The Federal Energy Regulatory Commission on Oct. 9, 2026 accepted two pieces of PJM Interconnection's proposal for handling large new loads such as data centers and rejected the rest. In an order in Docket No. ER26-3515-000 (197 FERC ¶ 61,019), the commission accepted PJM's definition of a Large Load and a new Large Load Registry, both effective Oct. 12, 2026. It rejected the Interim Resource Adequacy Service (IRAS), the Bring Your Own New Capacity (BYONC) rules, and the related provisions that made up the core of the filing.

The commission, chaired by Laura V. Swett, with Commissioners David Rosner, Lindsay S. See, Judy W. Chang and David LaCerte, acknowledged the strain on PJM's capacity supply but said it could not approve the central mechanisms as filed. "While we recognize the imminent capacity shortfall in PJM, we find that two key aspects of PJM's proposal—IRAS and BYONC—are either outside of the Commission's authority or have not been sufficiently demonstrated to be just and reasonable," the order states.

What PJM Asked For

PJM filed the proposal on Aug. 13, 2026 under section 205 of the Federal Power Act and requested an Oct. 12 effective date. According to the order, the filing had six parts:

  • a definition of a Large Load;
  • a Large Load Registry;
  • IRAS, under which New Large Load whose load-serving entity did not designate enough new capacity would be subject to load reduction requests when resources were insufficient to meet demand in real time;
  • a requirement for load-serving entities (LSEs) serving New Large Load to designate new capacity at least equal to that load's peak;
  • BYONC rules governing how that capacity would be supplied; and
  • exclusion of Eligible New Large Load from the Variable Resource Requirement (VRR) curve, the demand curve used in PJM's capacity auctions, beginning with the 2029/2030 delivery year.

Under PJM's proposed definitions, New Large Load generally meant a Large Load going into service after June 1, 2027, the start of the 2027/2028 delivery year, when most of the proposed tariff changes were to take effect.

The order summarizes PJM's case this way: beginning in the 2027/2028 delivery year, PJM "will be short of sufficient capacity to meet the PJM Region Reliability Requirement, particularly due to data center load growth and the pace of data center interconnection."

What FERC Accepted

The accepted definition covers end-use customer load with a cumulative peak of 50 MW or more at a single electrical site, treating affiliated facilities within a one-mile radius as one site. The commission found the 50 MW threshold "strikes a just and reasonable balance" between capturing the loads PJM needs visibility into and excluding smaller loads that do not raise the same reliability concerns. It also rejected protesters' requests to limit the definition to data centers and exclude manufacturing facilities.

The registry, which LSEs will populate, is to include each Large Load's location, in-service dates, peak load and ramp schedule, backup generation and fuel type, and contracts with the LSE, among other details, according to PJM's description in the order. Utility Dive reported that it will also capture each load's capacity supply.

Because the tariff sheets PJM filed for both provisions contained language tied to IRAS and BYONC, the commission rejected those sheets themselves and directed PJM to submit a compliance filing within 30 days.

Why the Commission Rejected IRAS and BYONC

The main objection to IRAS was jurisdictional. The order finds that several provisions "appear to place obligations directly on Eligible New Large Loads, which are, for the most part, retail customers," that others appear to dictate which retail customers would be curtailed, and that the proposed compensation framework appears to establish a retail rate. The commission found those aspects present "an impermissible intrusion on retail rate regulation" outside its authority under section 205.

The commission also cited "significant discrepancies" between PJM's transmittal letter description of IRAS and the tariff language PJM actually filed, along with a lack of justification for many aspects of IRAS and BYONC. It then rejected the remaining pieces, including the LSE capacity obligation, the BYONC rules and the VRR-curve exclusion, finding they were "inextricably linked" to IRAS and could not be severed from it.

The commission did not close the door on the concepts. It provided guidance on how PJM could modify the proposal if it refiles, and it addressed state regulators directly. "States have a crucial role to play in this challenge by designating which retail customers must be curtailed when the system is stressed, and we strongly encourage states to continue their important work on this issue," the order says.

Commissioner Rosner filed a concurring statement arguing that any refiled proposal must justify curtailing IRAS load before customers enrolled in demand response programs. "We need state regulators to establish clear rules for which customers should be curtailed first when circumstances require it," he wrote. He also warned that excluding IRAS load from the auction demand curve could produce "a capacity market signaling that PJM has more than enough capacity while the region sheds thousands of megawatts of demand on an involuntary basis."

PJM's Response

PJM spokesman Jeffrey Shields said in an email that the grid operator is reviewing the order "with an eye toward how we can fulfill FERC's requirements," according to Utility Dive, which reported that he also said PJM aims to respect state responsibilities and protect existing customers from unfair cost or reliability burdens.

The Capacity Backdrop

PJM's 2028/2029 Base Residual Auction procured 138,318 MW and came in 6,831 MW short of the reliability requirement, according to figures cited by PJM and reported by MGRID. The large-load ruling came about five weeks after FERC rejected key parts of PJM's proposed backstop procurement auction, Utility Dive reported.

What Happens Next

PJM's compliance filing on the definition and registry is due within 30 days of the Oct. 9 order, which is Nov. 8, 2026. PJM had sought the Oct. 12 effective date so it could change VRR-curve planning parameters for the 2029/2030 Base Residual Auction, which the order says is set to run in December 2026; that exclusion was rejected. Any new version of IRAS or BYONC would require a fresh filing by PJM under section 205, which the order says should consider the guidance it provides.

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