A NEWSLETTER FROM ADVANCED ENERGY UNITED | | |
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Navigating PJM’s landscape is increasingly complex with big stakes, as decisions made at PJM impact state policies, energy reliability, affordability, and energy goals. Interconnection bottlenecks, shifting capacity market dynamics, and ongoing regulatory debates at FERC and PJM all shape the future of state energy markets.
To ensure state leaders can remain ahead of these critical issues, Advanced Energy United has launched PJM Insights for State Leaders—a monthly bulletin designed to keep policymakers, regulators, and stakeholders informed on the latest developments in PJM. |
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Governors Hosted Historic 13-State Summit on PJM Reforms
On September 22, Pennsylvania Governor Josh Shapiro hosted a first-of-its-kind PJM Energy Summit, bringing together representatives from all 13 PJM states alongside regional stakeholders to address growing concerns over reliability, affordability, and the role of states in PJM governance.
Key Takeaways from the Summit: |
- Governors are frustrated with PJM, to the point of considering leaving.
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Governor Shapiro opened the summit with a clear message: |
“If PJM refuses to change, we will be forced to go in a different direction, that is not a path that I am eager to chart, but I am not willing to stand idly by and let PJM dictate our future.” Shapiro went on to urge that reforms should give states a larger role in PJM decision-making in “months, not years.” |
Virginia Governor Glenn Youngkin echoed the sentiment, stating that Virginia was prepared to exit PJM if changes were not made. Governors Murphy (NJ) and Moore (MD) also spoke via video, each calling for a rapid and radical structural reform at PJM and an active voice in PJM policy and decision-making going forward. |
- There are many (sometimes competing) ideas to fix the challenges the region faces.
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Several panels of PJM experts outlined the region’s most pressing challenges and explored potential solutions to improve resource adequacy, affordability, and long-term planning. While ideas varied, there was broad agreement on the urgency and complexity of needed reforms—and the critical role states must play in shaping PJM’s future. |
- 11 states will continue formal collaboration.
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At the end of the summit, Jacob Finkel, a Shapiro aide, announced that a subset of PJM states plan to form a “governors’ collaborative to work on PJM issues going forward. The states currently involved are Delaware, Illinois, Indiana, Maryland, Michigan, Ohio, Pennsylvania, New Jersey, North Carolina, Tennessee, and Virginia. |
The summit followed a September 10 letter to PJM’s board where a bipartisan group of governors called for enhanced state representation at PJM, an increased focus on consumer interests, and reforms to the grid operator’s stakeholder processes.
NOTE: Advanced Energy United provided a memo to PJM governors in advance of the summit, offering recommendations on actions states can take to ensure resource adequacy and manage costs for ratepayers. |
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Key PJM Updates & Policy Developments |
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PJM Confirms Two New Board Members, with CEO Announcement Expected Soon
On September 25, PJM Interconnection announced that its members have elected Robert Ethier and Dr. Le Xie to serve three-year terms on the Board of Managers, effective immediately. The seats were vacated in May, when PJM members unexpectedly voted not to reappoint former Board Chair Mark Takahashi and Terry Blackwell. -
Robert "Bob" Ethier has over 30 years of experience in electricity markets, market operations, and planning. He currently advises the New England States Committee on Electricity as well as other groups on planning and market design issues. Additionally, Ethier spent time as an executive at ISO New England.
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Dr. Le Xie is the Gordon McKay Professor of Electrical Engineering at Harvard John A. Paulson School of Engineering and Applied Sciences. He co-founded and leads the Power and AI Initiative, and his research focuses on the intersection of artificial intelligence and power systems to advance sustainable and efficient energy solutions. His industry experience includes roles at ISO-New England and Edison Mission Energy Marketing and Trading.
How We Got Here: - The seats filled by Ethier and Xie were vacated earlier this May when PJM members unexpectedly voted not to reinstate former Board Chair Mark Takahashi and Terry Blackwell.
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States have taken an active interest in the open seats, with nine governors writing to implore PJM to appoint Board members that would “instill a new, more collaborative and more effective ethos at PJM”.
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Governors Shapiro and Younkin wrote separately to endorse former FERC Chair Mark Christie and FERC Commissioner Allison Clements to fill the two empty seats. PJM rejected this recommendation, explaining that the process for electing Board members is set forth in the FERC-approved PJM Operating Agreement and is controlled by an eight-person Nominating Committee that nominates candidates to the membership of PJM to be voted upon.
Ethier and Xie now join Matthew “Matt” Nelson, who was elected to the Board earlier this year, bringing PJM’s Board back to full capacity. With the Board now fully seated, PJM is expected to name a new CEO to replace Manu Asthana, who will step down in December. |
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| PJM Releases Revised Critical Issue Fast Path (CIFP) Proposal on Large Load Additions (LLA)
By letter, the PJM Board of Managers initiated the Critical Issue Fast Path (CIFP) stakeholder process on August 8 to explore reliability-focused solutions for integrating large load additions quickly and securely, without compromising resource adequacy across the region. The Board aims to develop a FERC filing by December 2025, with the proposal intended to take effect for the 2028/2029 Base Residual Auction, scheduled for June 2026.
PJM presented its initial proposal under the Critical Issue Fast Path (CIFP) process at the September 15 stakeholder meeting and received nearly 200 pages of comments. Many stakeholders expressed strong opposition to the proposal’s centerpiece—a provision that would have placed certain large loads under mandatory Non-Capacity Based Load (NCBL) status, subjecting them to curtailment during periods of resource adequacy constraints.
At the September 25 Members Committee meeting, outgoing CEO Manu Asthana announced that PJM would withdraw the NCBL proposal and bring forward a revised version at the October 1 CIFP meeting.
PJM has since released an updated proposal for integrating large load additions. The revised plan includes three major updates: -
Removal of Mandatory NCBL Concept: PJM withdrew its proposal to mandate certain large loads as Non-Capacity Backed Load (NCBL), which would have subjected them to curtailment before demand response resources. The NCBL concept will remain as a voluntary option through existing demand response and price-responsive demand programs.
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Load Forecasting Enhancements: PJM is proposing a new state commission review step for large load adjustments. Electric distribution companies (EDCs) will also be required to submit information on duplicate load requests to avoid double-counting. PJM is further considering a financial security requirement for large customers based on their capacity obligations.
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Expedited Interconnection Pathway for Sponsored Generation: PJM has proposed a 10-month expedited interconnection queue pathway for state-sponsored, shovel-ready resources that meet high eligibility criteria. This expedited path would complement PJM’s existing State Agreement Approach (SAA).
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PJM to Refile FERC Proposal to Enhance Capacity Interconnection Rights (CIR) Transfer Efficiency
In January, PJM filed a proposal at FERC outlining how it would assess transmission needs for transferring Capacity Interconnection Rights (CIRs) from retiring generation to replacement resources. The proposal aimed to improve process efficiency and clarify that it applies to all energy-injecting capacity resource types. While the filing received broad stakeholder support, FERC rejected it on August 8. FERC’s order signaled that an improved version would likely be approved, and PJM plans to submit a revised proposal to FERC in October. If accepted, the pending filing would help enable seamless replacement of retiring fossil fuel plants with new resources, including renewables and batteries.
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Updates on Ongoing PJM Proceedings |
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FERC Order 1920 Transmission Planning Compliance Update
PJM has reached an agreement with the PJM Area Relevant State Entities Committee (PARSEC) on a draft compliance plan for FERC Order No. 1920, specifically addressing Section III: Long-Term Regional Transmission Planning (LTRTP). The agreement outlines PJM’s proposed process and identifies opportunities for state involvement.
The draft compliance plan includes steps for: - Developing long-term planning scenarios
- Conducting analysis to identify transmission needs
- Advancing identified needs into a competitive solicitation window
- Evaluating and selecting projects to address those needs
While planning coordination is moving forward, PJM states have not yet reached an agreement on cost allocation, which is due to FERC by the end of the year. States have jointly filed for a six-month extension, and there is speculation that PJM may also request an extension on its own compliance filing, depending on how FERC responds to the states’ request.
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PJM Sub-Annual Capacity Markets Senior Task Force (SACMSTF) Work Underway
PJM has convened a new Sub-Annual Capacity Markets Senior Task Force (SACMSTF) to evaluate pathways for implementing a sub-annual capacity market—an approach many stakeholders believe could improve market efficiency and lower costs. The task force was initiated in response to an issue charge from the Pennsylvania Governor’s Office, submitted as part of a July 2025 update, which called for accelerating PJM’s transition away from annual-only capacity constructs. PJM has hired The Analysis Group to evaluate a sub-annual market. The first SACMSTF meeting was held on September 19, with a focus on education on sub-annual constructs in other regions. The next scheduled meeting is on October 29.
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The Federal Energy Regulatory Commission is an important independent agency that regulates interstate transmission of electricity, natural gas, and oil. As the agency that oversees regional transmission authorities such as PJM, it is important to know what FERC is working on and how this may impact consumers in your state. Read more FERC PJM Insights below: |
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Leadership Turnover at FERC
Following the departure of former FERC Chair Mark Christie in August, Commissioner David Rosner has been elevated to Chair and led his first monthly Commission meeting on September 18. Two pending nominees—Laura Swett and David LaCerte—were advanced by the Senate Energy and Natural Resources Committee in September, largely along party lines. Their nominations now await full Senate confirmation. |
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Chair Rosner Requests RTO Perspectives on Load Forecasting
Following FERC’s September open meeting, Chair David Rosner sent a letter to the nation’s Regional Transmission Organizations (RTOs), including PJM, seeking input on how to improve load forecasting practices in light of rapidly increasing electricity demand from large new loads. The letter emphasizes the need for better planning tools to anticipate generation and transmission needs driven by surging demand from data centers, electrification, and industrial growth.
Chair Rosner requested that RTOs respond to three key questions: - What current practices are in place for load forecasting, and how are they evolving to account for new demand types?
- What challenges do RTOs face in forecasting large load additions, particularly in terms of coordination with state and local authorities?
- What can FERC do to support or encourage improvements in load forecasting and coordination?
The request is part of an effort to establish best practices and identify areas where Commission support can help modernize forecasting methods across regions. | |
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EL25-63-001 – PJM Requests Rehearing on FERC’s Martin 2 Interconnection Order
On September 18, PJM filed a request for clarification—or, alternatively, rehearing—of FERC’s August 7 order partially granting a complaint by Savion, LLC regarding the Martin 2 solar project. The August order allowed Savion to suspend remaining interconnection work under the project’s suspension clause, ruling that final activities like protection settings and testing qualify under the clause. However, the Commission declined to set a fixed suspension period or revise project milestones.
PJM’s filing asks FERC to: - Clarify that suspension clause applications must be assessed on a case-by-case basis, and
- Confirm that the August ruling applies only to the unique facts of this project.
If clarification is denied, PJM requests a full rehearing and reversal of the decision. PJM argues that the ruling: -
Incentivizes project developers to split projects and hoard transmission capacity
- Conflicts with recent Commission precedent discouraging unused capacity
- Lacks substantial evidence that remaining work exists (noting AEP confirmed construction is complete)
- Mischaracterizes Martin 2 as a two-phase project despite clear contractual language to the contrary
The case raises broader implications for how project suspensions are interpreted under the PJM Tariff and could impact queue management across the region. |
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ER24-98-002 – FERC Partially Grants Rehearing on PJM Capacity Market Reforms
On September 18, FERC issued an order partially granting rehearing of PJM’s February 2024 capacity market reform filing. While the Commission reversed its earlier rejection of PJM’s proposal to eliminate the physical non-performance penalty for Fixed Resource Requirement (FRR) entities, it ultimately upheld the broader rejection of the filing due to non-severable elements.
What Changed: -
FRR Penalty Option Reconsidered: FERC reversed its prior decision on PJM’s proposal to eliminate the physical non-performance penalty option for Fixed Resource Requirement (FRR) entities. The Commission now agrees that this penalty structure—while intended to maintain flexibility—could “severely mute incentives” for FRR entities to perform during system stress events resulting in inconsistent treatment across capacity resources.
What Remains Rejected: - Offer Cap Reform Denied: FERC reaffirmed its rejection of PJM’s proposal to allow certain resources to calculate market seller offer caps based solely on incremental capacity costs, without accounting for energy and ancillary services revenues. The Commission found this would undermine price discipline and distort market signals.
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Market Monitor Role Clarified: The order reaffirms that PJM retains final authority over mitigation decisions and offer reviews—consistent with Order No. 719—while the Independent Market Monitor continues to serve as an advisor for market power concerns.
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Future Flexibility Preserved: FERC also set aside prior language that might have constrained PJM from proposing alternative unit-specific review mechanisms in future filings.
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Market Monitor and PJM Urge FERC Action on Affirmed Energy Collateral Dispute
On August 22, PJM and American Efficient submitted a joint letter to FERC urging expedited action on several unresolved proceedings involving Affirmed Energy LLC and its affiliates. The letter warns that prolonged regulatory uncertainty is escalating risks for both parties and threatens PJM’s ability to administer its energy efficiency programs for the 2025/2026 delivery year.
At the center of the dispute is PJM’s retention of significant collateral posted by Affirmed to secure capacity market performance obligations. PJM defends the hold as a necessary safeguard given concerns about Affirmed’s creditworthiness and risk of insolvency. Affirmed, by contrast, argues that the withheld funds pose an existential threat to its operations. The letter references four active dockets: -
EL24-124 – Collateral complaint
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EL24-113 and EL25-87 – Market Monitor complaints against energy efficiency sellers
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IN24-2 – Penalty proceeding against American Efficient
Both parties are seeking near-term Commission action to resolve the disputes and provide regulatory clarity ahead of the next delivery year. |
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Upcoming Events & Opportunities |
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Meeting: Organization of PJM States, Inc. (OPSI) Annual Meeting
October 6–7 | Washington, D.C. OPSI’s annual meeting this October will bring together state leaders, regulators, and market participants to discuss emerging trends and challenges in the PJM region. -
Speaker Nominations: Individuals or parties that wish to participate as panelists can contact OPSI Staff members: Greg Carmean, greg@opsi.us and Ben Sloan, ben@opsi.us
- Register to Attend: Individuals interested in attending the October meeting can register here.
Discussion topics will include: - Data Center Load Growth: Is further adaptation at the wholesale level needed?
- How can PJM Add Generation More quickly?
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2026/27 Base Residual Auction: What’s next?
- Beyond Second-Generation Capacity Markets: What does the future hold?
- Transmission Planning Under Order 1920: Is the stage set, or is there more work to do before the first cycle?
- From the Top: How have executive orders, DOE actions, and changes in federal law impacted wholesale markets?
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Featured Reports & Resources |
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Resource: Gridlock to Growth – A State Policy Resource on Regional Transmission
Advanced Energy United | 2025
While much of the transmission discussion focuses on state actions to build a reliable and affordable grid, many of the most significant decisions happen at the regional level through Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). GridlocktoGrowth.org is a new resource designed to help state lawmakers engage effectively with their RTOs and ISOs.
The site features: - Downloadable fact sheets for each transmission planning region
- An overview of FERC and its role in transmission planning
- Policy recommendations for state leaders seeking to address transmission challenges
Explore GridlocktoGrowth.org and share it with colleagues to help advance solutions to regional transmission barriers. |
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Report: DOE’s Resource Adequacy Report – A Recipe for Policy Failure
Advanced Energy United | 2025
As PJM and other organized markets work to ensure reliability under rising demand, a new U.S. Department of Energy report has sparked concern among stakeholders. In their recent blog post, Advanced Energy United argues that the DOE’s Resource Adequacy Report risks misguiding policy by favoring fossil fuel-based capacity over modern, flexible, and cost-effective solutions.
Key concerns include: - Overstating the reliability of aging fossil resources
- Ignoring market-ready technologies like demand-side flexibility and storage
- Undermining affordability and decarbonization goals across the PJM region
United calls for a more balanced approach to resource adequacy that reflects current market realities and supports clean, reliable, and affordable outcomes for consumers. Read the blog post here. |
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