ER26-3380-001 · 2026-10-29 · Ohio Consumers' Counsel

Request for Rehearing to Protect Consumers from Excessive Transmission Rates by Office of the Ohio Consumers' Counsel

UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
PJM Interconnection, L.L.C.   
) 
Docket Nos. ER26-3380-000 and 
)            
         ER26-3380-001 
REQUEST FOR REHEARING 
TO PROTECT CONSUMERS FROM EXCESSIVE TRANSMISSION RATES 
BY 
OFFICE OF THE OHIO CONSUMERS’ COUNSEL 
Maureen Willis 
Consumers’ Counsel 
Angela O/Brien 
Deputy Consumers’ Counsel 
Office of the Ohio Consumers’ Counsel 
65 East State Street, Suite 700 
Columbus, Ohio 43215 
Telephone: (614) 466-9531 
angela.obrien@occ.ohio.gov
Denise C. Goulet, Esq. 
McCarter & English, LLP 
1301 K Street, N.W., Suite 1000 West 
Washington, D.C. 20005 
(202) 753-3400 
dgoulet@mccarter.com
Special Counsel to the Ohio Office of the 
Attorney General for the  
Office of the Ohio Consumers’ Counsel 
October 29, 2026

Table of Contents
I.
INTRODUCTION............................................................................................................. 1
II.
BACKGROUND ............................................................................................................... 3
III.
SPECIFICATIONS OF ERRORS ON REHEARING .................................................. 4
IV.
LIST OF ISSUES ON REHEARING ............................................................................. 5
V.
REQUEST FOR REHEARING ...................................................................................... 8
A.
FERC’s approval of the $555/MW-day seller offer cap and the 
pay-as-bid clearing mechanism design for the RBP auction fails the 
test for reasoned decision-making because these decisions are not 
supported by the evidence and do not provide adequate protections 
for consumers against seller market power. ................................................................... 8
B.
FERC’s approval of the pay-as-bid clearing price mechanism 
for the RBP auction is an unexplained and unreasoned departure 
from long-held FERC precedent. .................................................................................. 13
C.
FERC’s approval of the 20% shortage penalty for the RBP 
auction fails the test for reasoned decision-making because it is 
disproportionate to the risk consumers will incur if large load data 
centers do not materialize, and it is allocated to consumers who did 
not cause the circumstances leading to the incurrence of the penalty. ...................... 16
D. 
FERC’s approval of the RBP auction structure violates long-
held judicial precedent requiring that costs be allocated to those 
causing the costs to be incurred or to those benefitting from them.  It 
also does not protect consumers from the unjust and unreasonable 
results of RPM auctions held in the past three years that cleared short 
because of large data center load demands. ................................................................. 19
VI.
CONCLUSION AND PRAYER FOR RELIEF ........................................................... 22

1 
UNITED STATES OF AMERICA 
BEFORE THE 
FEDERAL ENERGY REGULATORY COMMISSION 
PJM Interconnection, L.L.C.   
) 
Docket Nos. ER26-3380-000 and 
)            
         ER26-3380-001  
REQUEST FOR REHEARING 
TO PROTECT CONSUMERS FROM EXCESSIVE TRANSMISSION RATES 
BY 
OFFICE OF THE OHIO CONSUMERS’ COUNSEL 
I. 
INTRODUCTION 
The Federal Energy Regulatory Commission’s (“FERC”) September 29, 2026 Orders1 in 
this case fail to protect consumers in Ohio and elsewhere in PJM Interconnection, L.L.C. 
(“PJM”) from the risks and costs that will result from general acceptance of PJM’s Reliability 
Backstop Procurement (“RBP”) proposal in these dockets. That order allows PJM to implement a 
one-time capacity auction, with “billion-dollar implications for consumers,”2 to procure 
generating capacity needed to serve forecasted load associated with large data centers and the 
resulting resource adequacy shortfall in the 2028/2029 Delivery Year capacity auction.   
But the RBP auction design subjects consumers who are not causing the need for the 
auction to shoulder the significant risk of paying for those costs, especially if the forecasted loads 
do not materialize. FERC’s acceptance of this proposal is inconsistent with the stated 
understandings of several of the commissioners in their concurring opinions.  For example, 
Commissioner David A. LaCerte states in his concurrence that the “Reliability Backstop 
1 PJM Interconnection, L.L.C., 196 FERC ¶ 61,245 (2026) (“September 29 Order”).  
2 Id., Chairman Laura V. Swett concurring at P 2.

2 
Procurement is designed to make sure the costs of the large load at issue here are appropriately 
allocated to that load and not to other consumers”3 Similarly, Commissioner Lindsay S. See 
stated in her concurrence that: 
“customers that drive new costs should bear appropriate responsibility for 
them. Existing customers should not be left paying costs attributable to new 
demand. That principle is particularly important here where PJM proposes a 
backstop procurement specifically to deal with the capacity shortfall that 
rapid load growth largely drove.”4
The approved RBP auction design does not comport with these understandings.  Moreover, the 
FERC-accepted auction design does not contain sufficient and critically needed consumer 
protections against the exercise of market power. Pursuant to Section 313 of the Federal Power 
Act (“FPA”), 16 U.S.C. § 825l, and Rule 713 of the FERC’s Rules of Practice and Procedure, 18 
C.F.R. § 385.713, the Office of the Ohio Consumers’ Counsel (“OCC”) hereby requests 
rehearing of the September 29 Orders.   
OCC is the statutory representative of millions of Ohio residential utility consumers, per 
R.C. Chapter 4911. OCC actively advocates for Ohioans in numerous state and federal 
regulatory proceedings, including proceedings before FERC. OCC timely intervened in this case 
on August 14, 2026,5 and submitted a Protest of the filing on August 21, 2026.6  Ohio residential 
consumers are adversely affected by FERC’s September 29 Order in this case because they are at 
risk of paying the costs for the capacity to be acquired by the auction even though they did not 
cause that capacity to be procured.  They are also at risk of paying an excessive capacity clearing 
3 Id., Commissioner LaCerte concurring at P 1.   
4 Id., Commissioner See concurring at P 2.  
5 Doc-less Motion to Intervene in PJM Interconnection, L.L.C., Docket No. ER26-3380-000, filed by Office of the 
Ohio Consumers’ Counsel, available on FERC’s e-library website as Accession Document No. 20260814-5066. 
6 Protest and Request for Rejection of Filing, or in the Alternative, for Evidentiary Hearings and/or Settlement 
Proceedings by Office of the Ohio Consumers’ Counsel (Aug. 21, 2026), Docket No. ER26-3380-000, available on 
FERC’s e-Library website as Accessions Document No. 20260821-5281 (“OCC Protest”).

3 
price for that auction because the auction design does not contain crucially needed seller market 
power mitigation measures. 
II. 
BACKGROUND 
FERC generally accepted (subject to refund and paper hearing) PJM’s proposal to 
establish the RBP, a one-time auction to procure 6,831 MW of new generating capacity and cure 
the capacity shortage that occurred in the Reliability Pricing Model (“RPM”) capacity base 
residual auction for the 2028/2029 Delivery Year.7 Although the September 29 Order generally 
accepted the RBP proposal subject to refund and paper hearing, it postponed that auction for five 
months, until February 28, 2027.8 This delay appears intended to give PJM time to modify the 
proposal to correct certain deficiencies identified by FERC in the Order.9
The overall RBP auction design accepted in the September 29 Order (subject to refund 
and paper hearing) requires all loads in the transmission zones affected by the capacity shortages 
from the 2028/2029 Delivery Year RPM auction to participate in the RBP auction.10 FERC’s 
ruling accepts (a) the must-offer requirement for capacity sellers;11 (b) the $555/MW-day market 
seller offer cap;12 (c) the pay-as-bid auction clearing mechanism proposal;13 (d) the shortage 
penalty of 20% of the seller’s cleared bid times the shortage amount;14 (e) the lack of a locational 
7 September 29 Order at P 1. 
8 Id.
9 Id. at PP 2-3.   
10 Id. at PP 12, 16.   
11 Id. at P 53.   
12 Id. at P 74.   
13 Id. at P 75.   
14 Id. at P 84.

4 
requirement for new generation;15 and the opt-out provision for Fixed Resource Requirement 
entities.16
FERC found that the following elements of the RBP proposal may be unjust and 
unreasonable, and set these issues for further paper hearings and additional comments:  (a) 
allocation of costs to Electric Distributor zones and then among Load Serving Entities (“LSEs”) 
located in those zones using a snapshot-in-time approach that does not make adjustments for 
changes in load over time;17 (b) the proposal to allow municipal and cooperative utilities to opt 
out of allocated shares of the cost of capacity acquired through the RBP auction;18 (c) the 
proposed rules for exit fees associated with a Transmission Owner leaving PJM that would 
allocate the exit fees to Transmission Owners rather than LSEs;19 and (d) the LSE collateral 
requirements.20 The September 29 Order also establishes a process for the paper hearing, but 
states that FERC might be willing to delay that paper hearing process if PJM submits a filing 
within 30 days of the date of the order to correct the deficiencies identified above.21
III. 
SPECIFICATIONS OF ERRORS ON REHEARING 
1. 
FERC erred by acting in an arbitrary and capricious manner in approving the 
excessive $555/MW-day market seller offer cap and the pay-as-bid clearing mechanism design 
for the RBP auctions.  There is no evidence in the record to support this offer cap, and there is no 
evidence to support the pay-as-bid clearing mechanism design.  The excessive cap and pay-as-
15 Id. at P 97.   
16 Id.at P 151. 
17 Id. at PP 154-156.   
18 Id. at P 152.   
19 Id. at PP 178-179.   
20 Id. at PP 204-205.  
21 Id. at PP 2-3, 24.

5 
bid design will neither mitigate market power of sellers in the auction nor protect consumers in 
Ohio and elsewhere in PJM from paying excessive, unjust and unreasonable capacity prices. 
2. 
FERC erred in approving the pay-as-bid clearing mechanism design in the RBP 
because this ruling departs from long-held precedent regarding the need for a single clearing 
price auction structure in capacity auctions to mitigate seller market power. 
3.  
FERC erred by acting in an arbitrary and capricious manner in approving the 
proposed insufficient shortage penalty.  That penalty is significantly less stringent than warranted 
given the high risk associated with purchasing generating capacity through the RBP auction well 
in advance of the forecasted new large data center loads materializing on the system.  This ruling 
is also inconsistent with FERC precedent establishing more stringent penalties for RPM capacity 
resource non-performance, and inconsistent with judicial precedent requiring FERC to address 
the critical issues raised before it. 
4. 
FERC erred by acting in an arbitrary and capricious manner in approving an RBP 
auction design that does not allocate the costs of the auction to the large load data centers 
causing the need for the auction and thus placing residential consumers in Ohio and elsewhere in 
PJM that did not cause these costs to be incurred at risk of paying these costs. 
IV. 
LIST OF ISSUES ON REHEARING 
1. 
Whether FERC’s approval of the $555/MW-day seller offer cap for the RBP 
auctions and the pay-as-bid clearing mechanism design are contrary to the Administrative 
Procedure Act’s “arbitrary and capricious” standard, 5 U.S.C. § 706(2)(A), Sithe/Indep. Power 
Partners, L.P. v. FERC, 165 F.3d 944, 948 (D.C. Cir. 1999) (“Sithe/Indep. Power Partners”); 
FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760, 782 (2016) (“EPSA”) (quoting Motor Vehicle 
Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)); and Neighborhood TV 
Co. v. FCC, 742 F.2d 629, 639 (D.C. Cir. 1984) (“Neighborhood TV Co.”) (the court must be

6 
able to “discern a reasoned path from the facts and considerations before the [agency] to the 
decision it reached”) because the excessive offer cap in conjunction with the pay-as-bid clearing 
mechanism will not sufficiently constrain market power in the RBP auction?  
2. 
Whether FERC’s approval of the pay-as-bid clearing mechanism in the RBP 
proposal is arbitrary and capricious in violation of the Administrative Procedure Act’s “arbitrary 
and capricious” standard, 5 U.S.C. § 706(2)(A), Sithe/Indep. Power Partners, L.P. v. FERC, 165 
F.3d 944, 948 (D.C. Cir. 1999) (“Sithe/Indep. Power Partners”); FERC v. Elec. Power Supply 
Ass’n, 136 S. Ct. 760, 782 (2016) (“EPSA”) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm 
Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)); and Neighborhood TV Co. v. FCC, 742 F.2d 629, 
639 (D.C. Cir. 1984) (“Neighborhood TV Co.”) (the court must be able to “discern a reasoned 
path from the facts and considerations before the [agency] to the decision it reached.”) because 
that auction clearing mechanism design is an unwarranted and unexplained departure from 
precedent, contrary to the requirements of Williams Gas Processing-Gulf Coast Co. v. FERC, 
475 F.3d 319, 326 (D.C. Cir. 2006) (“Williams Gas Processing”) (citing Brusco Tug & Barge 
Co. v. NLRB, 247 F.3d 273, 278 (D.C. Cir. 2001) (“[I]t is ‘axiomatic that [agency action] must 
either be consistent with prior [action] or offer a reasoned basis for its departure from 
precedent’”)? 
3. 
Whether FERC’s approval of the shortage penalty proposal is arbitrary and 
capricious in violation of the Administrative Procedure Act’s “arbitrary and capricious” standard, 
5 U.S.C. § 706(2)(A), Sithe/Indep. Power Partners, L.P. v. FERC, 165 F.3d 944, 948 (D.C. Cir. 
1999) (“Sithe/Indep. Power Partners”), FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760, 782 
(2016) (“EPSA”) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 
29, 43 (1983)); and Neighborhood TV Co. v. FCC, 742 F.2d 629, 639 (D.C. Cir. 1984)

7 
(“Neighborhood TV Co.”) (the court must be able to “discern a reasoned path from the facts and 
considerations before the [agency] to the decision it reached.”) because the penalty is 
disproportionate to the risk that residential consumers will bear if the large data center loads do 
not materialize, is allocated to loads that did not cause the circumstances leading to the 
imposition of the penalty, is inconsistent with judicial precedent requiring FERC to address the 
critical issues raised before it, and is inconsistent with FERC precedent establishing more 
stringent penalties for RPM capacity resource non-performance, contrary to the requirements of 
Williams Gas Processing-Gulf Coast Co. v. FERC, 475 F.3d 319, 326 (D.C. Cir. 2006) 
(“Williams Gas Processing”) (citing Brusco Tug & Barge Co. v. NLRB, 247 F.3d 273, 278 (D.C. 
Cir. 2001)? 
 
4. 
Whether FERC’s failure to allocate the RBP costs that will be incurred to serve 
large data center loads to those loads is arbitrary and capricious in violation of the 
Administrative Procedure Act’s “arbitrary and capricious” standard, 5 U.S.C. § 706(2)(A), 
Sithe/Indep. Power Partners, L.P. v. FERC, 165 F.3d 944, 948 (D.C. Cir. 1999) (“Sithe/Indep. 
Power Partners”), FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760, 782 (2016) (“EPSA”) 
(quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)), 
and Neighborhood TV Co. v. FCC, 742 F.2d 629, 639 (D.C. Cir. 1984) (“Neighborhood TV Co.”) 
(the court must be able to “discern a reasoned path from the facts and considerations before the 
[agency] to the decision it reached.”) because it violates long-held judicial principles that require 
allocation of costs to those causing the costs to be incurred or benefiting from the projects?

8 
V. 
REQUEST FOR REHEARING 
A. 
FERC’s approval of the $555/MW-day seller offer cap and the pay-as-bid clearing 
mechanism design for the RBP auction fails the test for reasoned decision-making 
because these decisions are not supported by the evidence and do not provide 
adequate protections for consumers against seller market power.     
FERC failed to provide a reasoned explanation for its acceptance of the $555/MW-day 
proposed market seller offer cap and the pay-as-bid clearing mechanism for the RBP auction 
design.  This design will not protect consumers in Ohio or elsewhere in PJM from the exercise of 
seller market power.  In his Protest to the filing, the Independent Market Monitor for PJM 
(“IMM”) demonstrates the critical flaw in PJM’s proposal, i.e., that PJM explicitly decided 
not to use “market power screening or mitigation measures” in the design of the auction 
parameters.22 As the IMM argues, “[i]t should be unacceptable that PJM, at a time of severe 
supply shortage, would propose to not use the standard market power screening that is used 
in all PJM capacity auctions.”23 This is especially concerning given that the overall market 
design is premised on  an excessive seller offer cap and a pay-as-bid clearing mechanism, 
neither of which will constrain seller market power in an auction where scarcity is a known 
condition.  
The September 29 Order’s primary reasoning for the offer cap amount is that the 
$555/MW-day represents the “maximum willingness to pay and process for selecting RBP 
resources in the RBP auction.”24 But the order points to no evidence justifying that $555/MW-
day is the maximum willingness to pay in the RBP auction. Instead, FERC states that “PJM 
22 Protest of the Independent Market Montior for PJM at 12 (citing RBP Application at 32), Docket No. ER26-3380-
000, available on the FERC e-library website as Accession Document No. 20260821-5317 (“IMM  Protest”).   
23 Id.
24 September 29 Order at P 74.

9 
needs to expeditiously cure the capacity shortage and a high price cap will encourage new 
entrants.”25
FERC also notes that “in establishing the value for the maximum willingness to pay in the 
RBP, PJM reasonably relied on the value of the RPM price cap that the Commission accepted in 
January and reaffirmed in July” in the RPM quadrennial review of the RPM auction 
parameters.”26 But that too fails to explain why the $555/MW-day cap is appropriate for an 
auction with known scarcity conditions and no market power mitigation provisions. 
 In the RPM quadrennial review proceeding that established $555/MW-day as the upper 
bound for procuring capacity in RPM base residual auctions, there are other established measures 
in place to mitigate seller market power. As the IMM demonstrates in his Protest, those seller 
market power mitigation measures will not exist in the RBP auction.  Neither PJM nor FERC 
explain why they assume load has a maximum willingness to pay $555/MW-day for capacity to be 
procured in the RBP auction where scarcity is highly likely given that the 2028/2029 auction 
cleared short by over 6,800 MW.  PJM argued in the RBP Application27 that its proposed 
“maximum willingness-to-pay cap” will provide “a direct limit on procurement costs even in 
the absence of offer mitigation,”28 claiming that “competitive dynamics are expected to 
encourage suppliers to submit competitive offers that more closely reflect their willingness to 
provide service.”29 But there is no evidence that competitive dynamics are likely to exist in 
25 Id.
26 Id.
27 Reliability Backstop Procurement to Address Resource Adequacy Concerns Stemming from Large Loads (Jul. 31, 
2026), filed by PJM Interconnection, L.L.C. in Docket No. ER26-338-000 (“RBP Application”), available on 
FERC’s e-library website at Accession Document No. 20260731-5214.   
28 RBP Application at 68.   
29 Id. at 69.

10 
the RBP auction. FERC acknowledges that the pay-as-bid nature of the RBP auction is a 
“theoretical drawback” to ensuring competitive outcomes, but dismisses this flaw, stating that 
this “is acceptable in the context of the proposed $555/MW-day average-price cap and the 
Charles River Associates Survey Results indicating strong seller interest in the RBP auction.”30
It is mere speculation that new capacity will show up in the RBP auction in sufficient 
quantities to mitigate the known scarcity from the 2028/2029 RPM auction.  
Regardless of the Study results, neither FERC nor PJM explain how the offer cap 
will mitigate seller market power when structural market power has long been endemic to 
the PJM capacity auctions. The IMM has consistently reported that “[s]tructural market power 
is endemic to the capacity market.” 31  In the 2026 State of the Market Report, the IMM states 
that “[i]n a good market design and a competitive market structure, market participants are 
constrained to behave competitively,” but that “[i]n a market with endemic structural market 
power like the PJM Capacity Market, effective market power mitigation rules are required in 
order to constrain market participants to behave competitively.”32 Suppliers know they will be 
paid their offer price given the pay-as-bid RBP auction design, but there are no rules to 
mitigate structural seller market power in that auction. 
The $555/MW-day offer cap FERC accepted in the September 29 Order is more than 
$200/MW-day higher than the current collared price cap applied in the 2028/2029 RPM base 
residual auction.  And while it may make sense that something higher than the cap in the 
2028/2029 auction is needed to cure the capacity shortage stemming from that auction, there is no 
30 September 29 Order at P 75.   
31 2026 State of the Markets Report, Section 5 Capacity Market at 382, 390, prepared by the Independent Market 
Monitor for PJM (“2026 State of the Market Report”), available on the internet at 
https://www.monitoringanalytics.com/reports/PJM_State_of_the_Market/2026/2026q2-som-pjm-sec5.pdf. 
32 2026 State of the Market Report at 390.

11 
justification for why $555/MW-day is the right price point for preventing seller market power in an 
auction with known endemic market power, a known shortage to be procured, and a known lack of 
market power mitigation measures.  The fact that the accepted auction design will pay each seller 
whose offer clears the auction its offer bid price for a period of up to 15 years only encourages 
rather than discourages offers above competitive levels.  While one might argue that a cap above 
the clearing price in the last short auction might be needed to encourage new entry, neither PJM 
nor FERC explain why $555/MW-day is the right number. 
The obvious goal of a seller offer cap is to mitigate seller market power in the RPM 
auctions. FERC has routinely used market seller offer caps in conjunction with an auction 
structure that encourages new entrants to bid their marginal cost of new supply into the 
auctions.33 FERC found that “a competitive market with a single, market-clearing price creates 
incentives for sellers to minimize their costs, because cost-reductions increase a seller’s 
profits.”34 FERC further explained that “when many sellers work to minimize their costs, 
competition among them keeps prices as low as possible.”35 FERC continued, reasoning that 
“[w]hile an efficient seller may, at times, receive revenues that are above its average total costs, 
the revenues to an inefficient seller may be below its average total costs and it may be driven out 
of business,” and “[t]his market result benefits customers, because over time it results in an 
industry with more efficient sellers and lower prices.”36 In Commonwealth Edison Co. FERC 
explained that “under this model, the generator has the proper incentive to bid the lowest price 
33 PJM Interconnection, L.L.C., 117 FERC ¶ 61,331 at P 141 (2006). 
34 Id.
35 Id.
36 Id.

12 
that covers its marginal cost, knowing that if the market produces a higher price it will receive 
the market price.”37
PJM argued that a single clearing price is inappropriate for the RBP auction design because 
that approach would “transfer inframarginal rents to every seller priced below the most expensive 
accepted offer.”38 But that concern simply demonstrates the unjustness and unreasonableness of the 
excessive offer cap rather than supports a departure from long-held precedent.  It is also 
inconsistent with FERC’s long-held rulings related to the use of a single clearing price auction 
structure for PJM capacity markets.    
FERC does not explain why the goal of RPM, which is to encourage bids reflecting 
marginal costs (which addresses market power concerns), is not also needed for the RBP 
auction.  FERC states only that it recognizes the flaw in pay-as-bid because it does not encourage 
marginal cost based bids, but shrugs off that flaw with the argument that the excessive offer cap 
and a study indicating strong interest in RBP auction will cure the problem.39  FERC would not 
need an excessive offer cap if it was not departing from precedent with the pay-as-bid approach.  
It appears that FERC’s hope is that new or more sellers will show up for an auction to be run just 
a few months after the 2028/2029 Delivery Year RPM auction which cleared short by more than 
6,800 MW.  This hope is mere speculation, poses a significant risk of high clearing prices for 
consumers, and does not satisfy the judicial  requirement for reasoned decision-making. 
Instead of developing a market design consistent with sound economic and FERC policy, 
the IMM notes that “PJM’s [RBP] proposals abandon single clearing price logic.”40 As the IMM 
37 Commonwealth Edison Co., 113 FERC ¶ 61,278 at P 43 (2005), citing to New York Independent System Operator, 
Inc., order on reh'g, 110 FERC ¶ 61,244 at P 65 n. 76 (2005). 
38 RBP Application at 66. 
39 September 29 Order at P 75. 
40 2026 State of the Market Report at 382.

13 
explains, “[b]y proposing a pay as bid auction design with no market power screening, RBP 
market sellers have a strong incentive to offer above their costs.”41 There is nothing in that 
structure that will prevent sellers from just bidding at the $555/MW-day offer cap regardless of 
the sellers’ actual marginal costs. The high offer cap will do nothing to curb seller incentives to 
bid above their marginal costs.     
The RBP auction design does not replicate how sellers in competitive markets would bid.  
FERC should reconsider its approval of the $555/MW-day offer cap and the pay-as-bid clearing 
price auction design because these components of the RBP are unsupported by the evidence and 
fail to mitigate seller market power. The September 29 Order fails to explain how the excessive 
offer cap in conjunction with a pay-as-bid clearing price design will mitigate seller market power 
in the wake of known structural market power that is endemic to the capacity markets, known 
capacity shortages in recent auctions, and a lack of market power mitigation measures.  
B. 
FERC’s approval of the pay-as-bid clearing price mechanism for the RBP auction is 
an unexplained and unreasoned departure from long-held FERC precedent. 
FERC also failed to provide a reasoned explanation for its departure from its long-held 
policy of requiring a single clearing price auction design for capacity markets. The September 29 
Order attempts to distinguish between the RPM capacity auction design and that approved for 
RBP by arguing that pay-as-bid is appropriate when the product to be procured is not uniform.42
But the product to be procured in RBP is just as uniform as it is in the RPM auctions.  In the 
three-year forward RPM auctions, new capacity participating in the auctions can consist of both 
existing and planned generation, as well as demand response resources.43 Similarly, the RBP 
41 IMM Protest at 12. 
42 September 29 Order at P 75. 
43 Reliability Resource Agreement Among Load Serving Entities in PJM, Article I, Definitions, Capacity Resources; 
see  also PJM Tariff, Attachment DD, section 5.5A(a).

14 
auction design approved by FERC allows both existing and planned generating resources and 
demand response resources to participate, subject to certain limitations.44 RBP sellers’ capacity 
must never have cleared an RPM auction and must have an expected in service date of June 1, 
2032.45 While that date is a limitation on sellers that can bid into RBP, the three-year ahead RPM 
capacity auctions have a similar start date limitation in that the planned capacity being bid into 
the RPM auction must have an in-service date of three years, i.e., by the time the Delivery Year 
commences.   
FERC appears to focus on the fact that RBP resources will provide a 15-year 
commitment to remain in the market.46  RPM resources have no similar commitment. But that 
difference does not mean that the RBP auction design does not seek to procure a uniform 
product. The fact remains that bidders into both the RBP and RPM auctions must be available 
within the period defined in the respective rules.  And while RPM sellers do not have to make 
more than a one-year commitment to the market, they nevertheless must offer their capacity into 
subsequent auctions unless they satisfy one of four very limited criteria for an exception.47 In 
other words, they too have restrictions mandating their participation in the PJM capacity auctions 
year-after-year unless they qualify for one of four limited exceptions.  That obligation makes 
their resources similar to the resources subject to the 15-year participation commitment in the 
RBP rules.   
The September 29 Order provides no clear explanation for how FERC decided that RPM 
procures a uniform product while RBP does not. FERC describes the uniform product as 
44 PJM RBP Application at 36, 51.   
45 Id., see also September 29 Order at P 32.  
46 September 29 Order at 32.   
47 PJM Tariff, Attachment DD, section 6.6(a) and (g).

15 
capacity that “may differ based on commercial operation dates and other factors.”48 But there are 
limits on commercial operation dates in both the RBP and RPM auctions, as discussed above.  
The evidence does not support FERC’s findings.  In neither the RBP nor the RPM auction design 
is the product to be procured “uniform” as FERC describes that word in the September 29 
Order.   
The approved RBP pay-as-bid auction design dramatically departs from FERC’s prior 
preference for a single auction clearing price structure in order to ensure that market outcomes 
are consistent with competitive market conditions. This is inconsistent with Commissioner 
LaCerte’s guidance in his concurrence, directing that PJM, in preparing a revised filing, should 
“not deviate from the principles of ratepayer protection.”49 Commissioner David Rosner likewise 
directed that PJM and its stakeholders must return to market fundamentals so that “[l]oad and 
supply should have strong incentives to hedge, manage their risks, and procure the capacity they 
rely upon.”50
FERC never reasonably explained its departure from long-held judicial precedent with 
respect to the preference for single clearing price capacity auctions. That unexplained departure 
from precedent violates long-held juridical precedent in Williams Gas Processing-Gulf Coast Co. 
v. FERC, 475 F.3d 319, 326 (D.C. Cir. 2006) (“Williams Gas Processing”) (citing Brusco Tug & 
Barge Co. v. NLRB, 247 F.3d 273, 278 (D.C. Cir. 2001) (“[I]t is ‘axiomatic that [agency action] 
must either be consistent with prior [action] or offer a reasoned basis for its departure from 
precedent’”).  This failure to explain its departure requires rehearing or reconsideration by FERC 
of this ruling. 
48 September 29 Order at P 75.   
49 Id., LaCerte concurrence at P 6. 
50 Id., Rosner concurrence at P 4.

16 
C. 
FERC’s approval of the 20% shortage penalty for the RBP auction fails the test for 
reasoned decision-making because it is disproportionate to the risk consumers will 
incur if large load data centers do not materialize, and it is allocated to consumers 
who did not cause the circumstances leading to the incurrence of the penalty.   
FERC did not explain why the shortage penalty, set at 20% of the price bid by the seller 
times the cleared capacity, was appropriate.  PJM proposed that the shortfall charge would “be 
equal to the product of the RBP Resource’s committed . . . MW shortfall and 20% of the RBP 
price.”51  In approving this proposal, the September 29 Order states only that the proposed 
penalty is appropriate because it will work in conjunction with the high pay-as-bid RBP clearing 
price and the “promise” of up to 15 years of revenue certainty, which “will incentivize 
developers of RBP Resources to deliver” on their commitment.52  But FERC does not explain 
how a penalty set at only 20% of the clearing price, without additional restrictions, will 
encourage developers to meet their commitments.   
Under existing RPM rules, the non-performance penalty is set at the clearing price plus 
20% of that price.53  Those non-performing resources face additional penalties for not meeting 
commitments during performance assessment hours. In contrast, FERC accepted a proposal to 
limit the proposed shortage penalty to only 1/5th of the capacity sell offer, which seriously 
undervalues the reliance load places on resource adequacy.  
As the IMM explained in his Protest, “the RBP Filing is inconsistent with the capacity 
market approach to penalties for performance” because “[t]he proposed [RBP] Tariff language 
unnecessarily restricts the applicability of charges to a narrow, specific reason, is vague about the 
timing of the charges, limits the charges to three years, and shifts the risk from resource owners to 
51 September 29 Order at P 79. 
52 Id. at P 84. 
53 PJM Tariff, Attachment DD, sections 7 and 8.2.

17 
customers.”54 The IMM demonstrates that “[d]eficiency charges in the current RPM rules are 
assessed due to a failure to satisfy a commitment ‘for any reason,’ such as derates and 
retirements.”55  In contrast, “the proposed RBP Shortfall Charge would only apply for a specific 
reason, “due to not achieving commercial operation.”56 Moreover, the RBP shortfall charges are 
limited to a three-year period.57 In contrast, the new resources must be available for a 15-year 
period.  FERC never addressed the IMM’s concerns that there is nothing to protect consumers 
from shortfall in capacity that could occur in years four through fifteen.  FERCs failure to 
address serious challenges to the insufficiency of the proposed shortage penalty violates judicial 
precedent requiring that FERC address critical issues raised before it.58
FERC also ignores that under PJM’s proposal, it is consumers who may pay the shortage 
penalties. PJM states in its RBP Application that “[s]hortfall charges assessed to RBP Resources 
will be allocated to load.”59 It is unclear what PJM means by this statement, but it appears that 
PJM is proposing that consumers rather than those bidding the resources into the RBP auctions 
will pay the shortage penalties. Although OCC protested this element of the RBP proposal, 
FERC never addressed that concern. It simply is not just and reasonable to impose these shortage 
penalties on consumers when it is the suppliers that FERC seeks to encourage to comply with 
54 IMM Protest at 15. 
55 Id.
56 Id. at 15-16, citing proposed Tariff, Attachment DD, section 8.1 
57 RBP Application at 61; see also IMM Protest at 17.   
58 Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (FERC’s orders are arbitrary 
and capricious if it “relied on factors which Congress has not intended it to consider, entirely failed to consider an 
important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the 
agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency 
expertise.”); see also Friends of Buckingham v. State Air Pollution Control Bd., 947 F.3d 68, 80 (4th Cir. 2020); 
Appalachian Voices v. State Water Control Bd., 912 F.3d 746, 753 (4th Cir. 2019). 
59 RBP Application at 61.

18 
promised in-service dates and it is suppliers that have the power to remedy the problem.  FERC’s 
failure to address this issue also violates judicial precedent.60
FERC’s ruling accepting the proposal to impose the shortage penalty on loads might have 
been just and reasonable if the auction design made the cost causers (large data center loads)  pay  
the costs associated with the RBP auctions. But under the RBP auction design accepted by 
FERC, it is all consumers in the Electric Distributor zones that are short that will pay the 
incentive for seller performance.61 This is unjust and unreasonable.  
If the RBP capacity developers fail to abide by their commitment to bring capacity to 
PJM by June 2032, consumers will bear the risk of that capacity not materializing through 
curtailments of energy deliveries.  This is especially true given FERC’s recent rejection of PJM’s 
companion filing to the RBP Application, i.e., the Interim Resource Adequacy Service (“IRAS”) 
proposal.62 That proposal would have targeted curtailments to the zones that are short on 
capacity.63 In the absence of that proposal, PJM curtailments could affect all consumers across 
the grid. Thus, all consumers grid-wide could be saddled with both energy curtailments and the 
excessive costs of the unmitigated seller market power stemming from the RBP auction. These 
consumers should not also bear the shortage penalties incurred by capacity sellers unable or 
unwilling to abide by their commitments.   
FERC should have found the shortage charge provisions of the RBP proposal unjust and 
unreasonable, and required further briefing or a modified filing to ensure that the shortage 
penalty was sufficiently stringent to incent capacity developer performance. FERC also should 
60 See n.58, supra.   
61 RBP Application at 61.     
62 PJM Interconnection, L.L.C., 197 FERC ¶ 61,019 (2026) (rejecting the curtailment provisions in PJM’s 
companion to the RBP filing). 
63 Id. at P 53.

19 
have made clear that such penalties would be allocated to the developers defaulting on their 
commitments. The combination of a more stringent shortage penalty with a structure that 
allocated such costs either to the developers or the load causing the costs to be incurred would be 
fair, follow cost causation principles and protect all other consumers in Ohio and elsewhere in 
PJM. 
D.  
FERC’s approval of the RBP auction structure violates long-held judicial precedent 
requiring that costs be allocated to those causing the costs to be incurred or to those 
benefitting from them.  It also does not protect consumers from the unjust and 
unreasonable results of RPM auctions held in the past three years that cleared short 
because of large data center load demands.  
FERC never addressed OCC’s main concern that the RBP auction model is 
inappropriate, unjust and unreasonable because it does not target procurement and allocation of 
the resulting auction costs to the large data center loads causing the shortage in the 2028/2029 
and earlier RPM Delivery Years.  PJM and FERC both recognize that the need for the RBP 
auction is the direct result of the sudden addition of more than 6,000 MW of large load data 
centers to the PJM resource adequacy forecasts.  As FERC recognizes in the September 29 
Order, the courts have long required that “Commission-jurisdictional rates and charges must 
‘reflect to some degree the costs actually caused by the customer who must pay for them,’ and 
costs must be allocated in a manner that is at least roughly commensurate with benefits.”64 FERC 
further recognized that “[c]ompliance with this principle is evaluated by ‘comparing the costs 
assessed against a party to the burdens imposed or benefits drawn by that party’.”65
OCC demonstrated that PJM’s proposal would not ensure allocation of costs associated 
with the RBP auction to those entities causing those costs to be incurred and benefitting from 
64 September 29 Order at P 150, citing KN Energy Inc. v. FERC, 968 F.2d 1295, 1300 (D.C. Cir. 1992);  Ky. Pub. 
Serv. Comm’n v. Am. Elec. Power Serv. Corp., 193 FERC ¶ 61,110 (2025). 
65 Id., citing Ill. Com. Comm’n v. FERC, 576 F.3d 470, 477 (7th Cir. 2009).

20 
that auction.66 Nowhere in the record is there any evidence that parties other than large load data 
centers caused the need for the RBP auction.  Indeed, the name of PJM’s Application for the 
RBP framework is “Reliability Backstop Procurement to Address Resource Adequacy Concerns 
Stemming from Large Loads” (emphasis added). FERC should have rejected the RBP auction 
proposal and directed PJM to meet again with stakeholders to consider a model that would 
provide appropriate allocations of costs, while also providing critically needed consumer 
protections against market power in an auction structure that is likely to face supply scarcity. 
The IMM also criticized PJM’s RBP proposal for its failure to properly allocate costs to 
cost causers. As OCC explained in its Protest, the IMM stated that “[t]he most important 
criterion for evaluating proposals to address how to reliably serve new data center load is the 
assignment of the costs and risks associated with LSEs serving data center load.”67 The IMM 
further explained that “the failure to exclude new data center load from the BRAs [RPM base 
residual auctions], as PJM proposes, would by definition impose significant costs on other 
customers and therefore violate the basic principle that data center costs should not be imposed 
on other customers.”68
Commissioner LaCerte emphasized the importance of allocating the costs of the RBP 
auction to those causing the costs to be incurred, i.e., the large load data centers.  He stated that  
The vital nature of the large load integration issue to all Americans is 
highlighted by the very existence of the January 2026 Statement of 
Principles Regarding PJM in which the White House National Energy 
Dominance Council and the governors of all 13 PJM states joined together 
to address these large load issues as well as the March 2026, White House 
66 OCC Protest at 12-15.   
67 OCC Protest at 16, citing Monitoring Analytics, Critical Issue Fast Path Proposed Reliability Backstop Auction 
Proposal at 1 (Jun. 30, 2026), available at 
https://www.monitoringanalytics.com/reports/Presentations/2026/IMM%20Backstop%20auction%20design%20pro
posal%20-%20V6%202026.06.19.pdf (“IMM RBP Proposal”). 
68 Id.

21 
Ratepayer Protection Pledge which addressed that new large loads will, at 
a minimum, “build, bring, or buy the new generation resources and 
electricity needed to satisfy their new energy demands, paying the full cost 
of those resources” and which received broad consensus from utilities, 
cooperatives, data center developers, and governors.69
Commissioner See in her concurrence likewise emphasized the need for PJM to get the 
cost allocation correct in any revised filing.  She stated that “PJM must better ensure that the 
customers driving new costs bear appropriate responsibility for them and that existing customers 
are not left paying the bill instead.”70 Commissioner Rosner similarly stated that “[t]he limited 
set of guidance we give PJM to revise its proposal will enable PJM to assign costs to those 
responsible (i.e. to the zones with data center growth) for the resource adequacy shortfall, 
consistent with cost causation principles, and it is my hope that PJM will act on this guidance 
swiftly so that needed generation may be procured.”71
FERC never addressed OCC’s concern related to the overall auction structure design, and 
the unjust and unreasonable cost allocations stemming therefrom. FERC also never addressed 
OCC’s protest related to the failure of the PJM proposal to address the unjust and unreasonable 
cost allocations resulting from the previous three RPM auctions that all cleared short of PJM’s 
identified resource adequacy goal.72 OCC demonstrated that data center demand increased 
capacity costs to other PJM customers by approximately $23.1 billion across the 2025/2026, 
2026/2027, 2027/2028 Base Residual Auctions.73 As OCC explained in its Protest, “[t]he $23.1 
billion figure is not a mere historical artifact of load growth. It reflects a structural outcome of a 
69 September 29 Order, Commissioner LaCerte concurrence at P 4 (footnotes omitted).   
70 Id., Commissioner See concurrence at P 6. 
71 Id., Commissioner Rosner concurrence at P 2, 
72 OCC Protest at 11. 
73 Id., citing Market Monitor Report at 1.

22 
capacity market in which extraordinary new demand (data centers) can raise clearing prices 
across a much larger base of existing capacity (other customers including residential customers). 
The result is a system-wide cost shift that extends far beyond the incremental load that triggered 
it.”74
Judicial precedent requires that FERC at a minimum address the arguments before it.75
Just as it did with individual issues set for paper hearing, FERC could have found that both the 
PJM existing rules and the PJM proposal are unjust and unreasonable to achieve a proper 
allocation of costs associated with generating capacity procured in the RBP auction.  It then 
could have sent the matter back to the PJM stakeholder process or set the matter for hearing and 
settlement procedures.76 As OCC explained in its protest, the reality is that PJM’s auction 
proposal is not going to cure the shortage in time for the 2028/2029 Delivery Year, thus there is 
no harm in delaying implementation of a remedy.   
Given that even PJM’s proposed RBP auction structure would not procure sufficient new 
generating capacity in time for the 2028/2029 Delivery Year, FERC should have taken the time 
to direct PJM to get the auction structure right. A more appropriate auction structure along the 
lines of that proposed by the IMM would have better addressed OCC’s cost allocation concerns 
by targeting the costs of the capacity procured in the RBP auction to the loads causing that cost 
incurrence. 
VI. 
CONCLUSION AND PRAYER FOR RELIEF 
WHEREFORE, OCC respectfully requests that FERC reconsider its rulings in the 
September 29 Order, and afford consumers in Ohio and elsewhere in PJM the full protections of 
74 Id.
75 See n.58 supra.
76 September 29 Order at P 23.

23 
just, reasonable, and not unduly discriminatory and preferential rates by (1) directing PJM to set  
a lower market seller offer cap for the RBP auction consistent with protests filed by OCC and 
others on this issue; (2) reject the pay-as-bid proposal in favor of the single auction clearing price 
format used for RPM auctions and direct PJM to adopt a single clearing price design; (3) reject 
the 20% shortage penalty and the proposal to allocate related costs to load, and direct PJM to 
adopt a more stringent proposal that will actually encourage suppliers to timely reach 
commercial operation; and (4) direct PJM to work with stakeholders to develop an RBP auction 
design that will properly allocate related costs to the cost causers and develop a remedy for the 
allocation of costs associated with the past three RPM auctions that cleared short because of the 
addition of forecasted large data center loads.   
Respectfully submitted, 
Maureen Willis  
Ohio Consumers’ Counsel 
/s/ Angela O’Brien  
Angela O’Brien 
Deputy Consumers’ Counsel  
Office of the Ohio Consumers’ Counsel 
65 East State Street, Suite 700 
Columbus, Ohio 43215 
Telephone: (614) 466-9531 
angela.obrien@occ.ohio.gov
/s/ Denise C. Goulet 
 
Denise C. Goulet, Esq. 
McCarter & English, LLP 
1301 K Street, N.W., Suite 1000 West 
Washington, D.C. 20005 
(202) 753-3400 
dgoulet@mccarter.com 
Special Counsel for The Office of  
Attorney General of Ohio on Behalf of 
the Office of the Ohio Consumers’ Counsel 
October 29, 2026

CERTIFICATE OF SERVICE 
I hereby certify that I have on this date served a copy of the foregoing document via 
electronic mail upon all parties of record on the Commission’s official service list in this 
proceeding. Dated in Washington, D.C., on this 29th day of October, 2026.  
/s/ Denise C. Goulet 
Denise C. Goulet, Esq. 
McCarter & English, LLP 
1301 K Street, N.W., Suite 1000 West 
Washington, D.C. 20005 
(202) 753-3400 – Telephone 
dgoulet@mccarter.com