Residential battery startup Base Power has expanded into PJM Interconnection territory through Illinois, adopting a demand-side revenue model that sidesteps wholesale market aggregation rules stalling distributed storage deployment across the region.
Base Power entered PJM's footprint via a retail electricity license in Commonwealth Edison's service territory in Illinois, according to Latitude Media. The move marks a deliberate pivot from the company's Texas operating model and reflects a broader recalibration of how distributed battery energy storage systems (BESS) can be monetized under PJM's layered tariff structure.
Background
PJM operates the largest deregulated power market in the United States, serving more than 67 million people across 13 states and the District of Columbia. Despite its scale, utility-scale BESS deployment in PJM has lagged behind peer markets, with fewer than 450 MW of capacity commercially operational, according to Modo Energy. The bottleneck is structural: historically, more than 80% of projects entering PJM's interconnection queue withdrew before reaching commercial operations, and interconnection timelines for batteries stretched from two years before 2020 to as long as nine years for post-2020 projects.
On the market design side, PJM's Regulation market redesign went live in Phase 1 on October 1, 2025, merging the RegA and RegD signals into a single bidirectional product. The change effectively doubled the accessible regulation market for batteries from roughly 320 MW to 750 MW. In October 2025, monthly average Regulation prices reached $129/MW/h - the highest in over three years, according to Modo Energy, with short-term scarcity likely driven by recertification delays among incumbent providers.
Meanwhile, the broader market faces a capacity crunch. PJM's 2027/2028 capacity auction cleared 6.6 GW below its reliability target and hit its administratively-set price ceiling of $333.44/MW-day - the second consecutive auction to do so.
Details
Base Power's Illinois model differs substantially from conventional supply-side storage strategies. Rather than aggregating residential batteries into wholesale market products - a pathway delayed by slow implementation of FERC Order 2222 across PJM - the company leverages a retail tariff feature unique to Illinois. Illinois allows retail electricity providers to net demand-related capacity and transmission charges across their entire customer portfolio, according to Travis Kavulla, Base's head of policy and market strategy. When one customer's battery exports during peak hours, that negative demand offsets peak consumption from other customers in the Base portfolio.
"I would take the entry into Illinois as a bit of a beacon to other states in PJM that there are other ways to do this than waiting to have PJM solve your problems for you," Kavulla told Latitude Media.
The economic logic is straightforward: rather than generating revenue through energy arbitrage as in ERCOT, Base's Illinois model is centered on peak shaving to reduce capacity and transmission system charges. This "private capacity market" on the demand side, as Kavulla described it, lets Base capture value without engaging PJM's complex supply-side aggregation frameworks. FERC Order 2222, the federal mandate aimed at enabling small batteries to participate in organized wholesale markets, has seen its PJM implementation slowed by technical and bureaucratic hurdles, making state-level retail rules a more immediately viable route.
The backdrop reinforces the urgency. PJM's 2025 Long-Term Load Forecast projects peak demand climbing from 160 GW to 210 GW by 2035, driven almost entirely by data center growth, according to Modo Energy. Data centers account for 94% of projected 32 GW of peak load growth through 2030 in PJM's own forecasts.
Outlook
PJM's interconnection reforms are gradually improving the utility-scale BESS pipeline. The first reformed Transition Cycle (TC1) was completed on November 20, 2025, awarding interconnection agreements to 21 battery storage projects representing 1.9 GW of capacity, with Phase 2 of the Regulation market redesign - which will split the bidirectional signal into separate RegUp and RegDown products - scheduled for October 2026. Whether those structural changes broaden revenue-stacking opportunities for distributed BESS - or whether the demand-side retail pathway pioneered by Base scales across other PJM states - will depend on how state regulators and utilities align their tariff frameworks with the distributed storage buildout the region needs.
