PJM's Order 1920 Cost Allocation Impasse: Two Proposals, One Tariff and a Pending Fourth Circuit Ruling
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. 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. 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. 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. 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.
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. The planning protocol itself reflects a deal that deserves more attention than it gets. 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. The regional planning design in PJM is more developed than the headlines suggest.