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PSC Staff, Utilities Generally Agree Large Loads Should Pay PJM Reliability Backstop Costs, But Offer No Specifics On Allocation If Service Area Is Assigned Backstop Costs Without Large Loads (Potential Allocation To Other LSEs)
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Staff of the Maryland PSC, and the Maryland utilities, have each filed comments responding to various PSC questions concerning the allocation of costs under PJM's Reliability Backstop Procurement (RBP), with the comments generally indicating an intent that responsible large loads (or other large loads) be allocated all costs arising from RBP, but with the comments lacking specific proposals to address a situation in which a service area is assigned RBP costs but in which no large load exists from which to recover the costs
Generally, while stakeholders addressed the PSC's questions concerning RBP, the stakeholders noted that PJM's RBP proposal, while filed at FERC, remains subject to potential modification by FERC, with a separate PJM Interim Resource Adequacy Service proposal also subject to future FERC adjudication, and commenters noted that potential FERC modifications may require revisions to their recommendations
PSC Staff said that if it is possible to determine which Large Load customers resulted in the PJM RBP zonal allocation to BGE and PE, "it follows cost causation to allocate these customers RBP costs if there is high confidence that these customers will be in service by the 2028/2029 Delivery Year through the RBO [RBP Obligation] process."
Staff said that, if there is uncertainty regarding which Large Load customers resulted in the PJM zonal allocation to PE and BGE, or there is uncertainty regarding whether these Large Load customers will be in service, "the Commission can allocate RBP costs to all active Large Load customers in the BGE and PE service territories."
"However, the Commission may also determine that it does not want to reward first movers by not allocating those Large Load customers any RBP costs, and therefore, may determine that spreading the cost of the RBP to all Large Load Customers is more equitable," Staff said
Staff said that Staff cannot recommend a specific RBP allocation without seeing the BGE and PE load forecast data. Staff said that this data, and related information, should be provided to Staff, OPC, and the PSC, which will inform the Commission, Staff, and OPC regarding the certainty of the Large Load customer’s load materializing.
"Staff is concerned that it is possible that there will be no active Large Load in the PE and BGE zones to allocate RBP costs to through the RBO process," Staff said
Still, Staff said that Staff does not believe that any rules or tariffs need to be addressed or established at this time, prior to the RBP auctions occurring, unless the PSC would like to opt-out of the RBP through peak demand reduction programs
Staff said that if the Commission does not choose to opt-out of the RBP, cost allocation issues can be resolved up to 60 days prior to the 2028/2029 delivery year when PJM will begin billing RBP costs.
In separately filed comments, Baltimore Gas and Electric Company, Delmarva Power &
Light Company, and Potomac Electric Power Company (collectively the "Joint Maryland Exelon Utilities") said that, "Once FERC approves PJM’s proposal, the Commission should consider requiring an agreement to
hold large load customers accountable for capacity costs, potentially similar to a TSA. This should
be included as a provision in utility large load tariffs to ensure the large load customer makes their
financial contribution to the capacity/generation revenue requirement for the specified term and
protects non-large load customers should the load fail to materialize."
The Joint Maryland Exelon Utilities further said that state tariffs will need to be developed to allow utilities to modify default service cost
allocations to directly allocate RBP costs to large load customers if at any time the large load customers become default
service customers.
The Joint Maryland Exelon Utilities also proposed that Maryland should require all large load customers to "select an LSE" and
report the identity of the LSE to the utility, so that the utility has the information necessary to populate PJM’s proposed large
load registry and ensure that costs are allocated to the large load.
In a separate filing, Potomac Edison said, "PJM’s July 31, 2026, RBP filing allocates costs to LSEs that serve load in delivery areas that have been identified by PJM as being net short. In its filing, PJM identifies the limits of its authority to provide for further cost allocation, and directs the affected LSEs (including Potomac Edison) to work with their respective state regulators to develop retail tariffs that provide for further cost allocation and recovery. As such, if and when PJM’s RBP tariff comes into effect, Potomac Edison will consult with stakeholders in the PC 72 Work Group on future tariff updates that may be required. Worth noting here is that under PJM’s proposal, RBP costs will not be charged until 2028; so there should be time to develop appropriate tariffs to provide for cost allocation and recovery before the PJM costs are charged to LSEs."
Potomac Edison stressed that, "PJM’s cost allocation to Potomac Edison is not tied to a forecast of large loads," further explaining that, "If there is no customer specified LSE, PJM is going to allocate a set of RBP costs to Potomac Edison, and PJM leaves the question of whether large loads exist to take such costs in retail rates to Potomac Edison and the Commission."
Potomac Edison warned that, "If and to the extent costs are allocated for which there is not a corresponding retail 'large load' customer, Potomac Edison will need to recover such costs from its native load customers."
In separate comments, the Office of People's Counsel noted that because PJM's RBP costs are based on forecasts and not tied to actual customers, stranded costs remain a risk
OPC said that the best way to avoid the allocation of RBP costs to non-large load customers is to opt-out of RBP through a peak shaving adjustment program, which must be, per PJM's proposal, codified in state "law".
OPC said that the PSC should require PE and BGE to implement qualifying peak-shaving adjustment programs and require that the new large load customers who do not commit to pay RBP costs will be required to participate in the program during the 2028/209 delivery year.
OPC said that if Maryland remains subject to an RBP obligation, the PSC should establish an RBO allocation framework that assigns all RBP costs exclusively to the responsible large loads, "or their designated LSEs".
If individual assignment cannot occur immediately, the Commission should require that Maryland RBP costs initially be assigned to the utilities and deferred for recovery from the responsible large loads, OPC said
"After procurement, but before PJM billing begins in DY 2028/2029, the Commission and utilities may finalize customer and LSE-specific billing assignments; establish deferral account and carrying-cost procedures, if required; confirm that the retail allocation assigns costs to the available large load customers rather than to other customers in the zone; and implement reimbursement, default, and collateral-draw procedures," OPC said
PC72, PC 72
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August 11, 2026
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Reporting by Paul Ring • ring@energychoicematters.com
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