Energy

CAISO Tells FERC It Has No PJM-Style Shortfall

Answering the same FERC order that pushed PJM's board to impose mandatory curtailment, CAISO's July 20, 2026 filing says California has no comparable shortfall and is choosing a slower, voluntary compliance path instead.

EnergyBy Servola Tech Desk2026-08-143 min read

AI-assisted, edited by humans. | Editor-in-Chief: Leon Soliman | Editorial standards

CAISO Tells FERC It Has No PJM-Style Shortfall

Key takeaways

In a July 20, 2026 filing responding to the same FERC Section 206 order that pushed PJM's board to impose mandatory curtailment on data centers, the California Independent System Operator told the Federal Energy Regulatory Commission that "current planning assessments do not indicate a systemic generation adequacy shortfall comparable to those in other regions," and that California is "not facing the current capacity constraints of the East."
CAISO's own market-monitor data show 2025 peak demand across its Western Energy Imbalance Market footprint actually fell 3.8 percent, from 135.3 gigawatts in 2024 to 130.1 gigawatts, while total wholesale cost of serving load dropped 6 percent and, adjusted for gas and emissions prices, wholesale electricity costs fell about 24 percent.
The California Energy Commission's own forecast, cited inside CAISO's filing, projects data-center load on the CAISO grid will grow by just 1.8 gigawatts by 2030 and 4.9 gigawatts by 2040, a fraction of the up to 70 gigawatts of new large-load demand PJM itself is projecting by 2038.
Rather than adopt a mandatory curtailment backstop like PJM's Interim Resource Adequacy Service, CAISO is expanding its existing voluntary Large Loads stakeholder initiative, with a straw proposal due August 12, 2026, Board of Governors approval targeted for October 28, and the actual FERC compliance filing not due until November 16, 2026, three months after PJM's own response landed.
Nearly 36 gigawatts of new generation and storage, including more than 16 gigawatts of battery storage, have come online to serve CAISO load since 2020, and the California Public Utilities Commission has already ordered load-serving entities to procure 24.8 gigawatts more by 2032, the buildout CAISO is betting will keep pace with demand without a new curtailment rule.

One Order, Six Answers Due the Same Week

On June 18, 2026, FERC issued Section 206 show cause orders to all six US regional grid operators, PJM, MISO, SPP, CAISO, ISO-NE and NYISO, opening a national docket, RM26-4, alongside operator-specific dockets such as CAISO's EL26-71, and giving each 30 days for a generation-adequacy informational report and roughly 60 days for a full tariff response.

Servola covered PJM's answer on August 14: its board overruled a two-thirds stakeholder vote to impose a mandatory curtailment mechanism from June 1, 2027. CAISO's July 20, 2026 informational report, signed by Assistant General Counsel William H. Weaver, answers the identical commission with a starkly different diagnosis in writing.

California's Own Numbers Argue There Is No Shortfall to Fix

CAISO's filing states plainly that its integrated planning framework is "fundamentally different" from regions facing capacity shortfalls, and backs that with figures from its own 2025 market data: peak demand across the Western Energy Imbalance Market fell 3.8 percent year over year, total wholesale cost of serving load dropped 6 percent, and, adjusted for gas and emissions prices, wholesale electricity costs fell about 24 percent, with almost no day-ahead price intervals above $250 per megawatt-hour.

Nearly 36 gigawatts of new generation and storage, more than 16 gigawatts of it batteries, has come online to serve CAISO load since 2020. The California Public Utilities Commission has ordered 24.8 gigawatts of further procurement by 2032, already exceeding an earlier 14.8-gigawatt target, and the California Energy Commission's own forecast, cited in the filing, projects data-center demand on the CAISO grid will grow by only 1.8 gigawatts by 2030 and 4.9 gigawatts by 2040.

A Slower Clock, and No Mandatory Backstop

Instead of a curtailment tool, CAISO's compliance path repurposes its existing Large Loads stakeholder initiative, first opened with a January 2026 issue paper and a June 2026 straw proposal. The now-expedited schedule runs a straw proposal on August 12, 2026, a draft final proposal on September 21, Board of Governors approval targeted for October 28, and the actual FERC compliance filing due November 16, 2026, three months after PJM's board-directed answer to the same show cause order.

CAISO frames its entire response around continuing an existing 2022 memorandum of understanding between the California Energy Commission, the California Public Utilities Commission and CAISO itself, arguing that generation and transmission planned together, well ahead of need, make a backstop curtailment mechanism unnecessary for now.

The Same Federal Deadline, a Real Fork for Where Load Lands

This is a genuine regulatory divergence inside one docket, not two operators spinning identical facts: PJM's board overruled its own members to add a mandatory curtailment backstop because it says it cannot otherwise guarantee capacity, while CAISO's filing to the same commission says no comparable shortfall exists and proposes no such mechanism at all. An operator choosing where to site a large load today faces materially different curtailment exposure depending on which of the six dockets its site falls under.

CAISO's confidence rests on a demand forecast, 1.8 gigawatts of new data-center load by 2030, that already looks conservative next to the scale of AI-driven capital commitments landing elsewhere in the country, and on a 2025 load figure that fell rather than rose. Servola covered on August 14 how the US Energy Information Administration halved its own Texas 2027 growth forecast within months once one external shock, the state's ERCOT audit, hit its assumptions; CAISO's bet on slower, coordinated planning over a board-imposed backstop is only as strong as the forecast underneath it, and that forecast is the thinnest number in the filing.

Frequently asked questions

What did CAISO actually tell FERC?

In a July 20, 2026 informational report in docket EL26-71, CAISO told FERC that current planning does not show a systemic generation adequacy shortfall comparable to other US grid regions and that California is not facing the East's capacity constraints.

How is this different from what PJM did?

PJM's board overruled a two-thirds stakeholder vote to impose mandatory curtailment, Interim Resource Adequacy Service, from June 1, 2027; CAISO's answer to the same FERC order proposes no comparable mandatory mechanism, choosing instead to expand its existing voluntary Large Loads initiative.

Why does CAISO get three extra months to file?

CAISO's compliance path runs through its stakeholder process, straw proposal, draft final proposal and Board approval, targeting a November 16, 2026 FERC filing, a slower schedule than PJM took because CAISO's own diagnosis does not, in its account, require a backstop tool this year.

Does no shortfall today mean no risk later?

Not necessarily. The California Energy Commission forecast used in the filing, 1.8 gigawatts of new data-center demand by 2030, is a projection, and 2025's fall in peak demand could reverse quickly if the AI-driven buildout that hit the mid-Atlantic and Texas also accelerates in California.

What should an owner or operator take from the contrast?

The same federal order can produce a mandatory curtailment backstop in one grid operator's territory and a purely voluntary planning process in another's, so where a large load is sited changes its regulatory exposure independent of the underlying federal rule.

FERC opened one docket and received two incompatible diagnoses in writing within five weeks: a mandatory curtailment backstop from the operator that says it cannot otherwise guarantee capacity, and a voluntary planning extension from the operator that says its own forecast does not require one. Both cannot stay right indefinitely, and the forecast underneath the calmer answer is the number worth watching next.

CAISOFERCPJMlarge load interconnectiongrid capacitydata centers

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