FERC Suspends PJM's 6,831-Megawatt Data-Center Power Auction for Five Months

The Federal Energy Regulatory Commission accepted PJM Interconnection's Reliability Backstop Procurement on Sept. 29, then suspended it for five months, to Feb. 28, 2027 ¹. PJM pulled the auction it had planned to open the next morning ². The procurement was built to buy 6,831 megawatts of new capacity on contracts of up to 15 years, enough to cover the shortfall in PJM's last capacity auction ¹. That gap traces mostly to data centers: in PJM's December 2025 auction, nearly 5,100 of the 5,250 megawatts of forecast load growth came from them ¹.

PJM runs the grid for 13 states and the District of Columbia, and it is the largest grid operator in the United States ². Its capacity shortfall is the clearest public measurement of how quickly AI campuses outrun the generation meant to serve them. On Sept. 29, the remedy for that shortfall stopped for five months.

FERC accepted the auction and stopped its clock

The order does two things at once. It declares most of PJM's design just and reasonable, including the $555 per megawatt-day cap on the weighted average price ¹. Three pieces go to a paper hearing instead, because they "may be unjust and unreasonable": cost allocation, the rules for a transmission owner that leaves PJM, and collateral demanded of the utilities that buy the power ¹. RTO Insider summed it up as approval of "the bulk" of the plan with implementation on hold ⁵.

Chairman Laura Swett wrote the sharpest words in the docket. PJM filed on July 31, the last possible day to keep a Sept. 30 opening alive, and she blamed that timing for the result ¹. "Whether by accident or incompetence, that timing left the Commission no meaningful opportunity to issue a deficiency letter, seek additional record development, or establish hearing procedures to attempt to rehabilitate the mess we received," Swett wrote ¹. Then came the line every trade outlet led with. "This Commission will not be forced into accepting a deeply flawed, eleventh-hour procurement mechanism with billion-dollar implications for consumers," she wrote ¹.

Read the verb. Swett says FERC was "forced," which places the delay on PJM's calendar and keeps it off FERC's, and the order supports her with a figure about money. Northern Virginia Electric Cooperative told FERC its collateral under PJM's rules could reach about $1.95 billion, more than its total assets ¹. The inference is plain: a cooperative asked to post more than it owns makes a shaky buyer on a 15-year contract.

FERC's order moves PJM's backstop auction from Sept. 30 to Feb. 28, 2027

Timeline

The data6 rows · sources

Date	Event	Source
July 31, 2026	PJM files the backstop procurement at FERC	[1]
Sept. 29, 2026	FERC accepts the design and suspends it five months	[1]
Sept. 30, 2026	PJM pulls the auction set to open that day	[2]
Oct. 29, 2026	Thirty days for a PJM refiling that could pause the hearing	[1]
Dec. 9, 2026	Base auction for 2029/2030 opens	[1]
Feb. 28, 2027	Suspended procurement takes effect	[1]

Why does a grid auction belong on a superintelligence ledger?

The ledger's definition asks for ten gigawatts of energized compute acting as one machine. Every one of those gigawatts requires generation behind it, so the energy component asks a practical question: is the electricity contracted, interconnected and generating? PJM's backstop is a one-time purchase of new capacity, on a fixed timetable, for a shortfall that data-center load largely drove ¹.

PJM's own survey identifies who was waiting. In April, 21 entities named 47 large-load projects that averaged 850 megawatts each ¹. On the supply side, 87 entities offered 397 projects with about 136 gigawatts of potential capacity ¹. FERC's own finding explains why the backstop exists at all. "We think it clear that PJM's ordinary instrument for procuring sufficient capacity to meet PJM's reliability requirement, the RPM, has failed to keep pace with the unprecedented influx of large load into the PJM Region in recent years," the Commission wrote ¹.

The case for the move: a 6,831-megawatt gap with its fix on hold

Every figure behind the shortfall points the same way. PJM's 2027/2028 auction cleared 6,623 megawatts short of the reliability requirement, the first such miss in the auction's history ¹. The 2028/2029 auction followed in July and cleared 6,831 megawatts short at its $325 cap ¹. That same July auction drew only 525 megawatts of new generation and uprates, so the backstop was asking for roughly thirteen times what the regular market had delivered ⁶.

David Mills, PJM's president and chief executive, gave the reason in July. "These auction results show that demand for electricity continues to grow faster than electricity supply," Mills said ⁶. The backstop was his answer, and its calendar was tight. Offers were due between Sept. 30 and Oct. 21, with results set to land before the next base auction opens on Dec. 9 ¹. Mgrid's Marin Holt drew the consequence: bidders in December will now price their offers blind to what the backstop buys ³.

So what does the step measure? It measures contracted electricity delayed at considerable scale. A 15-year contract signed in December would have handed developers a guaranteed revenue stream to present to their lenders. The order itself records that effect: PJM Interconnection argued that long terms "may improve financing opportunities through lower capital costs" ¹. Five months of paper hearings push that financing date back. Reuters reported that FERC wants large users such as data centers to cover the costs ⁴.

PJM's capacity shortfall dwarfs the new generation its market cleared

Compared

The data4 rows · sources

Unit: megawatts

Item	Value	Source
2027/2028 shortfall December 2025 auction	6623	[1]
Data-center load growth 2027/2028 forecast	5100	[1]
2028/2029 shortfall July 2026 auction	6831	[1]
New generation cleared July 2026 auction	525	[6]

The case for a smaller step

PJM's answer is the strongest case against reading the order as a setback. Jeffrey Shields, a PJM spokesman, said the order gives a "clear path" to resolving the open issues ². "PJM is reviewing the order and intends to work quickly to address the commission's remaining concerns," Shields said ². He added the goal in full: "We remain focused on advancing solutions that maintain reliability, appropriately allocate costs to the customers driving those costs, and protect consumers as the region navigates significant demand growth" ².

The order supports him in its own procedure. FERC invited PJM to refile under section 205 and said it expects to hold the hearing in abeyance if that filing arrives within 30 days ¹. Four commissioners wrote concurrences, and all four pressed for speed. David Rosner put the trade in one sentence. "While the record reflects a wide range of views on how best to address the emerging reliability challenges, the downside risk of inaction far outweighs the risk of an imperfect solution," Rosner wrote ¹.

Lindsay See named the single flaw that matters most. "Unfortunately, though, PJM missed the mark on an important element of its proposal: it did not adequately ensure that the procurement's costs will be allocated to the customers who drive its need," See wrote ¹. David LaCerte closed his statement with a deadline in plain words. "A competent and effective RTO can take this half-baked cake and finish the job," LaCerte wrote ¹.

Three additional facts shrink the step. First, the backstop buys capacity for the 2028/2029 delivery year at the earliest, with in-service dates allowed out to 2032/2033, so five months of delay sit far from any energized megawatt ¹. Second, PJM's bilateral matchmaking between data centers and suppliers continues in parallel for six to nine months ¹. Third, bidders disagree on whether the auction would have bought much at all. E-Cubed told FERC the $555 cap sits below the real cost of new capacity, and NRG asked for $866 ¹.

What FERC accepted in PJM's plan, and what it sent back

The record

The data8 rows · sources

Column	Item	Source
Accepted by FERC	$555 per megawatt-day weighted average price cap	[1]
Accepted by FERC	Contracts of up to 15 years for new capacity	[1]
Accepted by FERC	Collateral rules for power suppliers	[1] [2]
Accepted by FERC	Refiling within 30 days could pause the hearing	[1]
Sent back for repair	Cost allocation to the customers who drive the need	[1]
Sent back for repair	Rules for a transmission owner that leaves PJM	[1]
Sent back for repair	Collateral for buyers, up to $1.95 billion for one cooperative	[1]
Sent back for repair	Opt-out for cooperatives and municipal utilities, possibly discriminatory	[1] [2]

Where this sits on the ledger

The reading asks whether the power behind ten gigawatts of compute is contracted and generating. On Sept. 29 a regulator's order moved the largest pending procurement for data-center load from this autumn to the end of February at the earliest. That is confirmed regulatory evidence, and it points down.

How far down? The confirmed band runs from 0.8 to 1.5 points, and a cancelled procurement, or a gigawatt campus abandoned after its power deal collapsed, would sit near the top. This order preserves the mechanism and the price cap, and it demands a fairer allocation of the bill. Energy moves down 0.8, at the floor of the band. The component carries a weight of 0.15, so the step is a record of delay at scale and stops short of a verdict on the grid.

FERC's suspension of PJM's auction pulls energy down 0.8 points

The move

The data5 rows · sources

Measure	Value
Reading before this day	1.9
This piece's move	−0.8 (Energy, confirmed)
Band for confirmed evidence	0.8 to 1.5
Reading after the day (with 3 other pieces that day)	1.1
Distance to 100	98.9

By the numbers

• 6,831 megawatts: the 2028/2029 shortfall the backstop was built to cover ¹
• Nearly 5,100 of 5,250 megawatts of forecast load growth in the 2027/2028 auction came from data centers ¹
• Five months of suspension, to an effective date of Feb. 28, 2027 ¹
• About $1.95 billion in collateral that Northern Virginia Electric Cooperative said it could owe ¹
• Only 525 megawatts of new generation and uprates cleared in the July auction ⁶
• $555 per megawatt-day as the weighted average cap FERC accepted ¹
• Up to $20 billion for new power plants, by the Natural Resources Defense Council's estimate of the auction ⁷

What to watch

A PJM section 205 refiling by Oct. 29, thirty days from the order, would confirm Shields's reading and likely bring the auction back before February. December's base auction results, priced before any backstop result exists, will show whether the shortfall grew or shrank. A slip past Feb. 28, 2027, or a refiled design that buys a small fraction of the 6,831 megawatts, would argue for a larger down-move on a later day.