Motions filed this week are asking the Federal Energy Regulatory Commission to change a ruling that could price many renewables out of the PJM capacity market, while driving up prices for consumers.
FERC’s Minimum Offer Price Rule, or MOPR, calls for PJM to set minimum bids for state-subsidized electricity generators in those auctions. The rule could indirectly give coal-fired power plants an extra lease on life in the country’s largest capacity market, while making it harder for new wind or solar plants to enter the market and compete.
“The decision is really the worst case scenario” of possibilities considered during the period leading up to the ruling, said attorney Christie Hicks at the Environmental Defense Fund.
PJM’s capacity auctions pay generators to guarantee they will provide power at a future date, usually about three years out. Lower-priced energy resources clear the auction ahead of higher-priced ones. All who clear get paid the same rate as the highest successful bidder.
Most coal and natural gas plants in the PJM footprint won’t be subject to the rule, outside of a few that get state subsidies, as under Ohio’s House Bill 6. However, the rule includes indirect benefits from state policies that could be deemed to provide an advantage.
Viewed in that way, renewable portfolio standards would fall under the rule, largely because utilities can meet those standards by buying renewable energy credits, or RECs.
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