PJM’s BYONC Framework: What It Means for Renewable & Storage Asset Owners

On August 13, 2026, PJM filed with FERC its proposed framework for service during periods of insufficient resource adequacy, establishing a new Interim Resource Adequacy Service (IRAS) and a Bring Your Own New Capacity (BYONC) pathway. Subject to final FERC approval, New Large Loads of 50 MW or greater that fail to secure their own new capacity will be curtailed ahead of Pre-Emergency Load Management beginning June 1, 2027. For renewable and storage developers, the significance is that BYONC creates demand for bilateral capacity contracts that did not previously exist. This article outlines PJM’s IRAS and BYONC and how their impacts will provide new opportunities for BESS assets in PJM.   

PJM capacity auctions have now cleared short of their reliability requirements in two consecutive Base Residual Auctions. The 2028/29 BRA results produced another elevated cycle without procuring enough supply to meet the requirement, coming up >6 GW short of the reliability target. Furthermore, PJM projects large load additions of up to 70 GW by 2038. An earlier measure, Non-Capacity-Backed Load (NCBL), which would have required new large loads to accept curtailment directly under PJM authority, was withdrawn after stakeholders raised objections regarding PJM’s jurisdictional rights. Claims were on the grounds that decisions about which retail customers connect to state-regulated utilities fall to the states, not the RTO.  

IRAS is the restructured successor to this framework, where PJM maintains a Large Load Registry, calculates the megawatt obligation for each zone, and issues emergency actions. The electric distribution companies (EDCs) and states determine which specific loads are subject to curtailment.  

The practical effect is that PJM has instructed Large Loads to procure new capacity bilaterally or accept being the first in line for curtailment. Storage is one of the few asset classes that can realistically deliver against the timeline that Large Loads are looking to build new data centers.  

The IRAS framework rests on a Large Load Registry. A Large Load is defined as an end-use customer load with cumulative peak demand of 50 MW or more at a single site, behind one or more delivery points within a one-mile radius. Load not in service by June 1, 2027 counts as New Large Load, including incremental additions that push an existing site over the 50 MW threshold. New Large Loads will be subject to curtailment under IRAS if they have not procured sufficient BYONC or received Allocated Reliability Backstop Procurement (RBP) Unforced Capacity (UCAP) MW following PJM’s RBP Central Procurement. 

PJM will determine the quantity of New Large Loads by transmission zone that did not BYONC and allocate an IRAS responsibility to each zone, beginning with the 2027/28 Delivery Year. Allocations are zonal, not load-specific. When conditions require it, PJM will issue a new emergency action that takes precedence over Pre-Emergency Load Management, and the EDCs will be required to initiate and complete the load reduction requirement. Loads subject to IRAS may switch to on-site backup rather than curtail, provided the load is removed from the PJM system.  

Additionally, incremental New Large Load relative to the 2028/29 BRA forecast will be excluded from the forecast used in auction for 2029/30 and beyond, unless and until new BYONC supply is offered in sufficient quantity to cover it. The rationale is that because New Large Load not covered by BYONC will be subject to curtailment under IRAS, PJM will not procure firm capacity to serve that load, thus limiting any incremental impact on capacity prices. 

Only new resources can qualify for BYONC, which includes new-build generation, uprates, repowering, or newly registered Demand Response or DERs. These resources must not have cleared in a BRA prior to the 2027/28 BRA, and must not have already been on the PJM system as of May 31, 2027.  

Accreditation Test 

BYONC is denominated in UCAP MW. Generation UCAP MW in PJM is derived through Effective Load Carrying Capability (ELCC) accreditation and a resource’s Installed Capacity (ICAP) MW. The Accredited UCAP of a BYONC arrangement is based on the Accredited UCAP cleared in the first Delivery Year of the BYONC arrangement with the New Large Load. 

The implication of this accreditation rule is that declines in ELCC after the first year of a BYONC arrangement will not impact the ability of the BYONC arrangement to shield the New Large Load from curtailment under IRAS. However, depending on the commercial terms of the BYONC agreement between the buyer and seller, ELCC declines could still impact realized capacity revenues as compared to initial projections from the resource owner. 

BYONC Obligations and Requirements  

• RPM Participation Requirements: Generation and storage resources supplying BYONC  are required to offer into RPM auctions for 10 consecutive Delivery Years as a price-taker (i.e., $0/MW-day offer).  BYONC resources are subject to all requirements of PJM Capacity Resources, including pre-auction reporting and certification, capacity deficiency charges, and performance assessments under the Capacity Performance construct. 
  

• Settlement: Unlike the RBP construct, where resources will receive a “contract for differences” settlement from PJM on top of any RPM revenues, BYONC resources that clear in an RPM auction will be settled by PJM in the same manner as any other Capacity Resource. Any adjustment to RPM auction revenues under a BYONC arrangement will occur outside the PJM market and be subject to commercial terms between the buyer and seller of the BYONC arrangement.  
  

• Performance Asymmetry: If the Capacity Resource associated with a BYONC arrangement fails to perform during an IRAS event, the Large Load’s exemption is unaffected, but the resource remains subject to PJM capacity rules and performance assessments. The counterparty is insulated from the consequence of the asset’s underperformance, but the asset owner is not.  
  

• Failure to Materialize: If the Capacity Resource does not materialize for the initial Delivery Year of the BYONC arrangement, it becomes subject to capacity deficiency charges, and the Large Load becomes subject to curtailment under IRAS until the Capacity Resource achieves commercial operation.  
  

• Three-Year Sunset: BYONC and the associated RPM must-offer requirements do not need to be maintained if IRAS is not triggered for three consecutive Delivery Years.  

Large Loads must provide proof of BYONC to their EDC or Load Serving Entity (LSE) through an executed PPA or comparable contractual commitment if they wish to avoid being subject to IRAS. Capacity Resources must separately report to PJM any BYONC arrangements to confirm the Large Load BYONC reporting. Reporting timelines will vary across the first several Delivery Years of the IRAS construct: 

• 2027/28 & 2028/29 Delivery Years: BYONC arrangements must be reported by April 1 before the start of the relevant Delivery Year. 

• 2029/30 Delivery Year: BYONC arrangements must be reported 50 days prior to the start of the BRA, which opens on December 9, 2026 (leading to an October 20, 2026 deadline). For Incremental Auctions, BYONC arrangements must be reported at least 30 days prior to PJM releasing the planning parameters for the relevant Incremental Auction. 

• 2030/31 Delivery Year and Beyond: BYONC arrangements must be reported at least 30 days prior to PJM releasing the planning parameters for the relevant RPM auction for the initial Delivery Year of the BYONC arrangement. 

BYONC works on a portfolio basis in both directions. One Capacity Resource can service multiple Large Loads, and one Large Load can draw on a portfolio of Capacity Resources. PJM states in their FERC filing that “BYONC is composed of MW, not a physical resource.” This was designed by PJM to create greater liquidity in the market for capacity and to increase efficiency in the contracting process for buyers and sellers. 
 

PJM has not imposed a locational requirement on BYONC, reasoning that interconnection requirements and transmission planning maintain deliverability across the system. This means that a Large Load can contract for BYONC with a Capacity Resource in a different PJM zone. States and EDCs may add their own locational requirements, however, which PJM has stated will be recognized. 

Along with RBP, BYONC represents a unique opportunity for resources in PJM to secure a long-term capacity revenue stream. SYSO provides market participation services in PJM for storage and renewable assets, including daily scheduling, 24/7 NOC services, telemetry and market settlement. Our team has deep experience in PJM’s capacity market, and we help clients navigate the complexities of RPM participation.  Under the BYONC framework, RPM participation is mandatory and critical to ensuring large loads are not subject to curtailment under IRAS. Given the performance asymmetry built into the framework, asset performance matters. Contact us today to discuss how we can help your assets succeed under this framework.