EPSA, P3 seek clarification following FERC order that PJM expand minimum offer price rule
The Federal Energy Regulatory Commission’s (FERC) decision to make PJM Interconnection, L.L.C. address state-subsidized electric generation resources, has left the Electric Power Supply Association (EPSA) and PJM Power Providers Group (P3) asking for greater clarity.
“Like FERC, we know that consumers win when companies compete,” Todd Snitchler, EPSA president and CEO, said. “EPSA commends the Commission for taking decisive and much-needed action to uphold the many benefits of PJM’s capacity market—and for sending a strong signal in support of competitive power markets and customers everywhere.”
The two organizations lauded the Commission for action in support of competitive markets but felt that some uncertainties remain in the decision’s wake. They seek assurances that state programs, private contracts for renewable energy credits, and other market-driven efforts will not be subjected to the same Minimum Offer Price Rule (MOPR) now binding PJM. Further, they want FERC to rescind its finding that resources benefiting from certain federal subsidies would not be affected by that ruling.
FERC said that it made its ruling to protect the competitive capacity market administered by PJM. In that ruling, it declared that out-of-market payments provided or required to be provided by PJM states to support its operations threatened the competitiveness of that capacity market. It denounced the company’s open access transmission tariff as unjust and unreasonable and gave PJM 90 days to comply with the federal order and provide a new timeline for its next auction. PJM must now expand its MOPR to apply to any new or existing resource that receives or could receive a state subsidy, barring exemptions such as existing renewable resources participating in state renewable portfolio programs; existing demand response, energy efficiency, and storage resources; existing self-supply resources; and competitive resources that do not receive state subsidies.
EPSA and P3 reiterated they are not opposing the new rule, but rather, seek a limited rehearing of one aspect of the order — specifically, that no federal subsidies would be taken into consideration when subjecting resources to MOPR. They also want FERC to put further consideration into the Fixed Resource Requirement (FRR) — a PJM rule that allows utilities to opt-out of the capacity market if they can meet power demand with their resources — and clarify that the order, as it stands, has not addressed issues linked to the application of an alternative proposed by FERC. Further, they said that their proposed changes would uphold exemptions for market-based clean energy programs.
