Plain-English framing. PJM is the regional grid operator covering most of the Mid-Atlantic and parts of the Midwest (~65 million people, the largest in the US). Its annual capacity auction — the Base Residual Auction (BRA) — establishes how much new generation gets paid to be available three years out. The 2027/2028 BRA cleared 5.6% below PJM's target reserve margin, meaning PJM doesn't have enough generation lined up. The Reliability Backstop Procurement (RBP) is a one-time emergency mechanism to procure the gap directly: 14.9 GW of new resources. What 'bilateral contracts' means here. Phase I of the RBP (September 2026 → March 2027) lets data centers and load-serving entities negotiate directly with new supply projects — gas plants, batteries, demand response — to lock in capacity contracts. This is a major departure from the normal PJM model where the BRA pools all supply and demand into a single clearing price. Phase II is a central procurement run by PJM if Phase I doesn't fill the gap. The FERC filing this month is what makes the September window real; FERC has to approve the RBP construct before PJM can publish the rules. Why the bilateral window matters for site readiness. Today, a data center developer in PJM has to wait through the standard interconnection-queue process (which has 30,000 MW of backlog) and pay the BRA-cleared capacity price set by the system as a whole. Under Phase I, the developer can contract directly with a new gas plant or battery project that's getting built — locking in capacity at a known price and on a known timeline. The catch: the developer needs to identify the right counter-party supply project (which may not even be in the queue yet) within a 6-month negotiation window.
Primary source · Utility Dive / Latham & Watkins / CBRE / Argus Media / PJM Board Letter May 19 ↗
Why it matters
PJM's RBP is the first concrete example of a data-center-specific capacity mechanism in a US ISO — every other ISO will reference it, copy parts of it, or define themselves against it. Three Cliff-specific moves: (1) The Phase I bilateral-contract window creates a new SKU: 'PJM bilateral counter-party matching' — Cliff already tracks which new generation projects are progressing in the PJM queue, and which data center sites are at which interconnection stage; the new product is the brokerage-grade match. Worth scoping next week whether that's a Cliff feature or a Helix-Digital function (today's note's competitive context). (2) For the regulatory knowledge graph, the PJM RBP filing itself — the actual FERC docket text — is the kind of dense, multi-hundred-page regulatory document where LLM ingestion compounds value: hyperscaler developers will need a structured summary within hours, not the standard 2-week law-firm memo cadence. (3) The FERC RM26-4 ruling (expected end of June) and the PJM RBP filing may end up cross-referencing each other; the wiki needs to track them as linked pages, not separate entries — that linking-of-related-dockets-into-one-narrative is what generic AI assistants can't do well.
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PJM Inside Lines / Utility Dive / Modo Energy / PR Newswire / ROI-NJ / Daily Caller (yournews) ↗
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