FERC Advances PSE&G Transmission Cost Complaint as PJM Capacity Gap Widens

FERC Advances PSE&G Transmission Cost Complaint as PJM Capacity Gap Widens A federal ruling on a $546 million New Jersey transmission project adds pressure on grid operators already struggling to close a widening supply shortfall. The Federal Energy Regulatory Commission advanced a complaint over Public Service Electric and Gas Co.'s cost recovery of a $546 million transmission project it built in New Jersey, the latest move in a sustained federal push to scrutinise how grid costs are allocated across US power markets.⁶ The PSE&G case sits within a broader pattern. FERC voted unanimously on Thursday, 18 June (2026-06-18), to issue tailored show-cause orders to all six regional transmission organisations and independent system operators under its jurisdiction, directing each to justify or rewrite the tariffs they use to charge large electricity customers — a category now dominated by data centres. FERC staff described the orders as addressing "the pressing need in the RTO/ISO regions," affecting more than 200 million Americans across over 30 states.³ The timing matters. PJM Interconnection, the largest US grid serving 67 million customers in 13 states and Washington, DC, announced on Tuesday (2026-07-15) that its 2028/2029 Base Residual Auction fell 6.8 gigawatts short of the capacity needed to meet projected electricity needs — the third consecutive year the auction has come up short. PJM secured 138,318 MW of unforced capacity, but the gap underscores how demand growth is outpacing the grid's ability to commit new supply. FERC Chairman Swett described the results as compounding "alarm bells."^5,6 State-level pressure is now converging with federal action. Maryland agencies filed a complaint asking FERC to strip Exelon and FirstEnergy utility subsidiaries, along with a NextEra Energy unit, of the extra 0.5% return on equity they earn for voluntary PJM membership. Maryland Governor Wes Moore signed the Utility RELIEF Act into law, effective 1 July (2026-07-01), which requires the state's transmission owners to join PJM — effectively eliminating the voluntary basis on which the adder is paid.⁴ The 0.5% figure sounds minor. In practice, it translates directly into ratepayer costs. In 2024, the same adder increased Connecticut Light and Power and United Illuminating rates by $17 million across New England, with Connecticut ratepayers bearing nearly $4.5 million of that total, according to the filed complaint. Transmission costs now account for roughly 15% of a residential customer's electricity bill, according to Utility Dive.⁴ Jefferies equity analysts told clients on Monday (2026-07-06) that Maryland's complaint will likely succeed given precedent established in California and Ohio. The PSE&G case adds a separate but related dimension: FERC also advanced a complaint on cost recovery for the Roseland-Pleasant Valley transmission project, which PSE&G settled in December 2024 (2024-12) by paying a $6.6 million fine following a FERC enforcement investigation into the utility's justifications to PJM for building the line.^4,6 The cost-allocation question is being compressed from both directions. Grid operators are under instruction to upgrade transmission infrastructure; FERC directed all six major regional operators outside Texas in late 2021 to establish programmes for that purpose, and some have since requested deadline extensions. But the commission is simultaneously pushing back on how those costs flow to end customers — particularly where large industrial or commercial users may be triggering the investments without bearing proportionate charges.¹ Data centre load is the flashpoint. The sector's US footprint is projected to grow by at least 65 GW and as much as 90 GW by 2029, according to Grid Strategies. That demand trajectory sits directly behind the PJM auction shortfalls and is the implicit subject of FERC's June (2026-06-18) show-cause orders.^1,2 FERC dismissed arguments from North Carolina Electric Membership Corp. in a separate complaint, affirming that rolled-in rate treatment for certain transmission project costs "is consistent with longstanding Commission precedent." That ruling pushes back against efforts to isolate specific project costs to specific beneficiaries — a principle that, if reversed broadly, would shift billions in transmission investment costs away from the general ratepayer base toward the industrial users driving demand growth.⁶ The unresolved question is whether FERC's show-cause process produces tariff rewrites that materially change cost flows before the 2028 delivery year arrives. PJM's capacity shortfall is a 2028 problem; the tariff investigations have no fixed resolution deadline. If the commission moves slowly, the cost of closing the gap — through emergency procurement, demand response, or accelerated capacity contracts — will land on the same ratepayer base the agency is trying to protect.^5,3