FERC Rejects PJM's IRAS and BYONC, Keeps the Large-Load Registry — Cost Allocation Moves Back to the States

FERC Rejects PJM's IRAS and BYONC, Keeps the Large-Load Registry — Cost Allocation Moves Back to the States

On October 9, 2026, FERC issued its order in Docket ER26-3515-000 on PJM's August 13 large-load package — and it split the baby. Accepted: the definition of a "Large Load" (50 MW or more at one site) and the Large Load Registry (location, ramp schedule, capacity supply and other details), effective October 12. Rejected: the core of the package — the Interim Resource Adequacy Service (IRAS) curtailment framework, the "bring your own new capacity" (BYONC) option, the new-capacity designation, and the exclusion of eligible new large loads from the 2029/30 capacity auction demand curve. The vote was all five commissioners with no dissent; Commissioner David Rosner wrote a concurrence.

FERC's stated reason was jurisdictional — the mechanism reached into retail ratemaking, which belongs to the states:

"We find that several provisions of the proposed tariff appear to place obligations directly on eligible new large loads, which are, for the most part, retail customers; that certain other provisions appear to dictate which retail customers taking retail service will be curtailed; and that the proposed compensation framework appears to establish a retail rate." — FERC order, quoted by Utility Dive

Commissioner Rosner warned that excluding curtailed large loads from the capacity market would distort it:

"The result could be a capacity market signaling that PJM has more than enough capacity while the region sheds thousands of megawatts of demand on an involuntary basis. That's not only economically inefficient, but also likely to prevent supply and demand from coming back into balance." — Rosner concurrence, via Utility Dive

FERC explicitly punted curtailment priorities to the states: "States have a crucial role to play in this challenge by designating which retail customers must be curtailed when the system is stressed, and we strongly encourage states to continue their important work on this issue.¹" PJM spokesman Jeffrey Shields said the grid operator is reviewing the order "with an eye toward how we can fulfill FERC's requirements while recognizing the responsibilities FERC indicated belong to the states and honoring the concept that existing electricity customers should not be unfairly burdened by new, energy intensive customers."

Market read. Jefferies' note to clients the following Monday: "While there is still uncertainty within PJM's market construct/rules, the latest development is positive for existing generation/IPPs" — i.e., higher capacity prices for longer in PJM, favorable to Constellation, NRG, Talen and Vistra (AI-Power Equity Trade: FERC Tailwind Meets a Regulated-Utility Stampede Into Earnings). Jefferies added any revival of the curtailment concept is "likely led by efforts from states," with Ohio and Pennsylvania the key states to watch — precisely where the large-load tariff dockets are already live (FirstEnergy Proposes Novel Ohio Data Center Tariff Requiring Competitive Retail Supply, Pennsylvania PUC Approves PPL Electric’s Large-Load Tariff and 4.9% Rate Increase).

What it means for the "who pays" map. With IRAS/BYONC rejected, un-backed data-center load is not carved out of the 2029/30 capacity auction for now — so the cost-socialization dynamic the PJM Market Monitor quantified (PJM's Market Monitor Puts a Number on It: Data Centers = 46% of the Last Four Capacity Auctions' Cost) persists, and the federal track for ratepayer protection has stalled at the jurisdictional line (FERC Section 206 Show-Cause Filings: RTOs Propose Landmark "BYONG" and Capacity Market Exclusions). The rejection also moots the open question of whether the Google–Constellation 890 MW of uprates would register as BYONC — the mechanism no longer exists, so that deal stands as pure bilateral contracting (Hyperscalers Fund the Uprates: Google–Constellation's 3.59 GW Deal, Amazon–Calvert Cliffs, DOE's $4.2B Vistra Loan).

Next steps on the docket: PJM's special Members Committee meets October 22; PJM plans to refile its separate Reliability Backstop Procurement plan (suspended by FERC Sept 29 to Feb 28, 2027, with the 6,831-MW shortfall and $555/MW-day cap unresolved — PJM's Reliability Backstop Procurement: FERC Accepts but Suspends — the September Auction Never Happened) on about October 29; the registry compliance filing is due about November 9.