On February 23, 2026, PJM Interconnection, L.L.C. (PJM) submitted a compliance filing in response to an order issued in December 2025 by the Federal Energy Regulatory Commission, which directed PJM to facilitate and clarify the manner in which data centers and other industrial large loads with on-site generation can operate while maintaining grid reliability.1 The filing outlines substantial revisions and additions to the PJM Open Access Transmission Tariff governing Behind-The-Meter Generation (BTMG) associated with load growth due to the rapid expansion of artificial intelligence.
This filing coalesces before FERC the various proceedings regarding co-located load in PJM and, by the requested effective date of July 31, 2026, will aim to deliver some certainty to investors and developers.
In recent months, PJM and the Commission have prioritized developing and incorporating new Tariff provisions and grid services due to unprecedented load forecasts emerging in the Mid-Atlantic region. Stemming mostly from hyperscale data center development, a recent analysis by Wood Mackenzie indicates that electric utilities within the PJM footprint collectively forecast 55 gigawatts (GW) of new large load growth by 2030 and 100 GW by 2037.2 To some degree, these aggregated figures may include speculative "phantom" load, as developers sometimes submit identical interconnection requests across multiple utility study queues to hedge against localized transmission constraints.3 The Wood Mackenzie report highlights a potential supply-demand mismatch, noting that PJM utilities have committed to serve twice as much new large load demand as the region has planned new power generation to support it.
In November 2025, Monitoring Analytics, the independent market monitor for PJM (IMM) argued that all new data centers and large loads should be required to bring their own (new) generation with locational and temporal operating characteristics that match their load profile.4 As the principal economic analyst for PJM, the IMM has often signaled that load forecasting in PJM has been insufficient, and that by obligating new large loads to cover their own generation, the system would not be adversely affected if a planned data center did not materialize. The following graph illustrates PJM's changing load forecast in 2024 and 2025, respectively.
Despite exponential interest in artificial intelligence and infrastructure necessary to bolster its growth, regulatory clarity has not kept pace. The Commission initially rejected, in late 2024, an Interconnection Service Agreement related to a co-location proposal of up to 480 megawatts (MW) of data center load at an existing nuclear facility in Pennsylvania,6 finding that the proposal lacked sufficient justification and risked shifting significant transmission costs to retail ratepayers.
The Commission consolidated two existing dockets in February 2025 and initiated a proceeding to evaluate regulatory issues associated with the co-location of data centers and generating facilities in PJM. Please refer to our prior article for additional context: FERC orders review of co-located generation for data centers in PJM | White & Case LLP.
In the Co-Located Load Show Cause Order issued in December 2025, the Commission invoked section 206 of the Federal Power Act (FPA) to find PJM's existing Tariff unjust and unreasonable due to a lack of standardized rules for large-scale BTMG configurations. As a result, the Commission ordered PJM to create a transparent framework for netting generation against load and to implement transmission services that ensure co-located facilities pay for their actual grid utilization. The order instructed PJM to formulate distinct interim and firm service options that allow co-located loads to cap their energy withdrawals, thereby shielding standard ratepayers from undue cost-shifting, and adjust their Capacity Interconnection Rights (CIRs) to accurately reflect their reduced net injection capabilities when serving on-site demand.
The regulatory framework detailed in the PJM compliance filing originates from its Critical Issue Fast Path (CIFP) stakeholder process on Large Load Additions, initiated in August 2025. Following a stakeholder impasse over components of the proposal, including on load forecasting and cost allocation, the PJM Board of Managers issued a Decisional Letter in January 2026 setting forth six principles on how PJM would approach large load additions.7 These principles include load forecasting improvements, the creation of a Bring Your Own Generation (BYOG) expedited track, the reliability backstop procurement, and a holistic review of PJM's market in 2026, particularly from the investment perspective. The Board also defined a large load as an individual addition of 50 MW or more at a single Point of Interconnection, though utilities may request consideration of <50 MW additions on a case-by-case basis.
The resulting framework creates two primary regulatory pathways:
As part of the multi-pronged approach originally launched by the CIFP, and building directly on the Board Decisional Letter, PJM submitted a proposal on February 27, 2026 to establish an Expedited Interconnection Track (EIT) for generating facilities.8 PJM requested that the Commission approve this process to accelerate and streamline the interconnection of new generation that has committed to firm commercial in-service dates and is supported by the primary siting authority, or executive officer, in the state in which the facility is to be located. In the proposal, PJM indicated the EIT process would consider up to 10 interconnection requests per calendar year for large new (or uprated) capacity resources. If implemented, PJM would aim to execute Generator Interconnection Agreements for the designated facilities in approximately 10 months. PJM requested that the Commission issue an order on the EIT proposal by May 28, 2026, so the proposal would be effective by July 31, 2026.