PJM delays its data-centre backstop auction after FERC approves only part
Serguey Asael Shinder2 min readPJM Interconnection has postponed the reliability backstop procurement it planned to open on 30 September, a day after the Federal Energy Regulatory Commission approved the proposal only in part, Utility Dive reports. A PJM spokesman, Jeffrey Shields, said in an email that a new timeline has not been set.
The backstop was meant to accept offers for capacity from 30 September to 21 October. It grew out of a fast-track stakeholder process after PJM, the largest grid operator in the United States, failed in its last two base capacity auctions to buy enough capacity to meet its reserve margin targets. The shortfall is driven largely by forecasts of data-centre demand.
FERC's order of 29 September found that the parts of the plan dealing with cost allocation, the exit rules for transmission owners and collateral requirements for load-serving entities may be unjust and unreasonable. It suggested possible fixes and strongly encouraged PJM to propose them quickly, which could avoid a hearing.
The commission's chair, Laura Swett, was blunter in a concurring statement. The filing arrived at the last minute, she wrote, leaving no time "to rehabilitate the mess we received", and the commission "will not be forced into accepting a deeply flawed, eleventh-hour procurement mechanism with billion-dollar implications for consumers."
PJM's response was conciliatory. Shields said the order gives a clear path to resolving the open issues and that PJM intends to address the remaining concerns quickly, with the aim of keeping the system reliable and allocating costs "to the customers driving those costs".
Why it matters
Who pays for capacity bought to serve new data centres is the question behind the three items FERC sent back. Every week of delay is a week without the extra capacity PJM says it needs, in a region whose last two auctions already fell short.