On 25 September 2026 the PJM Transmission Owners and the PJM Area Relevant State Entities Committee told the Federal Energy Regulatory Commission that, after years of talks and a spell with the Commission's own Dispute Resolution Service, they could not agree on who pays for long-term regional transmission across PJM. They have discontinued their discussions. The owners will now file their own cost allocation method by a requested deadline of 19 November 2026, with the states' alternative attached, and PJM wants until 22 December 2026 to file the planning rule changes that depend on whichever method survives. In PJM, FERC's long-term transmission rule has reached the point where planning is largely designed and payment is not.
That gap is sharpest in a footprint this varied. The region covers 13 states and the District of Columbia, and every one of those 14 jurisdictions has its own retail regulator, its own energy policy and its own view of whether it should pay for lines that mostly serve someone else's load or someone else's clean energy mandate. Order No. 1920 was written to make those arguments happen before a project is selected, not after. In PJM they are still happening with no project on the table.
What the rule actually asks for
FERC issued Order No. 1920 on 13 May 2024, then modified it in Order No. 1920-A on 21 November 2024 and Order No. 1920-B on 11 April 2025. The Commission's own fact sheet notes the final rule drew more than 15,000 pages of comments from nearly 200 stakeholders. The planning side is prescriptive. Each region must produce a long-term plan looking out at least 20 years, built on at least three plausible and diverse scenarios, refreshed at least once every five years, and tested against seven specific benefits ranging from production cost savings and reduced losses to avoided reliability projects and mitigation of extreme weather.
The payment side is looser by design. Transmission providers must file one or more default, or ex ante, methods for allocating the cost of selected long-term facilities, and those methods must spread costs in a way that is at least roughly commensurate with estimated benefits. They may not allocate by project type, so the old habit of labelling a line as reliability, economic or public policy and sending the bill accordingly is off the table. States get a six-month engagement period before the compliance filing, which Order No. 1920-A allows to be extended on request. A region may also offer a state agreement process that runs for up to six months after a project is selected, with the default method applying if the states fail to agree.
Order No. 1920-A did two further things that explain the current standoff. It required transmission providers to include in their compliance filing any cost allocation method or state agreement process that the relevant state entities agree on, even if the provider prefers something else, together with the supporting evidence. It also required public disclosure of how the estimated costs of a selected facility will be allocated by transmission pricing zone, alongside a quantification of estimated benefits per zone. The first provision gives states a formal pen in the tariff. The second makes every allocation visible to every state commission and consumer advocate in the footprint.
Why the owners hold the pen in PJM
PJM is unusual because PJM itself does not control cost allocation filings. Its December 2025 compliance filing in Docket ER26-751 spells out that the PJM Transmission Owners have the exclusive and unilateral right to make Federal Power Act section 205 filings on the establishment and recovery of their transmission revenue requirements and on transmission rate design, including Schedule 12. That is why the region split its compliance into pieces. PJM filed its Long-Term Regional Transmission Planning Protocol on 12 December 2025 and asked for a placeholder effective date of 12/31/9998, because implementation could not be fixed until the Commission ruled and the cost allocation rules existed.
The owners have also taken the inclusion requirement to court. The 25 September motion records that they have petitioned for review of the obligation to attach a PARSEC alternative, in Appalachian Voices v. FERC, No. 24-1650 in the Fourth Circuit, argued on 15 September 2026. The owners say that any filing imposing the inclusion requirement before the court rules risks violating their rights under the Federal Power Act and the First Amendment, and reserve the right to act to protect those rights. PJM takes no position. PARSEC disagrees with the owners' claims. The November filing will therefore be made under protest, into a legal framework that could shift beneath it.
What PJM and the states already agreed on planning
The planning protocol itself reflects a deal that deserves more attention than it gets. PJM's filing describes PARSEC as supporting the general framework, and several of its features came directly from the states. Long-term needs are split into Core LT Needs and Additional LT Needs. PJM first builds a Core Plan addressing only Core needs that, as a portfolio, must meet a 1:1 benefit-to-cost ratio. It then builds an All-in-One Plan that adds solutions to Additional needs only where they clear an incremental 1.25:1 ratio. Preliminary selection happens within three years of the start of each cycle, according to the declaration of PJM's Director of Transmission Planning attached to the filing.
Two further elements sit on top. States can opt out of cost allocation for solutions addressing Additional LT Needs, and states and interconnection customers can voluntarily fund projects that did not clear selection. Both features were a condition of PARSEC's support, and both were left incomplete in December 2025 because, in PJM's words, the voluntary funding proposal cannot be finalised until the owners finalise their cost allocation method. The opt-out mechanism was to be the subject of a future PJM filing.
Read together, the planning design already contains a rough allocation logic. Core needs are the shared backbone that everyone is expected to pay for. Additional needs are closer to policy-driven or discretionary transmission, where a state can step back from the bill. What the owners and PARSEC could not settle is how the shared portion is divided among zones, and how much weight the per-zone benefit estimates should carry against simpler load-ratio shares. Those details are not in any public document yet, and the November filing will be the first place both positions are set out side by side.
A timeline of slippage
The extension history is itself informative. The Commission granted extensions to the engagement period and the owners' deadline on 6 February 2025, 17 October 2025, 11 June 2026 and 11 August 2026. In June the Commission made its Dispute Resolution Service available, and the parties engaged it following a notice issued on 10 July 2026. The 4 August motion described the mediated process as productive but unlikely to produce a filing by 11 August. The 8 September motion asked for 15 more days and promised motions to govern by 25 September. PJM, for its part, notified the Commission on 10 September that it could not meet that day's deadline because its remaining obligations depended entirely on the outcome of the talks.
Each step was reasonable in isolation. Cumulatively, PJM is now more than two years past the rule's issue date without a default allocation method on file. None of this is unlawful. It does mean that the first long-term cycle under the new protocol cannot move from scenario work to selection with any certainty about who will carry the revenue requirement.
Where MISO and SPP stand
The contrast with PJM's western neighbours is useful. MISO and SPP both filed regional compliance by 12 June 2026, and their May 2026 joint presentation to the MISO-SPP Interregional Planning Stakeholder Advisory Committee states that their existing long-term planning processes are well positioned for compliance. SPP points to its Coordinated Planning Process and two revision requests approved in April. MISO points to its Long Range Transmission Planning programme.
The interregional deadline for MISO and SPP is 12 December 2026, with a possible extension to 12 February 2027 to align with the Southeastern Regional Transmission Planning region, and the same slide lists 12 December 2026 as the Southeastern region's interregional date with MISO and PJM. MISO and SPP describe the interregional requirements as incremental to existing joint operating agreement processes. That is plausible on paper. In practice, any coordination with PJM will have to be written around a long-term allocation method that has not yet been filed, let alone accepted.
What this means for costs and projects
For state commissions, the open question is exposure. The zone-by-zone disclosure requirement means that whatever method is approved, each state will see its estimated share and its estimated benefit before a line is built. That transparency cuts both ways. It protects states from opaque socialisation, but it also hands every intervenor a number to contest. A method built on per-zone benefits will be more defensible in principle and more litigated in practice than a load-ratio share.
For developers and large loads, the practical consequence is timing. Long-term projects cannot be selected under the new protocol until the allocation method is known, and near-term needs will keep flowing through the existing regional expansion process instead. That is not a crisis, but it biases the system towards shorter, local and reliability-driven fixes, which is precisely the pattern Order No. 1920 was meant to break.
For the owners, the Fourth Circuit case is the pivot. If the court upholds the inclusion requirement, FERC will have both proposals in front of it and can choose. If the court narrows it, the owners' method becomes the only filed default, and PARSEC's leverage shifts back to protests and the state agreement process.
What to watch
Three dates now frame the next quarter. The Commission's response to the 25 September motions to govern will confirm or adjust the 19 November and 22 December deadlines. The Fourth Circuit ruling, whenever it comes, will decide whether the PARSEC alternative is a formal compliance option or an attachment the Commission may disregard. The interregional filings due on 12 December will show whether PJM's neighbours are prepared to coordinate with a region whose long-term payment rules are still unsettled.
The regional planning design in PJM is more developed than the headlines suggest. The states and PJM agreed on scenarios, thresholds, an opt-out and voluntary funding. What broke down is the oldest question in American transmission: who pays. Order No. 1920 did not answer it. It moved the argument earlier, put the states at the table and made the numbers public. In PJM, that has so far produced two proposals and a court date rather than a tariff.