On December 18, 2025, FERC directed PJM Interconnection, L.L.C. (“PJM”) to revise its Open Access Transmission Tariff (“Tariff”) to:

1) establish terms that an Interconnection Customer seeking to serve co-located load must follow when effectuating a co-location arrangement;
2) clarify the scope and potential of interconnection service when interconnecting new generation to serve co-located load; and
3) require that a customer taking transmission service on behalf of co-located load take one of three new transmission services.

FERC found PJM’s Tariff was unjust and unreasonable because it did not provide the rates, terms, and conditions of service applicable to generators serving co-located load or eligible customers taking transmission service on behalf of such load with sufficient clarity or consistency. FERC separately established a paper hearing to determine just and reasonable rates for new transmission services and ordered PJM to revise the Behind the Meter Generation rules in the PJM Tariff.

FERC’s most recent order follows a show cause order issued on February 20, 2025, which required PJM to demonstrate that its Tariff was just and reasonable in its treatment of co-located load. Specifically, FERC preliminarily found that the PJM Tariff appeared to be unjust and unreasonable given its lack of terms and conditions on co-located arrangements. In its initial filing in the show cause proceeding, PJM argued that its Tariff remained just and reasonable but noted potential improvements to its Tariff.

Based on the record in the show cause proceeding, FERC’s order on December 18th concluded that PJM’s Tariff was unjust and unreasonable because the Tariff did not contain sufficiently clear or consistent terms for Interconnection Customers who serve co-located load or for “Eligible Customers” as defined in the PJM Tariff who take transmission service for co-located loads. FERC found the lack of such provisions led to disparate treatment for co-located arrangements in PJM. FERC’s order did not make findings on PJM’s rules regarding the capacity market, reliability, or resource adequacy.

FERC’s December 18th order directs PJM to take multiple steps to revise its Tariff in various compliance filings. First, FERC is requiring PJM to revise the Tariff’s interconnection procedures and agreements to require an Interconnection Customer whose generator will serve co-located load to specify the eligible customer for transmission service. PJM must also establish three new transmission services for Eligible Customers serving co-located load and provide corresponding service agreements. FERC also separately established a paper hearing to determine just and reasonable rates for such transmission services and directed PJM to reform its behind the meter generation rules for customers above a certain megawatt size materiality threshold. Finally, PJM must clarify in its Tariff the steps that Interconnection Customers must take to effectuate co-location arrangements in a just and reasonable manner.

Commissioner Rosner filed a concurrence, arguing FERC’s order is necessary given load growth and to ensure fair interconnection of large load. Commissioner Chang filed a concurrence where she concurs in the result, but argues that FERC’s December 18th order is first step in planning reforms that are needed across the country to protect ratepayers from cost and reliability risks to the grid.

FERC’s order issued in Docket Nos. EL25-49-000, EL25-49-001, AD24-11-000, and EL25-20-000, is available here.