Full Breakdown
PJM Proposes Backstop Auction and Data-Center Curtainder Registry to Guard Against Grid Shortfalls
7/29/2026, 12:52:21 AM
Core Action: Backstop Capacity Auction and Curtainder Registry
PJ M Interconnection announced plans to file two proposals with FERC. The first creates a one-time “reliability backstop procurement” auction running Sept 30–Oct 21, with results in December. The second establishes a registry of data centers and other large energy users without on-site generation; under the proposed Interim Resource Adequacy Service framework, such loads could be curtailed beginning June 1 when the system nears emergency conditions. The backstop auction aims to procure additional generation to cover the shortfall identified in PJM’s latest capacity auction.
Background & Context
Data-center construction in PJM’s 13-state footprint has accelerated. PJM estimates new “very large energy customers” will add roughly 70 GW of demand by 2038, while about 15 GW of generation capacity has retired since 2022. In its most recent base-capacity auction, PJM fell about 6.8 GW short of the 20 % reserve margin required for reliability.
Data & Statistics
- 70 GW projected data-center load growth by 2038.
- 6.8 GW shortfall in the latest capacity auction.
- $325/MWh-day price cap in the current auction; PJM plans to raise it to $555/MWh-day for the backstop auction.
- Service area covers 13 states, serving roughly 67 million customers.
- Backstop auction targets roughly 6 GW of additional capacity, adjustable for bilateral contracts or integrated resource plans.
Official Statements & Responses
Paula Conboy, chair of PJM’s Board of Managers, wrote that “the region has reached a critical point in its resource adequacy outlook” and noted “affordability pressures facing consumers.” The board will submit the proposals to FERC before month-end and rely on state regulators to allocate backstop costs across rate classes.
Criticism & Opposition
Joseph Bowring, president of Monitoring Analytics, warned that retaining data-center load in capacity auctions has added $29.4 billion to capacity costs over the last four auctions and that the figure will rise if PJM raises the auction price cap.
Verbatim Quotes
- “The procurement target for the backstop auction is ambitious, but it's nowhere near close enough to what's needed if all this large load shows up,” — Julia Hoos, Aurora Energy Research
- “The region has reached a critical point in its resource adequacy outlook,” — Paula Conboy, PJM Board chair
Why It Matters
If PJM cannot secure sufficient generation, growing data-center load could trigger more frequent emergency measures, raising wholesale prices and threatening reliability for residential and commercial customers. The curtailment framework provides a demand-response tool but shifts the reliability burden to data-center operators lacking on-site generation, potentially prompting costly, polluting on-site solutions.
What’s Next
PJ M expects to file the proposals with FERC before month-end. FERC’s review will decide whether the backstop auction proceeds as scheduled and how the curtailment registry will be implemented. State regulators will later determine cost allocation, influencing future electricity rates across PJM’s service territory.
