PJM's Reliability Backstop Procurement: FERC Accepts but Suspends — the September Auction Never Happened
PJM's Reliability Backstop Procurement (RBP) — the one-time mechanism to close the 6,831.3-MW shortfall left by the 2028/2029 Base Residual Auction (which cleared at the $325/MW-day price cap) — was accepted but suspended by FERC on September 29, 2026. Per PJM, FERC identified "three discrete issues requiring further consideration" and suspended the tariff for five months, to an effective date of February 28, 2027, subject to refund and the outcome of further proceedings. The procurement, originally set to open September 30, 2026, will not begin on schedule; PJM said "actual timing is to be determined."
Key parameters of the suspended mechanism: resources procured under contracts of up to 15 years, with a weighted-average cost cap of $555/MW-day. The 2028/2029 delivery year the procurement exists to cover begins June 1, 2028 — and the in-service deadline for procured resources is June 1, 2032. As America's Energy News put it:
"A contract that can deliver as late as 2032 covers the back half of a shortfall that opens in 2028."
FERC sent the questions that matter most — who pays and what collateral gets posted — to a paper hearing in Docket EL26-108, including whether units scheduled to retire before 2032 may offer and at what rating.
Meanwhile the underlying capacity shortage persists: Talen Energy cleared 10,180 MW in the 2028/2029 BRA for approximately $1,208 million of capacity revenues (per Talen's announcement, reflected in its market view) — consistent with clearing at the $325/MW-day cap. And PJM's companion IRAS/BYONC framework (Docket ER26-3515-000), which would treat un-backed new large loads as interruptible and exclude uncovered large-load demand from the capacity demand curve beginning 2029/2030, remained pending at FERC as of Oct 7; PJM asked for effectiveness no later than Oct 12 so the rules could apply to the 2029/2030 auction beginning in December (Hyperscalers Fund the Uprates: Google–Constellation 890 MW, Amazon–Calvert Cliffs, DOE's $4.2B Vistra Loan).
What it means: the ratepayer-protection architecture (backstop + IRAS/BYONC) and the physical shortfall are now on decoupled clocks — the shortfall starts June 2028, the backstop can't take effect until Feb 28, 2027 at the earliest, and procured capacity can arrive as late as 2032. That gap is exactly the window in which PJM's capacity prices stay pinned at administrative caps while the reliability risk accumulates (PJM's Market Monitor Puts a Number on It: Data Centers = 46% of the Last Four Capacity Auctions' Cost, FERC Approves PJM Capacity Price Collar Extension through 2030 to Protect Ratepayers).