E-1: PJM Co-location Proceeding, Docket Nos. EL25-49-000 et al.
I’m glad for the chance to vote on E-1 today. As I emphasized in my comments at this table three months ago, this matter—clarifying just and reasonable transmission services in PJM to protect consumers and unleash the power of co-located load configurations—deserves our clear-focused attention. Thank you, Chair Swett, for making this order a top priority under your leadership, and to my other colleagues for your collaboration as we worked toward this unanimous order. Thank you to PJM and all who contributed thoughtful and nuanced comments to the record. Most important, thank you to the staff team and my and my colleagues’ advisors who added their innovative ideas to this collaborative effort and whose countless hours working through so many technical and legal details brought today’s order into the world.
This 5-0 order speaks for itself. So I will highlight just a few points. As a nation and an industry, we are grappling with unprecedented demand growth. Today the Commission votes to help assist co-located arrangements quickly and flexibly interconnect to meet some of that demand in PJM. Co-located arrangements can be an important mechanism for faster interconnection to the system and have the potential for fewer network upgrade needs than a front-of-meter-option. In short, when done right co-location can be both a consumer-forward tool and a critical avenue in meeting our national imperative of speed to power and winning the AI race.
FERC is not the only player when it comes to clarity and regulatory certainty around co-located configurations. Today’s order builds on a bedrock appreciation for the States and others for their important roles and ongoing efforts in this space. But it also recognizes FERC’s duty to act through our oversight of the interstate transmission system to ensure orderly development in PJM that protects reliability and fair cost allocation for all ratepayers.
One of my key principles as I’ve worked through this order with my colleagues has been bringing to bear as much flexibility as responsibly possible to harness the speed and value-adds that various co-located configurations can provide. So today’s order chooses an options-based approach over one-size-fits-all solutions. Put simply, we’re doing something new.
Specifically, the Commission is directing PJM to develop new transmission services for co-located arrangements. These services go beyond traditional front of the meter transmission service options. We are providing new tools that did not exist before, allowing co-located arrangements to choose the pathway that best fits their business model. We are creating multiple possibilities for loads to decide how much flexibility and firm service are right for them. In short, FERC is meeting the urgent demand for speed to power by creating flexibility for a rapidly evolving industry without sacrificing reliability or affordability.
That last part is—of course—much easier said than done. Enabling the significant benefits co-located arrangements can offer also requires full attention to system reliability concerns, appropriate rate structures, and potential unintended consequences. Today’s order makes significant progress in these areas.
On reliability, the order emphasizes the system protections necessary to make sure co-located systems can opt into the new transmission services only if they are electrically capable of maintaining the limits those services entail. It also makes clear that curtailability may at times be part of the bargain for more flexibility. In other words, if co-located load chooses not to be network load, that choice needs to be enforceable.
On affordability, flexible options for co-located load means carving a path for minimizing expensive and time-intensive network upgrades in circumstances where they’re not needed. That means system planning and build-out can better focus on efficient system needs. Today’s order also recognizes where co-located load bears the burden for upgrades needed for synchronizing to the grid. And it pays careful attention to ensuring all synchronized load pays for its use and access to the bulk electric system. As a start, today’s order finds what the current record plainly supports: Co-located load must pay for regulation and black start services in addition to the level of transmission service it chooses. As part of the paper hearing we direct, the order also seeks a more complete record on what other costs come with access to the grid if co-located load elects one of the new services beyond the familiar network and point-to-point options. As we look to next steps, I’m especially focused on the work we still have to do in ensuring full and fair cost allocation. We must design new services while protecting existing customers so that all ratepayers can reap the benefits on offer from co-located configurations.
Today’s order allows for innovative solutions to meeting the opportunities from the large loads that help grow America’s economy. I’m pleased we could reach a unanimous decision toward that end. And I support the order because it does this task with attention to our perennial responsibility for reliable and just and reasonable service for all transmission customers. There’s more work ahead of us. But today is an important marker, propelling us as we provide predictability, stability, and speed to meet this generational moment.