DOE Tells FERC Data Centres Must Pay for PJM’s 6.8 GW Power Gap

The US Department of Energy (DOE) told federal regulators on Wednesday, 7 October 2026 that PJM Interconnection must rework its stalled 6.8 GW backstop procurement so that data centres, not existing customers, pay for the power they need. According to Utility Dive’s Ethan Howland, the filing appears to be DOE’s first of its kind at the Federal Energy Regulatory Commission (FERC) in at least five years. It is a clear sign of how seriously Washington is treating PJM data centre power demand.

The procurement was halted at the last minute, just before its scheduled 30 September start.

Over the next three weeks, PJM and FERC will decide how billions in capacity costs are split between utilities, generators and ratepayers. Here is who is most likely to pay, which dates decide it, and where the risk sits for utilities and generators across the PJM footprint.

Why is DOE stepping into a PJM capacity fight over who pays?

Federal energy departments rarely weigh in on grid operator tariff disputes. DOE’s statement of position, filed at FERC, breaks that pattern and goes further than procedural support.

DOE’s cost causation filing follows a run of emergency grid orders directed at PJM this year, the latest of which on 17 September 2026 gave the operator authority over Mid-Atlantic backup generators.

DOE backed FERC’s finding that PJM’s Reliability Backstop Procurement (RBP) needs changes. The RBP is a one-time auction designed to buy the capacity that PJM’s regular auctions failed to secure. DOE’s argument rests on cost causation, the principle that whoever creates the need for new infrastructure should fund it. Under that principle, new data centres and other large loads would pay for the generation they trigger.

DOE’s core concern DOE said it shares FERC’s worry that PJM’s proposed cost allocation may be unjust and unreasonable, because the costs might not fall on the customers who cause them.

DOE also tied its position to the voluntary Ratepayer Protection Pledge. Signers commit to shielding households and other businesses from price rises driven by large-load demand. Signatory utilities in PJM territory include:

• American Electric Power (AEP)
• AES
• CenterPoint Energy
• Dominion Energy
• Exelon
• FirstEnergy
• PPL

DOE said adopting FERC’s revisions would advance the pledge’s principles.

With a federal agency now lined up behind FERC, the odds rise that any final design pushes costs towards large loads. That matters for how you view these utilities. They have publicly committed to protecting customers, which limits how freely they can recover data-centre-driven costs.

Where does the 6.8 GW shortfall come from, and why did FERC pause the fix?

The shortfall traces back to the load forecasts. In the 2027/2028 Base Residual Auction (BRA), PJM’s main annual capacity auction, forecast peak load was about 5,250 MW higher than in the previous cycle. Nearly 5,100 MW of that increase came from data centres.

PJM’s long-term growth expectation then rose from about 2% to about 2.4% over 20 years. At a February 2026 PJM workshop, staff put native-load growth at roughly 3 GW by 2035/2036, against an estimated large-load impact of 68,977 MW.

The 2028/2029 BRA cleared at its $325/MW-day price cap and still fell about 6,831 MW short. PJM’s backstop, with a proposed weighted price cap of $555/MW-day, was meant to close that gap.

The gap between those two growth figures tells you that forecast accuracy, not capacity alone, is the real swing factor for who ends up paying.

What FERC said was wrong with the design

FERC’s 29 September order accepted the RBP but suspended it until 28 February 2027, subject to refund, and set a five-month hearing track. The auction had been due to start on 30 September, with results around 2 December.

FERC flagged three problems: cost allocation, the rules governing transmission owner exits, and collateral demanded from load-serving entities (LSEs), the utilities and suppliers that buy power for end customers. FERC said the design “would not capture forecasted large load growth,” leaving some LSEs paying costs out of step with the benefits they receive.

The 6.8 GW shortfall has also sharpened the debate over PJM governance reform, since the limits of FERC’s authority over stakeholder processes shape how quickly any revised cost allocation can be imposed.

What DOE wants fixed in the forecasting and cost-allocation rules

DOE’s filing moves quickly from principle to plumbing. It wants costs allocated using updated load forecasts, with continuous tracking of whether each large project enters service, slips, shrinks or is cancelled.

Without current project-level data, DOE said PJM cannot:

1. Reliably reconcile its base forecast with load adjustments
2. Avoid omissions and double counting
3. Revise the procurement target if forecast load does not materialise
4. Attribute growth to the correct zone and LSE

DOE added a sharper warning. PJM’s tariff may leave out large loads already built into the baseline forecast, which would distort the allocation from the start.

That is a technical point with large dollar consequences. If cancelled or delayed data centre projects slip through the tracking, existing customers and the utilities serving them could be left holding stranded costs. That is the scenario to weigh when you assess regulatory pushback risk.

PJM’s Independent Market Monitor (IMM), the body that oversees market competitiveness, has already sketched a stricter alternative.

The IMM’s beneficiary-pays model A separate backstop auction for data centres of 5 MW or more that do not bring their own generation, sized to their specific 15-year capacity commitments plus a reserve margin, with only new generation allowed to sell.

Which dates decide the outcome, and who gains or loses in PJM?

PJM is not waiting for hearings to run their course. Spokesman Jeffrey Shields said the grid operator plans to refile at FERC by 29 October, the same deadline DOE recommended.

1. 22 October: Special Members Committee meeting, with a special Transmission Owners Agreement-Administrative Committee meeting also to be scheduled
2. 29 October: PJM’s targeted refiling date
3. 28 February 2027: Suspended effective date, subject to refund, if no faster resolution emerges

The stakes spread unevenly across a footprint covering 13 states plus the District of Columbia. PJM has projected a potential shortfall of 50-60 GW over the next decade, so the precedent set here reaches well beyond this auction.

None of these outcomes is settled. For you as an investor, the 22 October and 29 October results are the first real test of whether allocation tilts towards large loads, so those filings are the signals to read before repositioning.

For readers wanting the supply side of this problem, our deep-dive into PJM grid reliability and the capacity shortfall explains why no new plant can close the gap in time.

What the next three weeks will and will not settle

DOE has put federal weight behind cost causation, and FERC’s order points the same way. What remains open is the detail: how forecasts are tracked, how collateral is set and how transmission owners can exit. Those mechanics will decide whether data centres or existing customers carry the bill.

The filing fits into broader regulatory frameworks reshaping American energy infrastructure in 2026, where federal agencies are increasingly steering who funds new generation and grid capacity.

Nothing is final until FERC rules on PJM’s refiling. The 22 October Members Committee meeting and the 29 October filing are the checkpoints to watch, with 28 February 2027 as the fallback. Following PJM and FERC dockets directly is the clearest way to track how the allocation lands.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Forward-looking statements are speculative and subject to change based on regulatory and market developments.