PJM and PJM Transmission Owners Submit Initial Briefs Addressing Alternatives to Traditional Network Service when Serving Co‑Located Load

The PJM region continues to wrestle with how to serve large loads seeking to locate next to generation resources. In December 2025, the Commission initiated a paper hearing aimed at establishing alternative services within PJM for facilitating the interconnection of AI-driven data centers and other large loads co-located with generating facilities. Despite prior objections from PJM and the PJM Transmission Owners, FERC concluded that PJM’s Open Access Transmission Tariff is unjust and unreasonable due to a lack of clarity and consistency in the rates, terms, and conditions for generators who wish to serve co-located load and eligible customers taking transmission service on behalf of co-located loads. This week, PJM filed its initial brief discussing how it envisions implementing three alternatives to traditional Network Integration Transmission Service (NITS): Firm Contract Demand Transmission Service, Non‑Firm Contract Demand Transmission Service, and Interim Network Integration Transmission Service (Interim NITS).

PJM conceptualized its proposed Contract Demand Transmission Services on the foundation that Eligible Customers must be willing and able to control withdrawals from the transmission system, and that the services must allow PJM to maintain system reliability. PJM explained that co‑located loads may access the grid only to the extent that they are willing and able to tightly control withdrawals, and that all gross load must be fully covered at all times by a combination of on‑site generation and explicitly contracted transmission service, with no unstudied or implicit reliance on the transmission system. PJM explained that the two Contract Demand Transmission Services are designed to work together and could be “mixed and matched,” so long as the combination of the two covers the gross demand of the co-located load. Further, these services would be offered as permanent alternatives to existing transmission services, unlike Interim NITS, which would be a transitional, non-firm service. PJM stated that customers opting for Firm or Non-Firm Contract Demand Transmission Service, or any combination thereof, are prohibited from also taking NITS or Interim NITS on behalf of the same co-located load. PJM also identified various pieces of information and data, as well as numerous prerequisites that must be met when applying for Contract Demand Transmission Service.

PJM explained that, unlike Contract Demand Transmission Service, Interim NITS would afford an Eligible Customer non-firm service until the Network Upgrades necessary to serve that new load are completed. Under this option, once the facility is operational, the customer would automatically convert to NITS. Customers seeking this service must limit energy withdrawals, receive signals and respond to instructions from PJM, and meet other requirements. PJM explained that it would need time to program these changes into its system and proposed a June 1, 2029, effective date.

The PJM Transmission Owners submitted their own initial brief, explaining that co-located loads are not islanded, but connected and synchronized with the transmission system, like all other loads and generators, and therefore can impact the system. The PJM Transmission Owners, concerned about protecting the system from reliability risk, developed rate proposals for the three new alternative services, including a Grid Reliance Charge. Customers taking non-firm Contract Demand Service would pay this charge for their on-site load that is not covered by Firm Contract Demand Service. In addition to protecting against reliability risk, the PJM Transmission Owners view this charge as also being necessary to protect customers against transmission cost shifts under the new framework. The PJM Transmission Owners also explain why robust penalty provisions for unreserved use should be adopted, stating that penalties must be sufficient to meaningfully deter co-located customers from exceeding their contract demand use levels.

The briefs were submitted in FERC Docket No. EL25-49. Responses to initial briefs are due on March 25, 2026, with reply briefs due on April 24, 2026.