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FERC unanimously approves order to let PJM and generators serve colocated loads with new transmission services
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Summary
The Federal Energy Regulatory Commission voted unanimously to adopt an order directing PJM to revise its tariff to accommodate co‑located large loads and generators, require new firm and non‑firm contract demand services and an interim non‑firm NITS option, open a paper hearing on rates and terms, and seek a 30‑day informational report from PJM.
The Federal Energy Regulatory Commission voted unanimously on Dec. 1 to adopt a comprehensive order instructing PJM Interconnection to revise its tariff to allow generators and large colocated loads — notably data centers — to interconnect under new transmission service options intended to speed deployment while protecting reliability and ratepayers.
Commissioners said the decision creates three new pathways for colocated arrangements: a near‑term interim non‑firm network integration transmission service (NITS), a firm contract demand transmission service, and a non‑firm contract demand transmission service. The order also establishes a paper hearing to set just and reasonable rates, terms and conditions for those services and directs PJM to file a detailed informational report within 30 days describing stakeholder proposals and schedules to accelerate interconnection and new generation.
"This order is over a 100 pages, and it's highly technical," the chair said in opening remarks, stressing that the Commission can act only on the consolidated record and that the changes are intended to ensure large loads "pay their fair share" while helping the system meet surging demand. Commissioner Rosner, speaking in support, said: "If a new large load wants to connect directly with a power plant and operate in a way that lowers grid costs, we should let it." Rosner and other commissioners emphasized that the options are intended to lower costs, shorten lead times for new generation, and include enforceable curtailment risk for loads that elect non‑firm arrangements.
Staff presentations from the Office of the General Counsel and the Office of Energy Market Regulation summarized the Commission's findings that portions of the PJM tariff are unjust and unreasonable because they lack clear, consistent terms for colocated configurations. Staff recommended directives including revisions to PJM's behind‑the‑meter generation (BTMG) rules and a transition process for existing BTMG participants, while retaining a materiality threshold to exempt smaller facilities.
The Commission highlighted an urgent reliability backdrop: PJM's recent capacity auction cleared roughly 6,600 megawatts short of the region's reliability requirement, underscoring the need to accelerate interconnection of new generation. Commissioners directed PJM to include schedules for any proposals so the Commission and stakeholders can track when filings would take effect.
The order preserves the long‑standing federal/state jurisdictional line: states retain authority over retail rates and allocation of transmission charges among retail customers, while FERC's action focuses on interstate transmission service and generator interconnection that affect PJM's markets.
The motion passed on a recorded roll call. The Commission recorded affirmative votes from Commissioner Lacerte, Commissioner Chang (who filed a concurrence asking for record development on minimum charges and cost allocation), Commissioner C., Commissioner Rosner (noting a separate statement), and Chairman Sweatt.
The order grants in part and denies in part a complaint by Constellation Energy Generation LLC in docket EL25‑20 and directs PJM to revise tariff provisions that relate to co‑located arrangements and to propose implementation details for a replacement rate in the paper hearing. PJM must also identify which FastPath stakeholder initiatives would support expedited interconnection of shovel‑ready generation sufficient to serve large loads while meeting near‑term resource adequacy needs.
Next steps: PJM has 30 days to submit the informational report the order requires. The paper hearing and subsequent compliance filings will address the rates and allocation questions that the Commission left to the record. The Commission's action does not itself set final rates; it establishes the framework and directs further filings and a hearing to determine the justness and reasonableness of prices and terms.
The Commission concluded the vote by thanking staff and advisers for weeks of work on the docket. The order is intended as the first of multiple steps to address large‑load interconnection and the PJM resource adequacy challenge.
