-1200 (phone) 
collins@wrightlaw.com 
chum@wrightlaw.com 
 
 
IX. 
SERVICE 
PJM has served a copy of this filing on all PJM Members and on all state utility 
regulatory commissions in the PJM Region by posting this filing electronically.  In

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 65 
 
accordance with the Commission’s regulations,162 PJM will post a copy of this filing to the 
Commission filings section of its internet site, located at the following link: 
https://www.pjm.com/library/filing-order with a specific link to the newly filed document, 
and will send an e-mail on the same date as this filing to all PJM Members and all state 
utility regulatory commissions in the PJM Region163 alerting them that this filing has been 
made by PJM and is available by following such link.  If the document is not immediately 
available by using the referenced link, the document will be available through the 
referenced link within 24 hours of the filing.  Also, a copy of this filing will be available 
on 
the 
Commission’s 
eLibrary 
website 
located 
at 
the 
following 
link: 
http://www.ferc.gov/docsfiling/elibrary.asp in accordance with the Commission’s 
regulations and Order No. 714.164 
 
162 See 18 C.F.R. §§ 35.2(e), 385.2010(f)(3). 
163 PJM already maintains, updates and regularly uses e-mail lists for all PJM Members and affected state 
commissions. 
164 Electronic Tariff Filings, Order No. 714, 124 FERC ¶ 61,270 (2008), final rule, Order No. 714-A, 147 
FERC ¶ 61,115 (2014).

Debbie-Anne Reese, Secretary 
November 9, 2026 
Page 66 
 
X. 
CONCLUSION 
Based on the foregoing, PJM respectfully requests that the Commission accept the 
proposed Tariff revisions as discussed herein and effective as proposed. 
Respectfully submitted, 
/s/ Chenchao Lu        
Craig Glazer 
Vice President – Federal Government Policy 
PJM Interconnection, L.L.C. 
1200 G Street, N.W., Suite 600 
Washington, DC  20005 
(202) 423-4743 
craig.glazer@pjm.com 
Chenchao Lu 
Associate General Counsel 
PJM Interconnection, L.L.C. 
2750 Monroe Boulevard 
Audubon, PA  19403 
(610) 666-2255 
chenchao.lu@pjm.com 
 
Ryan J. Collins 
Vivian W. Chum 
Wright & Talisman, P.C. 
1200 G Street, N.W., Suite 600 
Washington, D.C.  20005 
(202) 393-1200 (phone) 
collins@wrightlaw.com 
chum@wrightlaw.com 
 
 
 
On behalf of 
PJM Interconnection, L.L.C.