FERC Suspended PJM's 6.8-Gigawatt Backstop Auction. The Build Waits.

The Federal Energy Regulatory Commission accepted PJM Interconnection's emergency capacity plan on September 29 and then put it on hold. The order in Docket ER26-3380 suspended the proposal's effective date until February 28, 2027, subject to refund and further proceedings, and PJM shelved the bid window that was to open the following morning. The grid operator said it would review its announced milestones and bring a revised timetable to its Market Implementation Committee on October 7.

PJM filed the mechanism on July 31 after its base residual auction for the 2028/29 delivery year came up 6,831 megawatts short of the reliability requirement. That auction procured 138,318 megawatts of unforced capacity but drew only 525 megawatts of new generation and uprates, and it was the second consecutive year PJM missed its standard. The reliability backstop procurement would have bought roughly 6.8 gigawatts of new capacity under 15-year contracts, with an offer cap of $555 per megawatt-day against the $325 cap that governed the base auction. Cost estimates ran near $20 billion.

The Commission did not reject the concept. It rejected the plumbing: PJM's cost allocation method, its exit rules for transmission owners, and its collateral requirements for load-serving entities. Chair Laura Swett said the Commission would not be forced into accepting a deeply flawed, eleventh-hour procurement mechanism with billion-dollar implications for consumers. Commissioner Rosner concurred, writing that the Commission's responsibility to the 67 million people in PJM is to keep the lights on, and pressed PJM to assign costs to the zones where load is growing.

A 15-year capacity contract is the instrument that moves a generating project from a development file to a notice to proceed. Until the backstop clears, close to six gigawatts of prospective new build in the PJM footprint carries no revenue commitment, and the electrical scope that follows a plant award stays unreleased: switchyard construction, step-up transformers, medium-voltage cable and terminations, protection and control wiring, and the acceptance testing that closes it out.

That scope is not interchangeable with data center fit-out. Generation and switchyard work is industrial power work, and it leans on journey-level electricians with medium- and high-voltage qualification, relay and instrumentation experience, and documented testing before energization. Contractors who staffed for a December award now carry that plan into 2027. Rosner also pushed the next round of decisions toward the states, calling on retail regulators to set large-load tariffs, collateral rules, and curtailment orders that put homes, hospitals and schools ahead of data centers. For commercial electricians in the PJM footprint, the near-term work remains data center interiors and transmission upgrades, and the state commission dockets, not the auction calendar, carry the next hiring signal.

PJM's revised timetable arrives October 7. The suspension runs to February 28.