Bring Your Own New Generation, or Connect and Manage: PJM's Board Letter on Large Load Additions

The Board of Managers of PJM, a grid operator, wrote to stakeholders in a letter dated January 16, 2026 and headed "Board Decisional Letter on Critical Issue Fast Path - Large Load Additions." It follows what the letter calls the "Critical Issue Fast Path (CIFP) accelerated stakeholder process for large load additions."

The executive summary says some components of the decision "will serve as transitional measures while the industry and government collectively work to bring more supply to the system". It adds that "the decisions made here can be revisited based on a series of factors, namely whether the region's supply/demand balance and reserve margin are restored to a level that comfortably ensures resource adequacy" for existing consumers and large load additions.

Framing the Board's Review

That heading is the letter's own. Under it: "As the results of the 2027/2028 Base Residual Auction (BRA) display, the RTO has cleared short of its reliability requirement for the first time in history."

The auction, the letter says, cleared 5.6% short of the target reserve margin. "The Board views this outcome as a clear signal that current trends are not acceptable and warrant corrective action."

Further on: "At this time, the Board is not taking action to restrict the interconnection of new load through the creation of a dedicated load interconnection queue or through other limiting measures."

Defining Large Load Additions

"For purposes of the proposed Tariff and manual provisions being developed as a result of this CIFP process, the Board proposes to define large load additions as individual additions of load at or above 50 MW at a single Point of Interconnection."

A footnote adds: "EDC or LSE may request large loads under 50 MW for consideration on a case-by-case basis." The letter spells out LSEs as load serving entities, and an appendix spells out EDC as electric distribution company.

Bring Your Own New Generation

The letter's heading for this part begins "Voluntary Bring Your Own New Generation (BYONG)". It says the Board supports frameworks under which LSEs, large loads and states "bring their own incremental generation to the system to offset, on an ELCC-measured basis, their load additions." The letter does not spell out ELCC.

On the states, the letter says "the states within PJM's footprint retain the authority to determine how such frameworks are applied to individual retail customers, including large loads."

Data centers, it says, "account for a substantial share of forecasted large load additions in the PJM footprint". In the same paragraph: "The Board does not support approaches that seek to limit or eliminate this growth."

The letter says "the Board encourages voluntary" BYONG, and directs the PJM staff to implement its proposal related to the Expedited Interconnection Track, a track that "will serve as an alternate path for any entity seeking to mitigate curtailment risk by bringing their own new generation to the system on an accelerated basis."

The next two sentences: "PJM staff will review any specific language changes necessary or appropriate with stakeholders prior to adoption or any requisite filing. The Expedited Interconnection Track should be in place by August 2026."

A footnote points to Appendix C for the details. That appendix lists features of the PJM staff proposal. Among its eligibility criteria: "requests must be for large scale generation greater than 250 MW (UCAP)." The letter does not spell out UCAP. Another criterion: "Commercial operations must be achieved within three years of the application submission. Output to the grid may still be limited based on completion of any network upgrades required." The appendix also says: "Applications are capped annually at 10 projects." And it lists a "Large nonrefundable study deposit" and a readiness deposit.

Connect and Manage

This part covers the case where an LSE identifies a shortfall between forecasted load additions and "the availability of new incremental generation to offset that growth". The Board directs the development of a framework. "Under this framework, the incremental demand associated with such load growth would be subject to curtailment prior to the deployment of pre-emergency Demand Response."

Further on: "Consistent with its operation of the system today, PJM will take all reasonable steps to maintain grid stability and avoid curtailment. However, should system conditions over a given period force PJM to invoke its emergency procedures, the Board finds it reasonable for certain large loads, including data centers, to move to their backup generators, or curtail their demand, for a limited number of hours during the year to prevent a larger scale outage for residential and other consumers."

The next sentence: "Such curtailment would be expected to occur infrequently, for limited durations, and only when necessary to prevent broader system impacts, consistent with PJM's longstanding operational practice of avoiding curtailment whenever possible."

On who chooses: "Ultimately, the determination of which loads are curtailed during emergency conditions rests with TOs, and with LSEs that have direct relationships with their customers. PJM does not have authority to direct individual retail loads to curtail demand." TOs are transmission owners.

The Board does not propose to take such load out of the capacity market. Of removing it, the letter says: "Removing such load from the market would instead result in large new loads avoiding capacity costs altogether, with those costs shifted to existing consumers". A footnote to that sentence: "The Board reserves the right to look at this issue again as part of the design of the reliability backstop procurement described in this letter."

Later in the same part, the Board "recognizes that a number of future developments will be relevant to the design of longer-term approaches to large load integration. These include, among other factors, the extent to which large loads contract for new generation to offset load additions, potential future actions by federal and state authorities, the resolution of supply chain constraints, success in siting and permitting, and other market and policy developments. In light of these uncertainties, the Board views the capacity market-related actions outlined in this letter as interim measures intended to address near-term reliability risks."

On the load shed prioritization and allocation, the Board "asks that the stakeholders proceed expeditiously such that changes are in place by the end of 2026".

Reliability Backstop Procurement

"The results of the recent 2027/2028 capacity auction indicate that PJM will fall short of its FERC-required reliability requirement in that delivery year."

The next sentence: "The PJM Tariff currently allows PJM to run a backstop capacity procurement if the system clears short of the reliability requirement for three consecutive capacity auctions."

The Board, the letter says, "directs PJM staff to develop a proposal to both accelerate and execute this procurement."

On cost: "The Board directs PJM staff to address cost allocation for any such procurement, including consideration of mechanisms that assign costs to those LSEs that are short as a result of incremental load growth within their service areas. Those LSEs may, in turn, determine how such costs are allocated to incremental loads, consistent with state law."

Further on: "Over the longer term, the Board does not view it as desirable for PJM to serve as the procuring authority to long-term commitments resulting from backstop procurement."

A Review, and a Request for Feedback

"Accordingly, the Board directs PJM to analyze how the energy, reserve and capacity markets can evolve in a coordinated manner to provide appropriate incentives for both investment and performance."

It sets a time: "The Board directs PJM staff to perform this analysis in the first half of 2026."

Under its heading on the price collar, the letter says "the Board seeks additional stakeholder input as to whether the price collar that was in place for the 2026/2027 and 2027/2028 auctions should be extended." It asks for responses "as soon as practicable, but before January 30, 2026."