Docket No. ER26-3515-000
I agree with the decision to reject the bulk of PJM’s filing for the reasons articulated in today’s order. I write separately to emphasize that, if PJM chooses to refile its proposal, it must justify its proposal to curtail IRAS load on a mandatory basis before load that has voluntarily enrolled in a demand response program. I also urge PJM to carefully consider the consequences any refiled proposal might have on its capacity market.
Customers in a demand response program allow a utility to reduce their demand without resorting to the extreme measure of manually pulling breakers on the utility’s distribution network. Demand response customers also receive payments in exchange for volunteering to reduce their usage when the grid is stressed. This structure is designed to protect consumers and their equipment from the draconian measure of being involuntarily forced off the system, as well as to send efficient market signals based on actual system conditions.
PJM’s filing flips this paradigm, proposing to force IRAS load off the system in the earliest stages of emergency conditions,1 before PJM deploys demand response.2
Moreover, PJM’s proposal would force IRAS load off the system in lieu of sending capacity price signals that are needed to get new infrastructure built. Because PJM would forcibly curtail IRAS load before other firm load, PJM excludes IRAS load from its capacity market demand curve. The result could be a capacity market signaling that PJM has more than enough capacity while the region sheds thousands of megawatts of demand on an involuntary basis. That’s not only economically inefficient, but also likely to prevent supply and demand from coming back into balance.
To be clear, in an emergency, data centers not serving critical functions should be shut off before ordinary customers (Hint: homes, hospitals, and schools should never be curtailed before data centers). We need state regulators to establish clear rules for which customers should be curtailed first when circumstances require it. And we need PJM to be ready to adjust their operations to this evolving paradigm. But such measures should only be taken when necessary to keep the system reliable, after voluntary demand response resources have been exhausted.
For these reasons, I respectfully concur.
- 1That is, during a NERC EEA 1 event.
- 2PJM cleared 7,017 MW of demand response in its most recent capacity auction. See PJM, 2028/2029 Base Residual Auction Report, at 15 (Jul. 14, 2026), https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2028-2029/2028-2029-bra-results-report.pdf.