The U.S. Department of Energy put unusual weight behind a Federal Energy Regulatory Commission order that has already frozen PJM Interconnection's plan to buy emergency capacity for data centers and other large loads. In a statement of position filed at FERC on Wednesday, 7 October, DOE said PJM should rewrite the cost-allocation pieces of its reliability backstop procurement so that new large loads, not existing households and businesses, pay for the generation built to serve them. PJM told Utility Dive it intends to file revisions by 29 October.
The filing appears to be DOE's first statement of position at FERC in at least five years, Utility Dive reported on 8 October. It lands on a grid operator that failed to clear enough capacity in its last two base auctions and had planned to start a backstop buy of about 6.8 gigawatts for the 2028/29 delivery year before FERC hit pause at the end of September.
What FERC already stopped
On 29 September FERC accepted PJM's reliability backstop proposal, suspended it for five months and opened a paper hearing on three elements: cost allocation, transmission-owner exit rules and load-serving entity collateral. The Commission found other parts of the package just and reasonable, including eligibility, selection, the price cap and the exclusion of Fixed Resource Requirement entities from cost allocation. It also encouraged PJM to skip a long hearing by filing a new section 205 proposal that fixes the three problem areas.
The backstop had been due to begin on 30 September. It grew out of a fast-track stakeholder process aimed at a pending capacity shortfall driven largely by data center demand forecasts across PJM's 13 Mid-Atlantic and Midwest states and the District of Columbia. PJM has said it may lower the 6.8 GW target if new supply reaches the system before the buy.
What DOE added
DOE sided with FERC on cost allocation and tied the rewrite to the administration's Ratepayer Protection Pledge. Under that pledge, the department said, large electric loads, not American households or other business ratepayers, must fund the generation and related infrastructure those projects require. Utilities in the PJM footprint that signed the voluntary pledge include American Electric Power, AES, CenterPoint Energy, Dominion Energy, Exelon, FirstEnergy and PPL.
"PJM should implement the cost allocation and other reforms identified by the Commission to ensure that the costs of serving new data centers or other large electric energy loads are not unfairly shifted to PJM's existing ratepayers," DOE wrote, according to Utility Dive.
The department said PJM's proposed allocation may be unjust and unreasonable because it may not assign costs to the customers who caused them. It backed FERC's call to allocate backstop costs from updated load forecasts and to track whether individual large-load projects enter service, slip, shrink or cancel. Without project-level data, DOE argued, PJM cannot reconcile its base forecast with load adjustments, avoid double counting, cut the backstop target when forecast load fails to appear, or attribute growth to the right zone and load-serving entity. DOE also warned that PJM's tariff may omit large loads already sitting in the baseline forecast, which would scramble who pays.
PJM's calendar
Jeffrey Shields, a PJM spokesman, told Utility Dive on Thursday that the grid operator plans to file a revised proposal at FERC by 29 October rather than wait out the five-month hearing. PJM will hold a special Members Committee meeting on 22 October to consult members on the filing, and it will schedule a special Transmission Owners Agreement Administrative Committee meeting as well.
That timetable keeps the backstop alive as a near-term tool if FERC accepts a cleaned-up cost-allocation design. It also compresses the politics: members that want data centers to carry more of the bill and members that fear collateral or exit rules will have less than three weeks to settle language before the filing goes in.
Why allocation is the fight
Capacity shortfalls and data center forecasts are no longer the disputed facts inside PJM. The disputed fact is who writes the check when the operator buys steel-in-the-ground capacity outside the regular auction. If costs land on zonal load generally, households and smaller commercial customers fund plants built for hyperscale campuses. If costs follow the load additions that created the need, the campuses and their host utilities fund them, and the Ratepayer Protection Pledge has operational meaning.
FERC's September order did not create that tension. It forced it into tariff language. DOE's filing raises the political cost of leaving the tension unresolved. A department that rarely files at FERC has now said, on the record, that a backstop which socializes large-load costs is the wrong answer.
What still sits in the hearing
Even if PJM files on 29 October, two other issues remain live: how transmission owners may exit the arrangement and what collateral load-serving entities must post. FERC opened a section 206 proceeding in parallel so it can impose changes if the paper hearing runs its course. A solid section 205 filing could put that hearing into abeyance. A thin one would not.
For data center developers, the practical stakes are interconnection timing, capacity charges and whether host utilities will sign power deals that pass through backstop costs. For state commissions watching residential bills, the stake is whether the next winter's capacity narrative becomes a rate case. For PJM, the stake is whether it can buy the megawatts it says the 2028/29 year still needs without another rejection.
The same tension is visible outside the tariff docket. State utility commissions in Virginia, Ohio and Pennsylvania have already heard residential advocates argue that data center growth is landing on general rates through transmission upgrades and capacity charges. A backstop that follows load would give those commissions a clearer cost narrative. A backstop that does not would reopen the fight in every rate case that touches PJM capacity charges for the 2028/29 year.
Developers and host utilities also need clarity on timing. A five-month paper hearing pushes any procurement into spring 2027, close to when some campuses expect to energize. A 29 October filing that FERC can accept on a shorter schedule would put steel procurement and interconnection queues back on a clock that matches commercial operation dates. That is why DOE's intervention, late in a process FERC had already framed, still moves the market: it raises the odds that cost causation is written into the next filing rather than deferred again.
What to watch
The 22 October members meeting will show how far cost causation goes in the draft. The 29 October filing will show whether PJM adopted FERC's forecast-tracking recommendations in full. FERC's response will show whether the backstop returns before winter planning hardens. Until then, the 6.8 GW buy remains on ice, and DOE has made clear whose side of the ledger it expects the costs to hit.