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PJM faces Monday FERC tariff deadline

4 min read

09:27UTC

PJM Interconnection must file its revised co-located load tariff with FERC on Monday 18 May, the regulatory precursor to RM26-4-000 and the rules that govern the Loudoun, Fairfax and Prince William corridor.

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Key takeaway

PJM's Monday filing sets the co-located generation template for the Loudoun corridor and signals RM26-4-000's June direction.

PJM Interconnection, the regional grid operator covering thirteen states from Illinois to North Carolina, must file its revised co-located load tariff with FERC (Federal Energy Regulatory Commission) on Monday 18 May. The filing follows FERC's 16 April order, which accepted PJM's reformed interconnection pathway but rejected the operator's redefinition of co-located load and its attempt to alter behind-the-meter rules ¹. The deadline is the immediate regulatory step before RM26-4-000, the main rulemaking on loads above 20 MW that FERC pledged to act on by end-June .

The specific question PJM must answer is technical but consequential: when a generator (typically a gas turbine or a battery system) sits on the same campus as the data-centre load it serves, how is that arrangement classified for tariff purposes? PJM's preferred definition would have allowed a wider category of behind-the-meter configurations; FERC ruled the definition would let load avoid contributing to grid costs in ways the commission was not prepared to accept. The new filing has to thread between the FERC objection and the operating reality of the Loudoun cluster, where co-located generation is already being designed into 2027-2028 builds.

The stakes sit directly on the Loudoun, Fairfax and Prince William corridor that PJM serves. Operators designing campuses there now face a planning environment where rezoning has narrowed (the Digital Gateway abandonment closes one path, Fairfax's new rules write a tighter one) at the same time as the federal tariff language defining their preferred behind-the-meter configurations is being rewritten. The 18 May filing is the document the colocation engineers in that corridor will read on Tuesday morning to find out which configurations remain viable. RM26-4-000 then becomes the federal template against which ERCOT, CAISO and MISO will be benchmarked over the second half of the year.

Deep Analysis

In plain English

PJM Interconnection manages the electricity grid across 13 US states, from Illinois to North Carolina, including the area around Washington DC where most of America's data centres are located. It had to file new rules with the federal electricity regulator, FERC, by Monday 18 May about how data centres can use their own on-site power generators rather than drawing from the public grid. This matters because the rules determine how much data-centre operators pay toward the costs of the public grid. If they generate their own power on-site, they might avoid contributing to those costs, which could mean other electricity customers pay more. FERC partially rejected PJM's previous attempt to define these arrangements, and the 18 May filing is the revised attempt.

Deep Analysis

Root Causes

Co-located generation inside a hyperscale fence is driven by a single structural constraint: grid interconnection timelines. A campus operator that can commission its own gas turbines or battery arrays in 18-24 months, against a grid connection timeline of 5-15 years in PJM territory, has a powerful economic motive to develop behind the meter rather than wait for grid power.

FERC's resistance to PJM's preferred definition of co-located load is a cost-allocation defence: if behind-the-meter generation does not contribute to transmission costs, the grid-connected load that does pay for the grid subsidises the behind-the-meter operator.

The Loudoun corridor context makes the cost-allocation question acute. Loudoun County hosts the world's densest data-centre cluster; the transmission infrastructure that serves it was built at ratepayer cost. A tariff that allows new campuses to co-locate generation without contributing to those sunk costs shifts the cost recovery burden further onto residential and commercial ratepayers already paying for infrastructure the industry helped necessitate.

What could happen next?

Consequence
PJM's 18 May filing sets the co-located generation template for the Loudoun corridor; if FERC accepts it, data-centre operators can file campus-level generation plans with commissioning in 2027-2028 against a confirmed tariff structure.
Short term · 0.75
Risk
If FERC rejects PJM's second filing, the RM26-4-000 timeline slips into late 2026, leaving operators in PJM territory in regulatory uncertainty for campus builds already in the design phase.
Short term · 0.65
Precedent
The RM26-4-000 final rule, expected by end-June, will be the federal template against which CAISO and MISO file their own co-located load tariffs in H2 2026.
Medium term · 0.8

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: FERC Order 888 in 1996 opened transmission access to competitive generators in the same way RM26-4-000 is attempting to standardise co-located load access.

Order 888 required a 12-month compliance filing cycle from all regional transmission organisations; the transmission access framework it created was then litigated for seven years before reaching stable interpretation. The RM26-4-000 proceeding is likely to follow the same multi-year trajectory regardless of what PJM files on 18 May.

Counter-parallel: The 2020 FERC Order 2222 on distributed energy resources, which allowed batteries and solar aggregations to participate in wholesale markets, was implemented by PJM in under 18 months, faster than Order 888, because the financial incentives for rapid compliance were stronger.

Data-centre operators have comparable financial incentives for rapid RM26-4-000 compliance: a campus with a confirmed co-located generation arrangement can displace $50-100m per year in grid-sourced power costs.

PJM's territory covers the corridor from Illinois to North Carolina that contains the largest concentration of US hyperscale load. The tariff language PJM files on 18 May determines whether a gas turbine, battery array or on-site solar installation sitting inside a data-centre campus fence can be classified as co-located load, allowing it to avoid standard interconnection charges.

At $30-50m per year in avoided interconnection fees for a 500 MW campus with co-located generation, the tariff classification is worth $300-500m over a ten-year lease term. GE Vernova's 80 GW gas-turbine backlog is partly predicated on this economics: operators planning behind-the-meter gas in PJM territory need the tariff to confirm co-location before they commit to turbine orders that add to GE Vernova's already full book.

Consensus view: Mayer Brown's energy regulatory practice identifies three unresolved questions in the FERC RM26-4-000 proceeding that the PJM 18 May filing must begin to answer: whether hyperscalers can bypass standard interconnection studies when their generation is co-located, how behind-the-meter solutions are treated for cost allocation, and who pays for transmission upgrades triggered by loads above 20 MW.

PJM's April submission attempted to resolve the first by broadening the co-location definition; FERC's rejection of that definition sends the filing back with the cost-allocation question still open.

Counter-view: The IEA's Data Centres and AI Energy report (April 2026) notes that the US has four distinct grid operators handling hyperscale data-centre load, and FERC's RM26-4-000 template will apply to PJM's territory but not to ERCOT (which operates under a Texas state charter exempt from FERC jurisdiction) or to CAISO and MISO, which will need parallel rulemakings.

The PJM tariff is a leading indicator for the national framework, not the framework itself; ERCOT's non-FERC status means the largest alternative US siting geography operates under entirely different rules.

Key tension: Whether FERC's end-June RM26-4-000 NOPR (Notice of Proposed Rulemaking) resolves the cost-allocation question that PJM's filing left open, or whether the rulemaking proceeds to a 60-day comment period that delays the final rule into late 2026.

Sources:National Law Review

Mentions:FERC →ERCOT →Mayer Brown →Texas →Illinois →Washington →North Carolina →Prince William County →FERC Docket RM26-4-000 →Loudoun County DC cluster →Fairfax County →CAISO →MISO →PJM Interconnection →

First Reported In

Update #3 · OpenAI cuts $800bn; rivals double down

National Law Review· 16 May 2026

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Causes and effects

Caused by

FERC commits to June 2026 grid-load order

FERC's pledge to act on RM26-4-000 by end-June established the PJM 18 May filing deadline as the immediate regulatory precursor.

Occurred 16 Apr 2026

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This Event

PJM faces Monday FERC tariff deadline

How PJM defines co-located load in this filing determines whether a power generator can sit inside a data-centre fence in the densest US hyperscale corridor, or has to sell into the grid on the other side of the substation.

Led to

DOE lets PJM switch off data centres

PJM's 18 May FERC deadline for its revised co-located load tariff was superseded by the emergency curtailment order issued the same day, which ran counter to operators' lobbying position under RM26-4-000.

Occurred 18 May 2026

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PJM warns 13 governors on grid costs

PJM's 18 May FERC tariff-filing deadline preceded the board letter and is part of the same co-located load regulatory sequence the September Backstop addresses.

Occurred 19 May 2026

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FERC delays its grid rule to 2027

Co-location terms, the same issue PJM was ordered to file on in May, are one of five areas covered by the June show-cause orders

Occurred 18 Jun 2026

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Different Perspectives

Global hyperscale operators

Operators are still filing gigawatt-scale campuses and Meta is proceeding with its $10bn Lebanon, Indiana site despite the county-level bans nearby, betting Q2 capex outruns the patchwork of restrictions. Industry framing casts New York's freeze, Oregon's surcharge and Indiana's bans as taxes and levies that push build-out toward faster-permitting jurisdictions such as India and the Gulf.

EirGrid

EirGrid set a 900 MW instantaneous demand-loss ceiling because a single voltage dip can trip many data centres onto backup power at once, risking imbalance above 1,150 MW. It wrote the limit into a standing procedure rather than waiting for an emergency to force one.

US host communities and ratepayers

Prince William residents backed the 8-0 denial of Dulles South over the Occoquan watershed, drinking water for eight million people, while Oregon's approved tariff cuts residential bills 1.3% by charging large loads 29% more. Their position: consent and cost-attribution belong in law, not left to a developer's or a utility's discretion.

Hassan Allam Digital Infrastructure

Hassan Allam Digital Infrastructure, an Egyptian conglomerate rather than a foreign hyperscaler, reportedly secured a domestic hyperscale licence with a $400m first phase, per single-source reporting still to be verified. It reads as home-grown sovereign compute ambition, building national capacity rather than importing a US or Gulf operator's campus.

Damac Digital

Damac Digital keeps building toward roughly 6,000 megawatts of hyperscale capacity across 13 countries while Virginia taxes power and New York weighs a freeze. Every dollar or month of delay a US state adds is capacity a Gulf developer can site somewhere with faster permitting and no equivalent levy.

Acequia communities, Santa Fe County

Santa Fe County commissioners voted unanimously on 2 July to freeze any data centre over one megawatt, citing the acequia irrigation commons that has shared scarce water since Spanish colonial rule. They expect the low threshold to draw the same Fifth Amendment challenge RCM Hill brought against Hill County, Texas.