{"document":{"slug":"rehearing-er26-3380-constellation","title":"Request for Rehearing and Clarification of Constellation Energy Generation, LLC","issued":"2026-10-29","accession":"20261029-5261","docket":"ER26-3380-001","group":"Rehearing of FERC's PJM Reliability Backstop Procurement order","filer":"Constellation Energy Generation","kind":"request for rehearing","file":"sources/originals/20261029-5261_Constellation Request for Rehearing (10-29-26).pdf","url":"https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20261029-5261","sha256":"33743afe054d66f679fe6e668be974d25b0c9980bb7dd075f94cc701198736d1","pages":21,"tokens":5805,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":261,"text":"UNITED STATES OF AMERICA \n \nBEFORE THE \nFEDERAL ENERGY REGULATORY COMMISSION \n \n \nPJM Interconnection, L.L.C. \nDocket Nos. \nER26-3380-000 \nEL26-108-000 \n \n \nREQUEST FOR REHEARING AND CLARIFICATION  \nOF CONSTELLATION ENERGY GENERATION, LLC \n \nPursuant to Section 313 of the Federal Power Act (“FPA”)1 and Rule 713 of the Federal \nEnergy Regulatory Commission (“Commission”) Rules of Practice and Procedure,2 Constellation \nEnergy Generation, LLC (“Constellation”) respectfully requests that the Commission grant \nrehearing and clarification of its September 29, 2026, Order Accepting Reliability Backstop \nProcurement and Establishing Further Procedures.3 \n \nBACKGROUND \nOn July 31, 2026, PJM Interconnection, L.L.C. (“PJM”) submitted revisions to the PJM \nOpen Access Transmission Tariff (“Tariff”) and the Reliability Assurance Agreement Among \nLoad Serving Entities (“RAA”) to establish the Reliability Backstop Procurement (“RBP”).4  \nNumerous parties filed comments and protests addressing the proposal, including Constellation.5 \n \n1 16 U.S.C. § 825l. \n2 18 C.F.R. § 385.713. \n3 PJM Interconnection, L.L.C., 196 FERC ¶ 61,245 (2026) (“Order”).  \n4 PJM Interconnection, L.L.C., Reliability Backstop Procurement to Address Resource Adequacy Concerns Stemming \nfrom Large Loads, Docket No. ER26-3380-000 (filed July 31, 2026) (“RBP Proposal”).  Capitalized terms used but \nnot otherwise defined herein have the meaning as defined in the Tariff, the RAA, or the PJM Proposal, as applicable.  \n5 See PJM Interconnection, L.L.C., Limited Protest of Constellation Energy Generation, LLC, Docket No. ER26-\n3380-000 (filed Aug. 21, 2026) (“Limited Protest”); PJM Interconnection, L.L.C., Motion for Leave to Answer and \nAnswer of Constellation Energy Generation, LLC, Docket No. ER26-3380-000 (filed Sept. 8, 2026) (“Constellation"},{"page":2,"startToken":261,"endToken":626,"text":"2 \nThe Order accepted the RBP tariff records for filing, suspended them for five months, \ninstituted a parallel proceeding under section 206 of the FPA, and established paper-hearing \nprocedures concerning cost allocation, Transmission Owner exit rules, and LSE collateral \nrequirements. The Commission otherwise found the RBP Proposal just and reasonable.6 \nConstellation seeks rehearing of two final determinations in the Order. First, paragraph 51 \nrejected—without reasoned analysis—Constellation’s request to permit energy-only resources \nobtaining new capacity rights, like Constellation’s Eddystone Units 3 & 4 (“Eddystone”), to \nqualify as RBP Resources after obtaining new Capacity Interconnection Rights (“CIRs”). The \nOrder also recited, but did not decide, Constellation’s separate request that such resources be \neligible to provide Qualifying RBP Offset UCAP MW.7 \nSecond, paragraph 53 accepted PJM’s proposed mandatory price-taker treatment for \ncommitted RBP Sell Offers, despite such requirement resulting in distorted Reliability Pricing \nModel (“RPM”) price signals,8 without (i) addressing Constellation’s annual isolation mechanism \nsupported by Dr. Shanker’s expert affidavit,9 or (ii) engaging in a reasoned balancing analysis, \ninstead pointing to certain reliability-must-run resource arrangements to justify imposing zero-\n \nAnswer”); PJM Interconnection, L.L.C., Motion for Leave to Answer and Answer of Constellation Energy Generation, \nLLC, Docket No. ER26-3380-000 (filed Sept. 21, 2026) (“Constellation Answer to PJM”). \n6 Order at PP 23–24.  \n7 Limited Protest at 13–14; Constellation Answer at 2–3; Constellation Answer to PJM at 2–4. \n8 Limited Protest at 5–10 (“A mandatory $0/MW-day offer is not the reasonable or just way to address that risk \nbecause such mandate does more harm than good by signaling excess supply if anticipated load is delayed or does \nnot show up, thereby encouraging departure of existing generation—recreating the very reliability problems that \nspurred the RBP in the first place”); PJM Interconnection, L.L.C., Limited Protest of the NRG Companies, Docket \nNo. ER26-3380-000 at 10–11 (filed Aug. 21, 2026) (“[T]he proposed requirement that resources with RBP \ncommitments offer as price-takers into RPM Auctions for the associated Delivery Years ‘is antithetical to creating a \nnormal capacity market,’” and “‘send[s] the wrong signals [to] potential investors of PJM generation capacity.’”). \n9 Limited Protest at 10–13."},{"page":3,"startToken":626,"endToken":851,"text":"3 \nprice RPM participation on a region-wide procurement for terms lasting up to fifteen years, and \nignoring other Commission precedent rejecting zero priced out of market supply due to its price \nsuppressive effect.10 \nIn an abundance of caution, Constellation also requests clarification that the paper-hearing \nprocedures leave fully open the collateral, Transmission Owner exit-charge, and cost-allocation \nissues identified below. To the extent the Order excludes or prejudges any of those matters, \nConstellation alternatively seeks rehearing. \n \nSTATEMENT OF ISSUES AND SPECIFICATION OF ERRORS \nPursuant to Rule 713(c),11 Constellation provides the following statement of issues and \nspecification of errors: \n1. Eddystone’s eligibility as an RBP Resource. The Commission acted arbitrarily \nand capriciously, misapprehended the record, and failed to engage in reasoned \ndecision-making when it rejected Constellation’s request that Eddystone and \nsimilarly situated Energy Resources be eligible as RBP Resources, where such \nresources have no current CIRs or capacity commitment, must undertake a new \ninterconnection process and obtain new CIRs, fund any required Network \nUpgrades, and satisfy the same deliverability, accreditation, commercial-\noperation, and performance requirements applicable to greenfield resources. \nOrder at PP 46, 48, 51; PSEG Energy Resources & Trade LLC v. FERC, 665 F.3d \n203, 208-210 (D.C. Cir. 2011); ANR Storage Co. v. FERC, 904 F.3d 1020, 1024-\n \n10 Order at P 53. \n11 18 C.F.R. § 385.713(c)."},{"page":4,"startToken":851,"endToken":1131,"text":"4 \n1029 (D.C. Cir. 2018); Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. \nAuto. Ins. Co., 463 U.S. 29, 43 (1983). \n2. Eddystone’s eligibility to provide Qualifying RBP Offset UCAP MW. The \nCommission erred by failing to decide Constellation’s separately and expressly \npresented request that Energy Resources obtaining new CIRs through a new \ninterconnection process be eligible to provide Qualifying RBP Offset UCAP MW. \nOrder at P 141; PSEG Energy Resources & Trade LLC v. FERC, 665 F.3d at 208-\n210; ANR Storage Co. v. FERC, 904 F.3d at 1024-1029; Motor Vehicle Mfrs. \nAss’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43. \n3. Failure to address Constellation’s annual isolation remedy. The Commission \nacted arbitrarily and capriciously and failed to support its determination under \nsection 205 of the FPA when it accepted mandatory price-taker treatment as \nnecessary to avoid duplicate capacity procurement without adequately considering \nthe market impacts of such approach or addressing Constellation’s annual, \nauction-specific isolation mechanism and matched demand adjustment, which \nprevents duplicate procurement for the matched quantity by adjusting both supply \nand demand. Order at P 53; PSEG Energy Resources & Trade LLC v. FERC, 665 \nF.3d at 208; ANR Storage Co. v. FERC, 904 F.3d at 1024; Motor Vehicle Mfrs. \nAss’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43. \n4.  Failure to engage meaningfully with ISO-NE and Reliability Must Run \nprecedent. The Commission acted arbitrarily and capriciously by failing to \nengage in a meaningful balancing analysis to justify the RBP Proposal’s price-\ntaker requirement, and by relying on the Commission’s Reliability Must Run"},{"page":5,"startToken":1131,"endToken":1389,"text":"5 \n(“RMR”) precedent as justification and treating long-term, forecast-driven, \nregion-wide RBP commitments as equivalent to localized, short-term RMR \narrangements without addressing the material differences in purpose, scale, \nduration, and associated-load certainty—particularly when the Commission’s \nprecedent in its ISO New England, Inc. (“ISO-NE”) self-supply proceedings \nrejected zero priced out of market supply due to its price suppressive effect.  \nOrder at PP 44, 53; PJM Interconnection, L.L.C., 192 FERC ¶ 61,135, at P 31 \n(2025); ISO New England, Inc., 138 FERC ¶ 61,027 at PP 71–72, 75 (2012); \nPSEG Energy Resources & Trade LLC v. FERC, 665 F.3d at 208; ANR Storage \nCo. v. FERC, 904 F.3d at 1024; Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State \nFarm Mut. Auto. Ins. Co., 463 U.S. at 43. \n5. Scope of the LSE collateral paper hearing. In an abundance of caution, the \nCommission should clarify that the paper hearing concerning appropriate \ncollateral requirements for RBP buyers encompasses Constellation’s arguments \nconcerning the size and methodology of the RBP Credit Rate, gross contractual \nvalue versus net payment exposure, overlapping collateralization, recognition of \nexisting credit support, direct customer or affiliate posting for the responsible \nLSE’s account, and objective recalculation and release standards. To the extent \nthe Order intended to exclude or reject those matters, such an exclusion is \narbitrary and capricious and rehearing is warranted. Order at PP 190, 194, 204–\n206; PJM Interconnection, L.L.C., 186 FERC ¶ 61,055 at P 29 (2024); PSEG \nEnergy Resources & Trade LLC v. FERC, 665 F.3d at 208."},{"page":6,"startToken":1389,"endToken":1667,"text":"6 \n6. Transmission Owner exit charges. In an abundance of caution, the Commission \nshould clarify that paragraphs 181–182 of the Order neither establish a \npresumption that LSEs in an exiting Transmission Owner’s zone must bear RBP \nexit charges nor predetermine the allocation of such charges. To the extent the \nOrder intended otherwise, the Commission acted arbitrarily and capriciously and \nrehearing is warranted. Order at PP 177–182; Duquesne Light Co., 122 FERC ¶ \n61,039 at PP 83, 89–94 (2008); PSEG Energy Resources & Trade LLC v. FERC, \n665 F.3d at 208; K N Energy, Inc. v. FERC, 968 F.2d 1295, 1300 (D.C. Cir. \n1992); Illinois Commerce Commission v. FERC, 576 F.3d 470, 477 (7th Cir. \n2009). \n7. Cost allocation based on accurate and up-to-date load forecasts. In an \nabundance of caution, the Commission should clarify that paragraphs 153–160 of \nthe Order leave fully open whether a just and reasonable RBP allocation must use \nPJM’s most current official load forecast after application of PJM’s ordinary \nforecasting and vetting procedures; must reasonably capture all forecast large-\nload growth, including load already embedded in the base forecast; and must use \nconsistent or reconciled data to establish the procurement target and allocate its \ncosts. To the extent the Order intended otherwise, the Commission acted \narbitrarily and capriciously and rehearing is warranted. Order at PP 153–160; K N \nEnergy, Inc. v. FERC, 968 F.2d at 1300; Illinois Commerce Commission v. FERC, \n576 F.3d at 477; Old Dominion Electric Cooperative v. FERC, 898 F.3d 1254, \n1260 (D.C. Cir. 2018); Emera Maine v. FERC, 854 F.3d 9, 24–27 (D.C. Cir. \n2017)."},{"page":7,"startToken":1667,"endToken":1958,"text":"7 \n \nREQUEST FOR REHEARING AND CLARIFICATION \nA. \nThe Commission Erred in Rejecting Constellation’s Proposed Eligibility \nRevisions for RBP Resources and Resources Eligible to Supply Qualifying \nRBP Offset UCAP MW \nConstellation requested12 that the Commission require PJM to modify the criteria set forth \nin the RBP Proposal so that resources like Eddystone could qualify as RBP Resources or as \nresources eligible to provide Qualifying RBP Offset UCAP MW. Specifically, Constellation \nrecommended that PJM modify the criteria listed in Sections 18.2 and 18.5 of the proposed Tariff \nto clarify that Energy Resources (i.e., energy-only resources with no capacity rights) seeking new \nCIRs through an Interconnection Request would be eligible to supply Qualifying RBP Offset \nUCAP MW and qualify as an RBP Resource.13 \nAs currently drafted, Section 18.5 of the proposed Tariff requires a generation or Energy \nStorage Resource offered as an RBP Resource to meet certain criteria, including that such RBP \nResources be: \n(i) \nComposed of new Installed Capacity and new Maximum Facility \nOutput; \n(ii) \nSupported by new Capacity Interconnection Rights (if located in the \nPJM Region) or Capacity Interconnection Rights transferred from a \ndeactivated resource or a resource that announced deactivation as of April \n10, 2026; and \n(iii) \nConsist of (1) new build; (2) incremental capacity created by an \nuprate of an existing Generation Capacity Resource’s or Energy Storage \nResource’s installed capacity and associated level of Capacity \nInterconnection Rights; or (3) repowering of a generation resource that had \ndeactivated, or announced deactivation, on or before April 10, 2026.14 \n \n12 Limited Protest at 13–14; Constellation Answer at 2–3; Constellation Answer to PJM at 2–4. \n13 Limited Protest at 13–14; Constellation Answer at 2–3. \n14 See RBP Proposal, attach. A § 18.5(b)."},{"page":8,"startToken":1958,"endToken":2326,"text":"8 \nThose provisions exclude an existing Energy Resource that presently has no CIRs but seeks \nto become a Capacity Resource by submitting a new Interconnection Request, obtaining new CIRs, \nfunding any required Network Upgrades, and satisfying the RBP’s deliverability, accreditation, \ncommercial-operation, and performance requirements. \nSimilarly, as currently drafted, proposed Tariff Section 18.2(b) arguably would exclude \nEnergy Resources like Eddystone because Eddystone does not fit squarely within the list of \nenumerated criteria, e.g., that resources be “new builds,” a “repowering” of a deactivated resource, \nor be composed of new incremental capacity created by an uprate of existing Generation Capacity \nResources. \nIn its Order, the Commission found as a general matter that PJM had “demonstrated that \nits proposed eligibility requirements for RBP Resources are just and reasonable,”15 and rejected \nConstellation’s request.16  With respect to Constellation’s argument regarding the criteria for \nQualifying RBP Offset UCAP MW, the Commission provided no response. \nEddystone’s circumstances demonstrate why its exclusion and the exclusion of similarly-\nsituated resources is unreasonable. Eddystone is now an Energy Resource with no capacity \nrights.17 To return as a Capacity Resource, Eddystone must reenter the interconnection queue, \nobtain new CIRs, and bear any required Network Upgrade costs. The facility is already constructed \n \n15 Order at P 48.  \n16 Id. at P 51.  \n17 Eddystone, which had been slated to retire, was directed by the Secretary of Energy to remain online and available \npursuant to the Secretary’s FPA section 202(c) authority.  Dep’t of Energy, Order No. 202-26-40 (Aug. 21, 2026); \nDep’t of Energy, Order No. 202-26-24 (May 21, 2026); Dep’t of Energy, Order No. 202-26-17 (Feb. 23, 2026) \n(“Feb. 2026 Eddystone Order”); Dep’t of Energy, Order No. 202-25-10 (Nov. 25, 2025); Dep’t of Energy, Order \nNo. 202-25-8 (Aug. 28, 2025); Dep’t of Energy, Order No. 202-25-4 (May 30, 2025).  The Secretary directed that \nEddystone may not participate as a capacity resource in PJM while retained under section 202(c).  See e.g., Referral \nto the Federal Energy Regulatory Commission, Docket No. AD25-15-000 (filed June 17, 2025); Feb. 2026 \nEddystone Order at 10, Ordering Para. G (emphasis added).  Accordingly, earlier in 2026 Constellation removed \nEddystone from capacity resource status and transferred the Eddystone capacity rights."},{"page":9,"startToken":2326,"endToken":2691,"text":"9 \nand permitted, with fuel supply in place, and therefore may be capable of providing new \ndeliverable capacity more quickly and efficiently than a greenfield project or even a traditional \n“repowering.”18  The Commission has signaled that it is increasingly concerned that resource \nadequacy in PJM is insufficient to meet growing demand.19  As a policy matter, including Energy \nResources obtaining new CIRs among the resources that qualify as RBP Resources or are eligible \nto provide Qualifying RBP Offset UCAP MW would provide an incentive for those resources to \nadd badly needed new capacity to the system. \nParagraph 51 framed Constellation’s request as involving a resource that could provide \nnew CIRs but “no new installed capacity.” That framing does not address the substance of \nConstellation’s request.20 Eddystone has no current CIRs (or “installed capacity,” as that term is \ndefined)21 and cannot provide capacity unless it undertakes a new interconnection process, obtains \nnew CIRs, funds any required Network Upgrades, and satisfies the RBP’s applicable deliverability, \naccreditation, commercial-operation, and performance requirements. The relevant resource-\n \n18 Limited Protest at 14; Constellation Answer to PJM at 3–4.  \n19  See, e.g., PJM Interconnection, L.L.C.,  195 FERC ¶ 61,211, P 103 (2026) (“While we are encouraged by the \nimplementation of such processes to ensure resource adequacy and faster interconnection and ongoing stakeholder \ndiscussions, we remain concerned that these efforts may fall short in light of generator retirements and tightening \nsupply conditions.”). \n20 Constellation’s requested relief is not limited to deletion of the phrase “new Maximum Facility Output” from the \nproposed eligibility criteria. Constellation asks the Commission to direct whatever conforming revisions to sections \n18.5(b)(i) and 18.5(b)(iii) are necessary to permit an existing Energy Resource with no current CIRs to qualify after \nobtaining new CIRs through a new Interconnection Request and satisfying all other applicable RBP requirements.   \n21 The “Installed Capacity” or “ICAP” of a generating resource may not exceed the resource’s CIRs.  Accordingly, a \ngenerating resource with no CIRs also has no “Installed Capacity.”  See PJM Manual 21B, Section 6.  An energy-\nonly resource that acquires new CIRs through the interconnection process would therefore also obtain new Installed \nCapacity."},{"page":10,"startToken":2691,"endToken":2921,"text":"10 \nadequacy increment is new deliverable capacity available to PJM—not whether the underlying \ngenerating equipment was newly constructed.22 \nThe Commission’s error with respect to Constellation’s request for offset capacity \neligibility is even more clear. The Order expressly recited Constellation’s request that Energy \nResources obtaining new CIRs be eligible to provide Qualifying RBP Offset UCAP MW, but never \ndecided it.23 For the same reasons discussed above regarding RBP Seller eligibility, the \nCommission should grant rehearing and make such resources eligible to provide Qualifying RBP \nOffset UCAP MW. \nThe Commission failed to engage in reasoned decision-making when it accepted PJM’s \nRBP Proposal without modification and rejected Constellation’s recommendation to modify the \ncriteria for RBP Resources, and failed to articulate its reasoning entirely with respect to \nConstellation’s recommendations related to the criteria for Qualifying RBP Offset UCAP MW. \nTo comply with the Administrative Procedure Act (“APA”), the Commission must “examine the \nrelevant data and articulate a satisfactory explanation for its action.”24  Accordingly, the \nCommission’s “failure to respond meaningfully” to Constellation’s objections “renders its \ndecision arbitrary and capricious.”25 \n \n22 Order at P 48. \n23 Id. at P 141. \n24 Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (emphasis \nadded). \n25 PSEG Energy Res. & Trade LLC v. FERC, 665 F.3d 203, 208 (D.C. Cir. 2011)."},{"page":11,"startToken":2921,"endToken":3277,"text":"11 \nB. \nThe Commission Did Not Justify Mandatory Price-Taker Treatment \n1. \nThe Commission Failed to Engage in a Reasoned Balancing Analysis \nIn its Order, the Commission rejected the arguments of Constellation and other commenters \nobjecting to the RBP Proposal’s price taker requirement, stating that “the Commission has \nconsistently found that Regional Transmission Organizations and Independent System Operators \ncan reasonably require resources that are compensated outside of the capacity market because they \nare needed to maintain reliability to offer as price-takers in capacity auctions to avoid double \nprocurement, even at the risk of price suppression.”26   \nNotably, as support for its finding, the Commission cited to its RMR precedent, without \nproviding any additional analysis. The Order’s reliance on RMR precedent does not supply the \nmissing analysis.27  Unlike in the RMR proceedings, in the Order the Commission failed to engage \nin a reasoned balancing analysis to determine whether it is just and reasonable in these \ncircumstances to require out-of-market resources to offer as price takers.  Any such meaningful \nanalysis would find that on balance the facts presented here, unlike in the RMR proceedings, weigh \nin favor of finding that the RBP Proposal’s price taker requirement is unjust and unreasonable \ngiven the material and potentially long-lived effect it may have on RPM price formation for years \nto come. \n \n26 Order at P 53. \n27 Id. (citing PJM Interconnection, L.L.C., 196 FERC ¶ 61,098, at P 21 (2026) (finding that PJM’s proposal to \ninclude reliability-must-run units in the RPM supply stack as price-takers is just and reasonable and consistent with \nCommission precedent regarding the treatment of reliability-must-run resources in other regions) (citing PJM \nInterconnection, L.L.C., 193 FERC ¶ 61,234, at P 10 (2025) (citing PJM Interconnection, L.L.C., 190 FERC \n¶ 61,088, at P 50 (2025) (citing Indep. Power Producers of N.Y., Inc. v. N.Y. Indep. Sys. Operator, Inc., 150 FERC \n¶ 61,214 (2015); N.Y. Indep. Sys. Operator, Inc., 150 FERC ¶ 61,116 (2015), order on reh’g & compliance, 155 \nFERC ¶ 61,076 (2016), order on reh’g & compliance, 161 FERC ¶ 61,189 (2017); ISO New Eng. Inc., 165 FERC \n¶ 61,202 (2018)))))."},{"page":12,"startToken":3277,"endToken":3551,"text":"12 \nRMR arrangements generally retain existing units for limited periods to address identified \ntransmission-reliability violations affecting existing load.28 The RBP instead may place 6,831.3 \nMW of forecast-driven, separately compensated capacity into repeated RPM Auctions as price-\ntaker supply for as long as fifteen years, even though the associated load may energize later than \nforecast (or not at all). \nThose distinctions concern the very factors the Commission has considered when balancing \nthe reliability rationale for out-of-market support against its effect on market price formation and \nthe potential impacts on resource adequacy in the long-term: purpose, magnitude, duration, and \ncertainty of need. Yet paragraph 53 simply concluded that the RBP is “likewise” entitled to price-\ntaker treatment because both RBP and RMR resources are procured outside RPM for reliability \npurposes. Characterizing the arrangements at that level of generality does not explain why their \nmaterial differences are irrelevant, or why, in this instance, the price-taker requirement is just and \nreasonable. \nFurther emphasizing the Commission’s failure to engage in any meaningful and reasoned \nbalancing analysis here is the Commission’s precedent in ISO New England, in which the \nCommission engaged in an extensive analysis weighing the potential effects of out-of-market \nresources.29  There, the Commission found that self-supplied resources participating in the \ncapacity auction as price-takers could have a price suppressing effect on the market.  The \nCommission explained that “just and reasonable market rules must achieve” the objective of \n“preventing [out-of-market] resources from distorting the market clearing price.”30  Ultimately, \n \n28 Constellation Answer to PJM at 4-8.  \n29 ISO New England Inc., 138 FERC ¶ 61,027 at PP 71–72, 75. \n30 Id. at P 75."},{"page":13,"startToken":3551,"endToken":3805,"text":"13 \nand after “weighing all the interests and evidence before it,” the Commission found that “the \nappropriate course of action, which result in just and reasonable rates, is to prevent new resources \nfrom lowering the price of capacity significantly below competitive levels” by, in that case, \nimposing a mandated offer floor mitigation measure.31 \nIn ISO New England, the Commission was so concerned with the price suppressive effect \nfrom price-taker bidding in the capacity auction and the potential to “inhibit competitive \ninvestment” that it mandated offer floor mitigation.32  Here, the Order performs no comparable \nbalancing analysis of the RBP’s scale, duration, timing mismatch, or effect on entry and retention \nsignals.  \n2. \nThe Order Did Not Address the Matched Isolation Mechanism, \nWhich Was Supported by Expert Testimony \nPJM justified mandatory price-taker treatment as necessary to prevent RPM from procuring \ncapacity already secured through the RBP. Paragraph 53 accepted that rationale without adequately \nconsidering the countervailing market and long-term resource adequacy impacts of such approach \nor addressing the mechanism Constellation proposed. \nPJM suggested that RBP resources must be offered into RPM as a price-taker to ensure \nload does not “double pay” for capacity. But as Constellation explained in previous filings, the \nprice-taker requirement will undermine RPM as a credible price-forming market and resource \nadequacy will be hindered. A mandatory $0/MW-day offer is not just or reasonable, and does more \nharm than good, because it will signal excess supply if anticipated load is delayed or does not show \n \n31 Id.  \n32 Id. at P 70."},{"page":14,"startToken":3805,"endToken":4083,"text":"14 \nup.33  The resulting signal can reduce retention and entry incentives, accelerate resource exit, and \ndefer new investment in the region. Such a result recreates the very resource adequacy problems \nthat spurred the RBP in the first place. \nAs Constellation explained in its Limited Protest, these results can be avoided, and load \ncan still be protected from the double payment, if instead PJM isolates the RBP supply and \ncorresponding RBP-related demand from the RPM. By utilizing the isolation method instead of a \nprice-taker requirement, the market will not result in distorted RPM prices that signal excess \nsupply and encourage retirement of the existing fleet if anticipated load is delayed.34 \nConstellation did not propose removing RBP supply while leaving the full associated \ndemand requirement in RPM. For each applicable auction, Constellation’s proposed mechanism \nwould exclude Available RBP UCAP from the price-forming supply stack and reduce the \napplicable reliability requirement by the lesser of Available RBP UCAP and RBP-Related Load \nreflected in that auction’s Planning Parameters. The mechanism therefore prevents duplicate \nprocurement for the matched quantity by adjusting both supply and demand, while avoiding the \none-sided price-forming effect of mandatory zero offers. \nParagraph 53 of the Order claimed that the price-taker requirement was necessary, despite \n“the risk of price suppression,” in order to avoid double procurement.35  But the Order ignored Dr. \nShanker’s supporting analysis and Constellation’s recommended proposal to isolate RBP supply \nand corresponding load from RPM price formation, which would have the effect of avoiding both \nthe risk of double procurement and the risk of distorting RPM prices and the resource adequacy \n \n33 Limited Protest at 5-10.  \n34 Id. at 10-13.  \n35 Order at P 53."},{"page":15,"startToken":4083,"endToken":4396,"text":"15 \nconsequences that could bring.36  The Commission therefore acted arbitrarily and capriciously \nbecause it failed to explain why the price taker proposal is just and reasonable in order to avoid \ndouble procurement when the isolation methodology supported by Constellation’s expert witness \nwill similarly avoid double procurement while also preserving the RPM’s effectiveness for price \nformation in support of long-term resource adequacy.37 \nFinally, the Commission recently directed PJM to explain how it would transition back to \n“traditional market structures” and avoid “a long-term bifurcation of loads in the PJM market.”38  \nAlthough the IRAS Order addressed load treatment, the same concern counsels against embedding \na separate, fifteen-year class of zero-priced RBP supply in RPM. Constellation’s isolation \nmechanism would limit, rather than institutionalize, that bifurcation.  The Commission’s stated \ndesire to return to traditional market structures, as noted in the IRAS Order, is at odds with its \nacceptance of an RBP proposal that will embed out-of-market distortions in RPM auctions for the \nnext 15 years.39    \nGiven the foregoing, the Commission should grant rehearing and condition acceptance on \nthe annual isolation mechanism. At minimum, it should reconsider the issue under the correct \nrecord and provide a reasoned response to the matched supply-and-demand adjustment, the ISO-\nNE precedent, and the material distinctions between RBP and RMR arrangements. The \n \n36 Limited Protest at 6. \n37 Id. at 10-13. \n38 PJM Interconnection, L.L.C., 197 FERC ¶ 61,019, at P 111 (2026). The Commission issued the IRAS Order on \nOctober 9, 2026, after issuance of the September 29, 2026 RBP Order. Constellation identifies the IRAS Order \npursuant to Rule 713(c)(3) as intervening Commission precedent that was unavailable when the RBP Order issued. \n39 See MISO Transmission Owners v. FERC, 45 F.4th 248 (D.C. Cir. 2002) (vacating a FERC decision when the \nCommission failed to provide a reasoned explanation for its contradictory positions)."},{"page":16,"startToken":4396,"endToken":4685,"text":"16 \nCommission “did not engage in the reasoned decision-making required by the [APA]”40 to justify \nthe RBP Proposal’s price-taker requirement.  The Order failed to explain why it departed in a \nmanner that was “internally inconsistent”41 with its past ISO-NE precedent, and why it relied on \nRMR precedent to support the price-taker requirement despite its impacts on the RPM, while \nignoring the isolation methodology solution entirely.42  Such a “failure to respond meaningfully” \nto Constellation’s objections and proposed isolation methodology “renders its decision arbitrary \nand capricious.”43 \nC.\nIn an Abundance of Caution, the Commission Should Clarify the Scope of\nthe Paper Hearings\nConstellation understands the Order to leave the following matters open for development \nin the paper-hearing procedures and does not seek to short-circuit those proceedings. Because \nparagraphs 159, 181, and 206 identify potential replacement approaches without finally adopting \nthem, Constellation requests clarification that the full scope of the issues described below remains \nopen. To the extent the Order holds otherwise, Constellation seeks rehearing. \n1.\nScope of the LSE Collateral Paper Hearing\nIn its Order, the Commission found that the proposed RBP collateral requirements for LSEs \nmay be unjust and unreasonable, and set the issue for paper hearing.44 Constellation requests \nclarification that the paper-hearing inquiry into “appropriate collateral requirements for RBP \nbuyers” encompasses: (1) the size and methodology of the RBP Credit Rate; (2) gross contractual \n40 New England Power Generators Ass’n v. FERC, 881 F.3d 202, 210-11 (D.C. Cir. 2018). \n41 ANR Storage Co. v. FERC, 904 F.3d 1020, 1024 (D.C. Cir. 2018). \n42 PSEG Energy Res. & Trade LLC v. FERC, 665 F.3d 203, 208 (D.C. Cir. 2011). \n43 Id.  \n44 Order at PP 190, 194, 196, 204–206."},{"page":17,"startToken":4685,"endToken":4983,"text":"17 \nvalue versus reasonably foreseeable net payment exposure; (3) recognition of existing collateral, \nguarantees, and other credit support to prevent overlapping collateralization of the same exposure; \n(4) direct customer or affiliate posting for the responsible LSE’s account; (5) LSE and guarantor\ncredit quality; (6) objective recalculation, reduction, and release standards; and (7) the time \nafforded to arrange collateral. To the extent the Order intended to exclude or reject any of those \nmatters, rehearing is warranted.45 \n2.\nScope of the Transmission Owner Exit Rules Paper Hearing\nIn its Order, the Commission found that the proposed RBP Transmission Owner exit rules \nmay be unjust and unreasonable, and set the issue for paper hearing.  Constellation seeks \nclarification that the Order neither established a presumption that LSEs in an exiting Transmission \nOwner’s zone must bear RBP exit charges nor predetermined the allocation of such charges. To \nthe extent the Order intended otherwise, the Commission acted arbitrarily and capriciously and \nrehearing is warranted. \nThe fact that an LSE may have benefited from the original RBP procurement does not \nestablish that it caused every incremental cost arising from a Transmission Owner’s later \nwithdrawal. The Transmission Owner controls the withdrawal decision; the affected LSEs \ngenerally cannot prevent, predict, or hedge that event. An exiting Transmission Owner should bear \nits appropriate cost burden of generation and load investments made under the assumption that the \nTransmission Owner would remain in PJM.46 At minimum, costs attributable to the withdrawal \ndecision should not be shifted automatically to LSEs merely because those LSEs benefited from \n45  PJM Interconnection, L.L.C., 186 FERC ¶ 61,055 at P 29 (2024). \n46 K N Energy, Inc. v. FERC, 968 F.2d 1295, 1300 (D.C. Cir. 1992); Illinois Commerce Commission v. FERC, 576 \nF.3d 470, 477 (7th Cir. 2009)."},{"page":18,"startToken":4983,"endToken":5255,"text":"18 \nthe original RBP procurement. Shifting all exit-related consequences to LSEs could reduce the \nwithdrawing entity’s incentive to internalize the costs caused by its decision and impose a \ncontingent liability lasting through 2042/2043 on entities that did not control the triggering event. \nIn addition, the paper hearing should distinguish ordinary RBP Charges attributable to load that \ndeparts PJM from incremental costs created by the Transmission Owner’s withdrawal, including \npseudo-tie, accelerated-payment, contract-preservation, and stranded-obligation costs. \nIn its Order, the Commission noted that it has previously found that it is just and reasonable \nto impose generation capacity costs on LSEs located within an exiting Transmission Owner’s zone, \nciting to Duquesne. 47   However, Duquesne does not resolve the problem here. It addressed a \nwithdrawing entity’s capacity obligations in its role as an LSE for capacity PJM had procured on \nits behalf.48 It did not hold that non-withdrawing LSEs must bear incremental costs caused by a \nseparate Transmission Owner’s exit. Constellation therefore requests clarification that the paper \nhearing remains open to all allocation approaches and that any replacement rate must separately \nidentify the relevant cost, cause, and beneficiary. To the extent paragraph 181 intended to prejudge \nLSE responsibility, rehearing is warranted. \n3.\nScope of Cost Allocation Paper Hearing\nThe Order correctly found that reliance on PJM’s Load Adjustment process may fail to \ncapture actual or forecast large-load growth and therefore may produce allocations not roughly \ncommensurate with benefits.49 It then suggested that PJM could use actual 2026/2027 load and the \n47 Duquesne Light Co., 122 FERC ¶ 61,039 (2008). \n48 Id. at PP 83, 89–94. \n49 Order at PP 153–155."},{"page":19,"startToken":5255,"endToken":5518,"text":"19 \nmost recent 2028/2029 forecast.50  The Commission should clarify that Paragraphs 159–160 of the \nOrder identify a possible approach; they do not establish a lawful replacement rate.51 \nAny replacement methodology must use current, project-specific, PJM-validated and \nauditable information; identify and eliminate double counting associated with duplicate or \nalternative-site requests; reasonably validate energization dates and ramp assumptions; account for \nwithdrawals, delays, and reductions; and identify load already embedded in the base forecast. The \nforecast used to establish the procurement target and the data used to allocate costs must be \nconsistent or expressly reconciled. \nIf PJM submits a new section 205 filing, it bears the burden of demonstrating that its \nproposed allocation is just and reasonable. If the Commission establishes a replacement rate under \nsection 206, it must support both its determination that the filed methodology is unlawful and its \nselection of the replacement.  \n \nCONCLUSION \nFor the foregoing reasons, the Commission should: \n1. \nGrant rehearing of paragraph 51 and direct PJM to revise the Tariff to permit an existing \nEnergy Resource with no current CIRs or capacity commitment to qualify as an RBP Resource \nand be eligible to provide Qualifying RBP Offset UCAP MW if it obtains new CIRs through an \nInterconnection Request, provides new deliverable capacity not previously available to PJM, and \nsatisfies the applicable interconnection, deliverability, accreditation, commercial-operation, and \nperformance requirements; \n2. \nGrant rehearing of paragraph 53 as discussed above and condition acceptance of PJM’s \nproposal on Constellation’s annual isolation mechanism; \n \n50 Id. at P 159. \n51 Emera Maine, 854 F.3d 9, 24–27 (D.C. Cir. 2017)."},{"page":20,"startToken":5518,"endToken":5748,"text":"20 \n3. \nClarify that the collateral paper hearing encompasses all issues identified in Section III.C.1; \n4. \nClarify that paragraphs 181–182 establish no presumption that LSEs must bear \nTransmission Owner exit charges and that incremental exit-caused costs require a separate cost-\ncausation analysis; and \n5. \nClarify that paragraphs 153–160 do not prejudge the replacement cost-allocation \nmethodology and that any replacement methodology must use accurate, up-to-date load forecast \ninformation and satisfy the applicable FPA sections 205 and 206 burdens. \nTo the extent the Order intended to exclude or decide any of the matters addressed in paragraphs \n3 through 5 above, the Commission should grant rehearing. \nRespectfully submitted, \n \nDated: October 29, 2026 \n \n/s/ \nCarrie Hill Allen \nSr. Vice President & Deputy General Counsel \nJohn M. White \nAssistant General Counsel \nConstellation Energy Generation, LLC \n250 Massachusetts Ave. NW, Suite 760 \nWashington, D.C. 20001 \ncarrie.allen@constellation.com \njohn.white@constellation.com \n \nChristopher A. Wilson \nVice President, Federal Regulatory Affairs \nConstellation Energy Generation, LLC \n250 Massachusetts Ave. NW, Suite 760 \nWashington, D.C. 20001 \n202-347-7500 \nFERCe-filings1@constellation.com \nKenneth W. Irvin \nAlexandra K. Calabro \nSidley Austin LLP \n1501 K Street, N.W. \nWashington, DC 20005 \nPhone: (202) 736-8256 \nkirvin@sidley.com \nalexandra.calabro@sidley.com \n \nTerence T. Healey \nSidley Austin LLP \n60 State Street, 37th Floor \nBoston, MA 02109 \nPhone: (617) 223-0306 \nthealey@sidley.com \n \nCounsel for Constellation Energy Generation, LLC"},{"page":21,"startToken":5748,"endToken":5805,"text":"CERTIFICATE OF SERVICE \nI hereby certify that I have this day served the foregoing document upon each person \ndesignated on the official service list compiled by the Secretary in this proceeding. \nDated at Washington, D.C. this 29 day of October 2026. \n/s/ \nAlexandra K. Calabro  \nSidley Austin LLP \n1501 K Street, N.W. \nWashington, DC 20005"}],"sections":[{"p":1,"at":0,"title":"Opening text","method":"opening text","endPage":1,"endAt":658,"startToken":0,"endToken":85},{"p":1,"at":658,"title":"BACKGROUND","method":"printed heading","endPage":7,"endAt":46,"startToken":85,"endToken":1673},{"p":7,"at":46,"title":"A. The Commission Erred in Rejecting Constellation’s Proposed Eligibility Revisions for RBP Resources and Resources Eligible to Supply Qualifying RBP Offset UCAP MW","method":"PDF bookmark","endPage":7,"endAt":1021,"startToken":1673,"endToken":1823},{"p":7,"at":1021,"title":"(i) Composed of new Installed Capacity and new Maximum Facility Output;","method":"PDF bookmark","endPage":7,"endAt":1096,"startToken":1823,"endToken":1834},{"p":7,"at":1096,"title":"(ii) Supported by new Capacity Interconnection Rights (if located in the PJM Region) or Capacity Interconnection Rights transferred from a deactivated resource or a resource that announced deactivation as of April 10, 2026; and","method":"PDF bookmark","endPage":11,"endAt":4,"startToken":1834,"endToken":2922},{"p":11,"at":4,"title":"B. The Commission Did Not Justify Mandatory Price-Taker Treatment","method":"PDF bookmark","endPage":11,"endAt":72,"startToken":2922,"endToken":2931},{"p":11,"at":72,"title":"1. The Commission Failed to Engage in a Reasoned Balancing Analysis","method":"PDF bookmark","endPage":13,"endAt":737,"startToken":2931,"endToken":3662},{"p":13,"at":737,"title":"2. The Order Did Not Address the Matched Isolation Mechanism, Which Was Supported by Expert Testimony","method":"PDF bookmark","endPage":16,"endAt":602,"startToken":3662,"endToken":4484},{"p":16,"at":602,"title":"C. In an Abundance of Caution, the Commission Should Clarify the Scope of the Paper Hearings","method":"PDF bookmark","endPage":16,"endAt":1157,"startToken":4484,"endToken":4562},{"p":16,"at":1157,"title":"1. Scope of the LSE Collateral Paper Hearing","method":"PDF bookmark","endPage":17,"endAt":535,"startToken":4562,"endToken":4761},{"p":17,"at":535,"title":"2. Scope of the Transmission Owner Exit Rules Paper Hearing","method":"PDF bookmark","endPage":18,"endAt":1401,"startToken":4761,"endToken":5182},{"p":18,"at":1401,"title":"3. Scope of Cost Allocation Paper Hearing","method":"PDF bookmark","endPage":19,"endAt":1018,"startToken":5182,"endToken":5401},{"p":19,"at":1018,"title":"CONCLUSION","method":"printed heading","endPage":21,"endAt":0,"startToken":5401,"endToken":5748},{"p":21,"at":0,"title":"CERTIFICATE OF SERVICE","method":"printed heading","endPage":21,"endAt":341,"startToken":5748,"endToken":5805}]}